What does 2007 hold?

A lot depends on the Fed. The housing market. Gas prices. And you – the consumer.

Most economists looking into San Diego’s economic crystal ball predict an economic slowdown in 2007 – but not a recession. This will be followed by more growth in 2008.

While some parts of the economy may languish, San Diego overall will remain resilient because of our basket of industries, economists said. Weaknesses in some sectors will be offset by strengths in others. Weak industries: housing and construction. Strong ones: defense, biotech, tourism, professional services, and entrepreneurship.

San Diego economists generally agree:

“2007 will be slower, but we won’t go into recession,” said Kelly Cunningham, economist and senior fellow at the San Diego Institute for Policy Research. He is also the longstanding author of the annual economic forecast published by the San Diego Regional Chamber of Commerce.

“I think the local economy is going to slowdown considerably in 2007,” said Alan Gin, Associate Professor of Economics at the University of San Diego and publisher of the monthly Index of Leading Economic Indicators for San Diego County. “I don’t anticipate any sort of recession.”

Ditto for Marney Cox, chief economist of the San Diego Association of Governments (SANDAG): “Because of relative weakness in the economy, overall gross regional product in 2007 will be less than it was 2006. I’m not expecting a recession.”

Generally, the US and California economies are headed south. Since San Diego tends to be a forerunner of trends, we headed south sooner than the rest of the state and country – especially in 2006. But we will also head north sooner, which means the region will outperform California and the nation in 2007, said Cunningham. “San Diego is leading the rest of California and the United States.”

THE FED

Who’s the Big Daddy here? The Fed. A lot depends on whether the U.S. Federal Reserve adjusts interest rates next year – and that means: up, down or not at all.

A quick Econ review might be useful.

The Fed’s main motivation is to stabilize the economy. Its two main goals: make sure the price of things does not get out of hand (control inflation) and keep people working (reduce unemployment). Its tools: the interest rates. If the Fed raises interest rates, making the cost of money more expensive, the economy slows down and inflation is kept in check. If the Fed lowers interest rates, money is cheaper, so businesses expand activity, more people are hired and the economy speeds up.

Since 2004 — when interest rates were at all-time lows and the economy was on overdrive — the Fed has been slowly notching up interest rates, putting the brakes on the economy. That’s why the Fed took a breather in late 2006.

“The Fed achieved what it set out to do,” said Cox.

THE INTEREST-RATE WILDCARD

Now, the question is: will the Fed keep raising those rates? Or hold steady? Or even lower the rates?

The economists differ in opinion:

Cunningham: “I think they will leave them alone, at least for the first half of 2007.”

Cox: “I think it will hold steady. If the Federal Reserve has to continue to raise interest rates, it will weaken employment and further weaken the housing market, and may push the economy into recession. It won’t take much to push it over the edge.”

Gin: “I think by the end of 2007, they’ll cut short term interest rates by a full 0.5 percent – because of the slowing overall of the national economy. My guess is that in the second quarter of 2007, the national economy is going to show severe signs of a slowdown.”

So San Diego’s economy will slow down in 2007. But total output will still break records, according to the Chamber report. And the region still runs ahead the state and national rates.

In its economic forecast, the SD Regional Chamber estimates:

San Diego’s GRP (gross regional product)

• 2006 – $150 billion
• 2007 – $157 billion

San Diego’s GRP growth rate, adjusted for inflation

• 2006 – 2.9 percent
• 2007 – 2.5 percent

If San Diego were a nation, it would be ranked the 36^th largest economy in the world, based on the 2005 GRP of $142 billion, according to statistics compiled by the San Diego Regional Chamber.

Despite the slowdown, San Diego’s economic outlook is bright. “It’s still a great place to live,” said Cunningham, “as long as you have housing.”

CONSUMER CONFIDENCE

The economy is sometimes a perception game. If enough people think it’s going to slow down, it will. If enough people think it’s going to heat up, it will. In the housing market, the perception that prices will drop causes a waiting game that feeds that result. If enough people start new companies, unemployment will abait.

We are all part of a larger economy. But we also create our own personal economies. Your personal economy may slow, but it does not have to go into recession.

This article is part of a comprehensive economic outlook. See related stories:

• The Housing Market
• 2007’s Strongest Industries
• Population Changes & Employment

Follow Helen on Twitter @helenchang.

San Diego’s population is growing in seniors and foreigners.

