How to Tell Business Is Cutting Back
From fewer shoe shines to a slowdown in corporate art purchases, subtle bellwethers can help take the temperature of business activity
By John Tozzi
Nelson Villanova doesn't need to watch the stock market indexes, the TED spread, or gross domestic product to gauge the health of the economy. He just has to look down. If he sees scuffed shoes, then he knows things are bad.
Villanova, general manager of Eddie's Shoe Repair in New York's Grand Central Terminal, has seen business drop 25% to 30% since August. The 15-year-old company employs 40 people across five locations in the sprawling train station, shining and repairing shoes and luggage. But lately, selling $4 shines seems to be as hard as unloading mortgage-backed securities.
The condition of commuters' shoes is just one signal of the financial crisis rippling through the business world. Other indicators emerged even before the market meltdown began in September: This summer FedEx (FDX) shipped 10% or fewer overnight envelopes than last summer. Business jet takeoffs and landings were down 18% in August. And office-supply sales have dropped every month since December 2007.
Though not all are based on hard data, subtle bellwethers can help take the temperature of business activity and offer a look into what businesspeople are thinking. In Manhattan, the epicenter of the financial crisis, small firms like Eddie's Shoe Repair that cater to the business elite often serve as the proverbial canaries in the coal mine.
Growing Cautious
At Andrew's Ties, a Madison Avenue-shop that sells handmade Italian silk neckties that range from $49 to $99, sales began to drop off in March, the month Bear Stearns collapsed, says Yannis Tselepidis, the store's g ...