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Faces of New York businesses reflect market worries

Tuchman

By Gary Tuchman
CNN Correspondent

October 16, 1998
Web posted at: 10:39 a.m. EDT (1439 GMT)

In this story:

NEW YORK (CNN) -- Take a walk on the streets of Manhattan. Stop in shops and visit restaurants. Meet entrepreneurs from all over the world, and see prices ranging from the reasonable to the truly ridiculous.

Among even the most different types of businesses these days, you can observe a remarkable sameness in attitude: concern about the financial future.

Merrill Lynch
Merrill Lynch has announced plans to cut 3,400 jobs companywide  

The clearest cause appears to be the storm clouds over Wall Street, which are also casting shadows over Main Street in cities and towns across the country.

Though economic indicators suggest most Americans have not yet started to spend less, consumer confidence has been falling. Stock market fluctuations and economic crises in parts of the world appear to be taking a toll.

Concerns about the economy, mirrored nationwide, are strikingly reflected in New York, where the financial industry is so dominant and influential.

Bracing for belt-tightening

As the nation's largest brokerage house, Merrill Lynch & Co., announced it was cutting 3,400 jobs worldwide -- and amid expectations that other financial institutions could follow suit -- we paid visits to several Manhattan businesses this week.

Our first stop was a catering company. Steven Brown has seven employees, and his company specializes in corporate parties. Many of his clients are banks and brokerage houses, and with financial firms talking about layoffs, Brown fears he might have to make some of his own.

"The quality of orders will probably change substantially," he predicted. During the downturn in the early 1990s, for example, a large financial firm served "only strawberries and champagne" at its holiday party, cutting out the shrimp, filet mignon and open bar it had the year before.

Next stop: a florist's shop near Wall Street.

Florist George Boulos did not paint a rosy picture, saying that right after the 1987 stock market crash, seven of the 12 florists then in the Wall Street area shut their doors. So far, Boulos said, business hasn't suffered, but new talk of brokerage house layoffs has him worried.

Then it was time for us to drop in on one of New York's most elegant restaurants. The Four Seasons has been around for four decades, and its clientele consists of the successful. For many of the guests, money is no object.

Nevertheless, managing partner Alex von Bidder admitted, "I'm concerned anything that affects our customers will eventually affect us."

Hence, the restaurant has started offering a "fixed price" option: $59 per person, about 20 percent less than the a la carte price for the same dinner.

Co-managing partner Julian Nicollini was more optimistic. "I'm extremely confident we will survive this, and we're going to come out ahead."

Will the party end?

restaurant
The Four Seasons restaurant has introduced a fixed-priced dinner  

The Four Seasons has plenty of practice in coming out ahead. The booming 1990s have been good to the restaurant, and to many businesses in New York and the nation.

That makes any crisis of market confidence harder to take: Nobody wants the lavish and long-running party to end. Perhaps it won't just yet.

Many people we've talked with have been aware of the global financial gyrations but felt the United States was immune for now. The fact is that inflation, interest rates and unemployment all remain low.

But Wall Street's volatility appears to be helping change some opinions. Faced with losses on paper, not all investors' nerves are of steel, even in New York. And that could start to change lifestyles, perhaps especially in New York.

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