In the last 15 years, the region has actually seen a decline in people ages 25 to 35, young people who would be starting careers and families in San Diego. Instead, they are moving to Riverside, Imperial Valley and Mexico, where housing costs are more affordable. “They’re still accessing the (SD) job markets,” said Cox. “They’re just not in the county boundaries.”

Meanwhile, people ages 35 to 65 have increased in numbers. This means industries such as healthcare will keep growing, said Gin. At the same time, more foreigners have moved to San Diego, mostly from Mexico and Latin America.

While the region had huge population inflows in the late 90s, that growth has slowed in recent years. San Diego’s population growth, according to the San Diego Regional Chamber of Commerce:

• 2002: 51,542
• 2006: 26,200
• 2007: 25,000 projected
• Total population projected in 2007: 3.12 million

EMPLOYMENT

San Diego will have fewer new jobs in 2007, economists said, but unemployment rates will remain stable.

In the last couple of years, the county has added 20,00 new jobs a year. In 2007, Cox expects this to dip to 18,000 new jobs. Gin is more conservative, placing that number at 15,000 new jobs in 2007.

In the past, about 35% of new jobs were in the construction industry. As the housing industry weakens, those jobs will evaporate. But the strong number of visitor industry jobs will ease this decline, said Cox.

Are all the new jobs in low-paying service industries? No. VC and grant money pouring into the region contributes to more middle-income jobs, said Cox. Also, the large number of down-sized employees who start new businesses creates a hidden employment that economists currently cannot account for.

The region’s unemployment rate is expected to remain stable, at about four percent. (Full unemployment is five to 5.5 percent. “We’re way below the state and nation,” said Cox.)

GAS PRICES

Gas prices also hurt or help the economy. More money at the pump means less money for other things. It also affects consumer confidence.

Gin estimates that every 10-cent raise in gas prices costs San Diego $7 million in the overall economy – each month. “People would be spending that money on gasoline when they could have been spending it on other things,” he said.

Despite the recent reprieve in gas prices, get ready for more sticker shock, said Gin. “In 2007, I think we will see a spike up again, due to economic factors, due to developments in the Middle East and worldwide demand for oil.”

This article is part of a comprehensive economic outlook. See related stories:

• The Housing Market
• 2007’s Strongest Industries
• Population Changes & Employment

Follow Helen on Twitter @helenchang.

San Diego’s growing industries will pick up slack in the housing market, economists said. These industries include: military, biotech, tourism, healthcare, professional services and entrepreneurship.

MILITARY

War helps. San Diego’s defense industry has enjoyed a spike in recent years, due to 9/11 and war in Iraq. Even with plans to pull U.S. troops from the Middle East, as Democrats gained controlled of the House and Senate, this industry will hold strong. This is because San Diego’s defense industry has already shifted its focus: from manufacturing hardware to innovating technology and surveillance systems. This means the industry will stay busy in peacetime, said Cox.

Defense industry job numbers, according to Cox:

• 2003: 17,000
• 2006: 20,000
• 2007: 20,500 to 20,600 projected

BIOTECH & TELECOMMUNICATIONS

These industries bring in moolah. It’s mostly through venture capital funds, initial public offerings (IPOs), and research grants.

VCs are have been pouring some $1 billion a year into San Diego companies in the last three years, and 2007 is expected to bring more, said Cox. About 40 percent of that money goes into biotech start-ups. Another 15 percent to 20 percent goes to telecommunication companies. When those companies grow, their Initial Public Offerings (IPOs) bring in more bucks.

Government research grants are also adding dollars. The University of California San Diego (UCSD) is now the fifth largest recipients of such grants, although it has historically been in the top 10. This money ripples out into the economy, as UCSD scientists partner with private businesses on projects.

“This is a big difference in the way our economy used to run, versus the way it’s run today,” said Cox. “We’re much more dependant on this type of funding today for the types of businesses we have. Either initial public offerings (IPOs), venture capital funds, or public/private partnerships in terms of research grants.”

TOURISM

Tourists spend money. And we have lots of them, especially from neighboring areas. The tourism industry continued to grow in 2006 and is expected to remain strong in 2007. In 2005, a record 27.2 million visited America’s finest, spending a chart-topping $5.8 billion. That number continued to rise, though moderately, in 2006.

But a downturn in the national economy will hurt San Diego’s tourism sector, said Gin.”If you see a slowdown in the national economy, our tourism will be adversely affected. People won’t travel much.” Where might new tourists come from? Said Gin: “China.”

