RE:RE:My two centsThe portion of the economy thats slowed down the most is housing as its the most interest rate sensitive. Eventually consumers will cut back on apparel spending.
There are some advantages to this for Reitmans
1) There are over 65 million dollars earning over 4% interest
2) There was a lack of skilled people in the building trade while housing was being constructed. New starts are down. Management indicated that they wanted to open new PENN stores. Skilled labour is required.
3) The threat of a recession means less new competition. Apparel companies can fail for any number of reasons during the best of times. Just to name a few: debt, arrogance, poor sense of fashion, short-term horizons, inadequate skills and resources.