Reuters Summit-Financo Sees Debt Woes Weighing on Europe Retail
By Nivedita Bhattacharjee
NEW YORK (Reuters) – Europeâ€™s brewing debt crisis will likely spread to countries such as France and Britain and deeply hurt consumer demand there over the short to medium term, according to investment banking boutique Financo.
Financo Chief Operating Officer William Susman said economic troubles in Greece, Portugal and Spain will likely spill over to their neighbors.
â€œWhat the economies in Europe can go through in the next six to 18 months I think will be dramatic,â€™â€™ Susman said on Wednesday at the Global Reuters Luxury Summit in New York.
â€œRegarding Europe, I donâ€™t think that story has been told completely yet … thereâ€™s going to be a real customer revolt and lack of consumption in those countries,â€ he said.
Susman has worked with names ranging from high-end retailer Bergdorf Goodman and discounter Wal-Mart Stores Inc to consumer goods exporter Li & Fung.
In the shorter term, the start of the World Cup soccer tournament next month could give European shoppers an easy way to opt out of spending, he said. Comparable store sales could well take an extra hit in July and part of August, he said.
â€œPeople are going to watch TV and it will change patterns. And I think for Europe particularly, people, if they are feeling a little poorer, may stay home and watch soccer (rather) than shop,â€ he said. "â€Thatâ€™s a real issue … I do think you will have a pullback in Europe as a reflection of that.â€
U.S. retailers will also likely curtail expansion plans for Europe on the weaker economy and a strong U.S. dollar, he said, citing chains such as Abercrombie & Fitch, Brooks Brothers and Polo Ralph Lauren Corp. (Reporting by Nivedita Bhattacharjee, editing by Michele Gershberg and John Wallace)