HEALTHCARE

The growing number of retirees and seniors in San Diego is boosting the healthcare and social services industries. Not to mention other industries. “Aging people are most likely to travel and spend more, and they have the money to do it,” said Cunningham.

BUSINESS SERVICES

Professional services will continue to rise, riding on growth industries such as technology, biotech and defense. These services include accounting, legal, human resources, copying services and so on.

ENTREPRENEURSHIP

Entrepreneurs fuel San Diego’s economy.

“Our economy has done so well because of our entrepreneurial companies,” said Cunningham. “San Diego attracts people who are entrepreneurial, that like to do the high tech side, do the research and want to start their own business. That really has been a driver of our economy.”

Gin said: “It’s a growing sector and San Diego in particular has a lot more of that than in other places. You don’t have as entrenched an economy that depends on big manufacturing firms, Fortune 500 companies. The companies in San Diego tend to be smaller, there’s more of an entrepreneurial spirit.”

Current employment figures do not account for entrepreneurs – fresh and down-sized corporate guns who start new businesses. But Cunningham estimates that this group makes up some 15 percent of the total workforce.

Can entrepreneurs escape a downturn? Said Gin: “You can start your own business, but you’re going to be affected by the overall economy. If the economy goes into a slump, that’s going to affect the demand for your company’s products.”

“The small companies tend to be a little more flexible, so they may be a bit better at adapting to a slower economy. On the other hand, they don’t have the financial assets that it takes to weather a significant slowdown,” said Gin.

This article is part of a comprehensive economic outlook. See related stories:

• The Housing Market
• Growing a Basket of Industries
• Population Changes & Employment

Follow Helen on Twitter @helenchang.

The biggest industry at stake: Housing.

We all know how crazy San Diego’s housing market got in recent years. Now, the party is over. In a way, it’s a good thing. “It’s time we were pausing to catch our breath,” said Cunningham.

In fact, all three economists surveyed said they thought housing prices would drop by five percent in 2007, before heading up again in late 2007 and early 2008, because of consistent demand.

The housing sector has the largest domino effect on the rest of the economy. The greatest impact: jobs and disposable income.

Here’s what happens: Fed raises interest rates =>housing sales slow => building development slows => construction job lay-offs increase => less spending in the economy => slower economy.

The housing market is already putting on the brakes. The stats are:

• Fewer workers in the construction industry.
• Fewer building permits.
• Retail store Home Depot posted decreased sales in third quarter 2006.

Rate hikes will hit paychecks hard. Because of the high number of homeowners with adjustable interest rate loans – 30 percent of all loans – homeowners will be pressed for funds.

Here’s the scenario: Fed raises interest rates => higher monthly payments on interest-only loans => more salaries spent on mortgage payments=> less disposable income => slower economy.

Housing equity is also topped out. Because so many people sucked money out of their equity – adding some $9 billion to the economy in recent years –this source of money in the economy is no longer available, said Cox.

The domino effect of the housing market spreads to other industries, including: lending, financing, broking, escrow, suppliers and retail stores.

A rate hike could send this sector over the edge. “The housing market is at a very vulnerable point,” said Cox.

This article is part of a comprehensive economic outlook. See related stories:

Growing a Basket of Industries
2007’s Strongest Industries
Population Changes & Employment
Other Economic Insights

Follow Helen on Twitter @helenchang.

See original story on SDNN

Thursday, July 9, 2009

Superheroes aren’t the only ones fighting foes at Comic-Con International, the gigantic comic book convention that runs July 23-26 downtown.

The San Diego Convention Center and the city itself are warding off adversaries from other cities who want to lure away the iconic event, which generates millions of dollars in revenue each year.

“We’re working hard to keep them in San Diego,” said Steve Johnson, vice president public affairs at the San Diego Convention Center Corporation. “The economic impact to San Diego is profound.”

In the last three years, the homegrown event has been busting at the seams of the San Diego Convention Center, spilling over into other venues downtown, such as Petco Park, Horton Plaza, and the Midway. Overcrowding, traffic and parking problems have also hampered the event.

Tickets — for 126,000 attendees in the last two years — have typically sold out two months in advance.

“We limit the amount of attendants, because we don’t have the ability to get people through the building,” said Johnson.

As a result, convention centers in Los Angeles and Las Vegas have been courting Comic-Con organizers, with representatives from the Las Vegas center visiting last year’s event, according to news reports. Convention centers in those cities leave plenty of elbow room.

But San Diego’s leaders are not giving up anytime soon. The event means too much to the city economically and culturally to let it move away at the 2012 conclusion of its contract with the San Diego Convention Center.

Comic-Con generates $16 million in direct spending and $38 million in indirect spending for the city, said Johnson. This means that the event’s 126,000 attendees each year drop $16 million on services such as hotels, car rentals and restaurants, which has a ripple effect throughout the economy of more than double that amount.

“When you bring that kind of money into the region, it’s like a rock in a pond,” said Johnson.

San Diego’s hotel occupancy rate during Comic-Con is the highest for the county during the entire year, said Johnson. Occupancy rates for the county’s 54,000 hotel rooms average 98 percent each day during the four-day event, he said.

Comic-Con also serves as a cultural touchstone for San Diego. Since its launch in 1970, the event has grown from an underground gathering to a mainstream movement that attracts comic-book fans to videogame producers to Hollywood film studios.

“You can’t separate the power that Comic-Con has in defining San Diego as a destination for comic book junkies as well as pop culture junkies,” said Johnson.

San Diego Convention Center Corp. is working with the city’s special task force to expand by some 200,000 square feet of space to the backside of the building, said Johnson.

Mayor Jerry Sanders launched the Convention Center Task Force in January to explore how to expand the center. The 17-member group is looking at architectural, policy and funding options this month, and it is expected to provide a final report by September, said Bill Harris, deputy press secretary for the mayor.

Part of the challenge is that the center sits on port tideland governed by the state of California, which is managed locally by the San Diego Port Authority, said Harris.

Comic-Con organizers are also “valuable partners” in creating plans for a center expansion, said Harris, although Comic-Con organizers did not reply to interview questions submitted last week for this story.

What else is the city doing to keep Comic-Con? Harris won’t say.

The convention center’s Johnson is also keeping mum. “That would be showing our cards to the competition,” he said.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Monday, May 18, 2009

You thought you had it bad. Wait till you hear these two stories about real estate investors in housing foreclosures.

John Woodbury has six houses in foreclosure. Lenska Bracknell has three houses in short sales.

Woodbury, 62, was a retired state worker turned real estate investor who had a credit score of 780. He lost everything.

Bracknell, 45, runs an aerial photography business and is a real estate broker. She bought three houses on 30-year-fixed rates, full doc loans and 20 percent down. Now, those investments are sour.

Woodbury and Bracknell both attended a workshop last month about how small business owners are facing mortgage foreclosures. They agreed to share their stories with SDNN.

John Woodbury loses six houses

Investment dream: “We hoped this would help our retirement,” said Woodbury. “We were all looking forward to it.”

Number of properties: 6

Locations: Escondido, Hemet, Los Angeles, Montana, South Carolina, Texas

Credit score: 780

The good life: In 2006, “all the properties were making money,” he said. “I could borrow money, and even if they had a negative, I knew they were going up in value, so that was great.”

Warning signs: In 2008, the L.A. house rent dropped to $1,600. The mortgage was $3,200. “We knew we had to get rid of the property, because we were going through our savings.”

Refinancing: In September 2008, Woodbury applied for a refinance on the L.A. property. The mortgage broker said Woodbury’s finances were excellent, and could qualify. But Fannie Mae changed its rules, limiting the number of houses that an investor could get loans on to four. He no longer qualified for the loan.

Negotiating with the bank: Woodbury contacted First Horizon Bank, the lender on the L.A. house. “The first thing out of their mouth was, ‘Are you behind?’” said Woodbury. “We said, ‘No.’ And they said, ‘Well, you have to be behind at least two months before we can even talk to you.’”

Woodbury missed two payments, called the bank again, and “they said there’s nothing they can do.”

Attempt to sell the house: Woodbury found a buyer, with ample down payment. The house went into escrow. Two weeks before closing, the HUD statement showed that Woodbury would have to bring $33,000 to close.
Saving the deal: Woodbury borrowed $16,000 from his sister. He wiped out his savings. The real estate agents agreed to lower their commissions from 6 percent to 4.5 percent. But Woodbury was still $7,000 short.

Negotiating with the bank: Woodbury asked the bank to lower its penalties and late fees by $7,000.

“They said, ‘No.’ I said, ‘You understand, if this doesn’t close, and this house goes into foreclosure, you are going to lose about $200,000 on the value of the property immediately. I can give you all the principal, part of the interest, just not all of it.’ The bank said, ‘No, we don’t want to have anything to do with it.’”

Failed deal: The house fell out of escrow March 6 and went into foreclosure. “Everybody lost,” said Woodbury.

Bank’s motives: “They don’t need to do this,” said Woodbury, “because they know that even if they have to go into foreclosure, and they lose money, they’re going to get money from the federal government in the bailout.

“They’re not concerned about helping citizens at all. Why spend the extra time and money for something you’re going to get paid to do anyway, if you don’t do anything?”

First Horizon Bank’s response: “First Horizon strictly adheres to all applicable privacy laws, and our confidentiality policy prohibits the disclosure of customer information,” said Anthony Hicks, public relations officer, in an email.

“We recognize these are difficult times for many people and work with our customers to exhaust all available options. We encourage customers who may be experiencing difficulties, and those who think problems are likely, to contact us immediately so we can offer the best solutions for their needs within the parameters of their loans.”

Other foreclosures: “That’s one of six loan modifications I’ve tried to do, and all of them have fallen through for lack of cooperation” from banks, said Woodbury. “Part of the reason is because my credit scores have gone down, and they’ve gone down because they didn’t loan me the money, because of (rules changes at) Fannie Mae.”

Dead dreams: “Now we have no retirement, no money,” said Woodbury.

How they are surviving: Wife’s government job salary. Woodbury is filing for bankruptcy.

Responsibility: “I’m not blaming anyone but myself, because I’m the one who made all the decisions,” Woodbury said. “Nobody guaranteed me anything when I was born. You do the best that you can. Sometimes it works, sometimes it doesn’t. You just do the best you can.”

Lenska Bracknell negotiates three shortsales

Her main business: Aerial photography

How she started investing: In 2003, Bracknell bought one house, fixed and sold it. She used the profits to buy more houses.

Number of houses: 3

Location: Boise, Idaho

Great loans: 30-year fixed, 20 percent down, full documentation.

Warning signs: In 2006, many people lost jobs in Idaho. Rents dropped from $1150 to $750. The mortgages were $950.

“Suddenly, the whole cash-flow was not working anymore,” said Bracknell.

A property manager ran off with two months’ rent and a deposit. Bracknell had no rent income.

The state raised its property taxes. The property tax went up from about $750 to $3,500 a year, said Bracknell.

Negotiating with bank: “I tried to contact my lender to try to make the payments, but obviously, they don’t want tot talk to you,” said Bracknell. “So you really have to default in order to get the bank’s attention.” That didn’t work.

Shortsale: “I decided to cut my losses there, because obviously I’m not able to recoup the money,” said Bracknell. “I hired a short-sale company, an investor group that makes offers on these houses … and negotiates the shortsale with the bank,” said Bracknell.

Credit cuts: Bracknell had two American Express cards, with credit limits of $18,000 and $38,000. Since 1996, “I have never carried balances, paid every balance for the last 13 years.”

In March 2009, American Express “cut my credit down to $2000.”

Business impact: For the aerial photography business, “I can’t rent helicopters or airplanes using credit cards or do business like I normally do.”

Sleepless nights: “I got some chest pains a few weeks ago,” said Bracknell. “I had my sleepless nights, sleepless weeks, months. But I decided I can’t give in to it.”

Responsibility: “To be honest, I don’t think I did anything wrong,” said Bracknell. “I put 20-percent down, full doc loans. I treated my tenants well.”

“But due to the economic climate, certain people got too greedy,” she said. “Small people on the street really have to feel it and change their whole life.

How she’s surviving: Savings.

Future: “I love real estate,” said Bracknell. “I love to actually help people to make the right decision. And that’s why I’m using all that experience … to give that advice to other investors, who now have the cash to do the investments and turn those properties around,” she said.
___________________________________________________________________________________

Woodbury’s settlement breakdown

$445,000 — Mortgage owed
$ 26,000 — Real estate commissions
$ 7,000 — Title fees
$ 16,000 — FIRPTA* tax
+ $ 13,000 — Penalties and late fees
—————————————-
= $507,000 — TOTAL OWED

Amount still needed to close

$507,000 — Total owed
- $475,000 — Sale price
- $ 25,000 — Loans and savings Woodbury brought to table
—————————————-
= $ 7,000 — Difference needed to close

Appraisal value 2006: $775,000

* Foreign Investment in Real Estate Property income tax for non-owner occupied properties.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, June 17, 2009

Michael Phelps, the Olympic Gold medalist swimmer, has signed a deal with San Diego’s H20 Audio to represent the company’s waterproof audio products. It is his first endorsement since photos ran last year of him using a bong.

“We are not disclosing financial details of the partnership, but it’s a multi-year deal similar to our other athlete agreements,” said Destin Judy (Judy is her last name), a company spokesperson, in an email.

“Most importantly, our goals for the partnership and mission for the sport of swimming are aligned: encourage more people to get in the pool, help people live a healthier lifestyle, and continue to provide the highest quality, best performance waterproof headphones and accessories for active people everywhere,” Judy said.

H20 Audio will market Phelps’ image at stores such as Target, Best Buy, Apple and Amazon.com. The marketing campaign will include promotional displays, packaging, photos and video. The products include waterproof headphones and accessories that can be used with Apple iPods while swimming.

“H2O Audio is extremely proud to welcome Michael Phelps to our team,” said Kristian Rauhala, founder and chief executive officer of the Sorrento Valley-based company.

Phelps plans on attending the 2012 London Games, according to a USA Today report.

Phelps was won 16 Olympic medals and 17 World Champion awards. After he admitted that the bong photo was him, Phelps was suspended from the USA Swimming Team for three months and cancelled by sponsor Kellogg’s. He continues to hold sponsorships with Visa, Speedo and Omega.

“Music has always been a huge part of my life and my training, and I am excited to partner with H2O Audio to help bring music to the water,” said Phelps in a prepared statement.

H2O Audio also has endorsement contracts with Olympic swimmer Natalie Coughlin and pro surfer Laird Hamilton.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Wednesday, April 1, 2009

Despite San Diego’s sagging retail market, one lingerie store hopes to lift sales, while helping women lift their assets.

Intimacy, an Atlanta-based lingerie chain, opened its first West Coast store in the Fashion Valley shopping mall on Tuesday. The 3,300-square-foot boutique features luxury European brands, offered with personalized service.

“We felt that San Diego would be a really nice place for us to enter the West coast market – a little less formidable than L.A., a little more lifestyle oriented,” said Susan Nethero, company founder, who is also known as “the bra whisperer” in the Lifetime series “How to Look Good Naked.”

Nethero, who trained under the Queen of England’s Royal Bra Fitter, is helping women tuck in, lift their chests and reshape their figures, in the new store this week. The company’s main selling point is personalized service, with 30-minute consultations, 95 bra sizes, A to K cups – and no measuring tapes. The San Diego store alone has 12 staff who only do fittings with customers.

On the first day in San Diego, sales were the “highest of any store opening,” said Nethero. Intimacy stores typically do $3 million in annual revenue, or $2,500 per square foot, she said.

The retail sector is among the weakest in San Diego’s economy, but Nethero said her company is filling an unmet need in the market. When working with each customer, “We help her get the right bra for her body frame and size, then we work the cup depth to make sure she has sufficient cup depth and the underwire lays below the rib cage, so she doesn’t overflow or underfill the cup,” explained Nethero. A bra is “the most private product that you wear and the most technical product that you buy,” she said.

“Because of the economic environment, people are looking for basics and fashion,” said Jean Luc Tienturier, president, Curvexpo, a leading lingerie and swimwear trade show. “Lingerie is not a very high-end price point in the fashion world – it’s an affordable luxury accessory.”

People are buying fewer items or more basic colors – such as white, black and beige – said Tienturier, “but they still buy.”

The women’s underwear market was more than $14 billion in 2008, up nearly 15 percent since 2006, although growth rates are expected to slow in 2009, according to a report released by Mintel, a market research group. “Women’s underwear is big business and will grow despite (a) tough economy,” stated the report’s analysts.

Bras comprised $8.2 million or 59 percent of the market, while panties were $3.5 million, or 25 percent in 2008, the December 2008 report stated.

High-end lingerie particularly appeals to younger women, according to Mintel’s report. In addition, bra fit is a “top priority” for manufacturers, “because of the large percentage of women who say they have difficulty finding a bra that fits properly. ”

Victoria’s Secret is the nation’s biggest lingerie chain, with more than $4 billion in annual sales, 20 percent of the U.S. lingerie market and 1,000 stores nationwide, said Tienturier.

Curvexpo’s Tienturier believed that Intimacy will do well in San Diego, because the company is “very professional,” he said. “Before launching a new store, they study a market very carefully.”

San Diego is Intimacy’s seventh store location.

Follow Helen on Twitter @HelenChang.

See original story on SDNN

Tuesday, September 15, 2009

The recession may be technically over, but San Diego’s businesses are still feeling it.

Business leaders and economists were responding to the Federal Reserve Chairman Ben Bernanke’’s comments Tuesday that “the recession is very likely over at this point.” Bernanke also said that unemployment would likely continue to rise.

“No one’s popping any champagne corks yet,” said Ruben Barrales, president of the San Diego Regional Chamber of Commerce. “At a macro-economic level, the recession may be ebbing, but the reality is we are in a soft economy right now and business people in San Diego are still faced with tough economic challenges.”

Businesses will need more time to see a turnaround, said Alan Gin, an economics associate professor at the University of San Diego.

“Spending is going to pick up, housing sales will continue to be good, but businesses will hold back before they start hiring people again,” Gin said. “They want to make sure the economy is fully rebound before they take on more jobs. ”

The residential construction industry will continue to drag down the overall economy, said Alan Nevin, an economist at Marketpointe Realty Advisors in San Diego. While the federal government has set aside stimulus funds for this sector, it was “a drop in the bucket” for what was needed, he said.

A strong residential construction industry is critical to the economy’s growth.

“Until that industry comes back, we will not have a healthy economy,” Nevin added. “It takes time and financing, and until the lenders are willing to open up their pocket books to developers, the developers will not be able to move forward.”

USD economist Gin believes job losses will continue rising through early 2010, as San Diego businesses remain cautious.

Barrales agreed that “It will be after a number of quarters of positive economic growth that we see unemployment actually stabilizing.”

This is because small businesses still face tight credit markets, said Barrales.

San Diego’s high tech and life science companies are also still “feeling the pinch,” said Moya Gollaher, executive vice president of Connect, a non-profit organization representing San Diego’s high tech and life science industries.

“We feel like (the recession is) continuing, because ready access to capital does not exist right now in ways that we see would contribute to the robust growth of start up businesses in San Diego.”

Still, San Diego’s economy has several bright spots, experts said.

California has started to pull out of recession and San Diego has not suffered as much as other areas, due to a diversified economy, said Marketpointe’s Nevin.

“We are in particularly good shape because of the military spending that’s going on here,” he said.

San Diego’s residential real estate market is also on a rebound, with housing sales moving up in the last several months, said Nevin. The number of foreclosures on the market has dropped from half to a third of inventory in the last year, while sales and prices are creeping up, he said.

The experts also agreed that general consumer confidence still has a ways to go in San Diego.

“There are some very positive signed, but it’s still a fragile economy,” said Barrales.

Nationally, recovery is only taking place in certain states, said Nevin. States where the economy is tied to automobile and other manufacturing industries — such as Michigan, Ohio and Indiana – are still hurting badly, he said.

In San Diego, businesses remain cautious.

“We need to move cautiously, but anticipate that the economy will eventually turn around,” said Barrales.

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Tuesday, June 2, 2009

Think of it as a job fair with booze.

The Pink Slip Party, founded in L.A., is having its first San Diego event Wednesday. It takes place in Balboa Park.

“The purpose is for people who are unemployed or looking for a career change to network with recruiters and companies that are hiring, in a casual relaxed environment,” said Beryl Smith, president, BCS Staffing, a Los Angeles-based recruiting firm

“It’s about getting in front of people and making that connection.”

For the San Diego event, 100 people have RSVPed and 10 to 15 recruiters have committed to attending as of Tuesday noon, said Smith. The recruiters represent companies with jobs in administration, accounting, sales, engineering and technical services.

The companies include Accountemps, Robert Half Technology, Colonial Life, Aerotek and Northwestern Mutual Financial.

Since March, Smith has organized four “Pink Slip Parties in L.A,” with 50 to 350 attendants each. She was inspired by “Pink Slip” parties, which have been around since 1910, when laid off factory workers gathered at taverns in New York.

In today’s work environment, face-to-face networking beats sending out resumes, said Smith. “It’s a great way to network with other unemployed people. You don’t know who knows who. It’s who do you know.”

Follow Helen on Twitter @HelenChang.