Last December, times were described as "difficult." We have segued from "difficult" to "uncertainty." Whether "uncertainty" is any better than "difficult" is anybody's guess. I am writing this on the 17th of March, when sword-rattling and uncertainty loom over us all, surrounded by cymbals, drums, and bagpipes, for it's St. Patrick's Day...

You will be reading this at a later date. By that time, the uncertainty may be over and the world will be headed in a different direction, or perhaps not, but right now, "uncertainty" has become the byword of the day.

Uncertainty has brought with it complaints about the economy, employment, etc. making things seem most likely worse than they are.

For example, the real Gross Domestic Product has expanded for five consecutive quarters in this country, averaging 2.7 percent. Consumer spending rose, but not as high as had been hoped.

For the year 2003, Bear Steams economists are forecasting a real GDP growth of 4.0 percent. Last December, personal income rose 0.4 percent, on top of a 0.3 percent gain in November. This January, unemployment fell 30 basis points 5.7 percent, down from 6.0 percent in December. That's not all that bad, is it?

In the Luxury markets, the Bear Stearns Luxury Ledger Stock Index in a year over year basis, fared much better than world markets in general. In 2002, the Luxury Ledger Stock Index considerably outperformed most world markets. Coach was by far the best-performing stock. Others were Christian Dior, Wolford, Gucci Group, and LVMH. Over the long term, the industry fundamentals remain strong.

New York City is still the leader, uncertain times or no, still the capital of the world. Its magnetism draws retail from around the world. Everyone shops in New York, for necessity and pleasure, all the time. People from all over the world come here for many reasons, but usually end up shopping...

The luxury real estate is market is strong. There is expansion - the big are getting bigger and tenants vie each other for available space, when space is available:

On Fifth Avenue, Luxury Walk: Badgley Mischka will open a Bridal Salon on Escada's lower level. The Liz Claiborne flagship store is converting to Mexx. FAO Schwarz is set to open a boutique in Saks Fifth Avenue. LaCoste will open at 608, southwest corner of 49th Street and Benetton is moving next door to itself - 597 to 601.

Along the Golden Mile of Madison Avenue: Face Stockholm is now at 1263. Dean & DeLuca at 1150. Exhale at 980. Mark Garrison moved from 980 to Park Avenue. Park Gallery is at 974. Galo is moving from 692 Madison to 895. Via Spiga will take over 692. Silvano Lattanzi has opened at 874. Bruno Magli to take Cerutti's place at 789, 67th Street. Kaufmann de Suisse will open at 785.

Chopard purchased a townhouse at 21 East 61st Street for its headquarters, very near the boutique at 725 Madison.

Jimmy Choo to open a second Manhattan store at 716. Mont Blanc is moving across the street - 598 Madison Avenue, northwest corner of 57th Street, next to Dior. The first Talbots Men in New York is coming to 527 Madison, where it will be joined by Talbots Kids, adjacent to the present Talbots Women at 525. Jurlique has opened at 477. Roche Bobois at 200, on the northwest corner of 35th Street.

On East 57th Street, Luxury Crossroads: Yves Saint Laurent is moving into the former Levis, No. 3, next store to the LVMH flagship. Dior Homme will take the place of Christian Dior Joaillerie at 21. The Joaillerie will become part of the Christian Dior Boutique.

On West 57th Street, The U.S. Golf Association has bought the Russian Tea Room building.

Just off Fifth Avenue: Beverly Feldman has opened on East 56th Street, Alan Flusser at 3 East 56th Street, and Kiton's American headquarters will be at 4 East 54th Street, on the northwest corner, formerly Banco di Napoli.

On the Upper East Side, Cantaloup will be at 1036 Lexington Avenue, on the northwest corner of 74th Street. Marimmeko has moved from Madison Avenue to Third Avenue, as has Maurice Villency - to the Southeast corner of 57th Street. Aerosoles is set to open at 148 East 86th Street.

New tenants at the AOL TimeWarner Center are to be: Sephora, Thomas Pink, Tourneau, and Crabtree & Evelyn. Cache is moving from Trump Tower to the AOL Center.

Victoria's Secret has opened a megastore on Herald Square.

In the Flatiron District, Arden B. will be at 104 Fifth Avenue, on the block with Paul Smith. Aerosoles will be at 168 Fifth and Ann Sacks at Fifth and 18th Street.

In the Meatpacking District, The Hotel Gansevoort to open next fall. Rescue Beauty Lounge to open a third spa at 34 Gansevoort Street. Edrin Nicholls, celebrity hairdresser will open a salon in the near future, as will Sally Hershberger, hairdresser to the stars, next to Jeffery on West 15th Street.

Three newcomers to Howard Street: E. Vogel, No. 19; Ted Muehling, No,. 27: and Benjamin Cho, No. 35.

Design Within Reach will be opening at 408 West 14th Street. Jackie Rogers has opened at 34 Little West Street.

In Tribeca, Jean-Georges Vongerichten will open a traditional Chinese cuisine restaurant early next year.

The reclamation of Soho continues: Charles Worthington will open his first hair salon outside the U.K. at 568 Broadway. Bloomingdale's is taking over the Canal Jeans location also on Broadway. This will be the largest store to open in New York since Barneys ten years ago. Arden B. is opening another store at 532 Broadway. Pearl River Mart is moving from Chinatown to 477 Broadway. The Lounge, lifestyle retailing to open on lower Broadway.

However, the Museum of Contemporary Art is moving from 583 Broadway to -The Bowery, 235...

Flou is coming to 42 Greene Street. La Perla. 93 Greene. Sharper Image, 98 Greene. Natuzzi at 101-103 Greene and Helmut Lang is opening his flagship on Greene Street.

Marithe & François Girbaud is opening at 47 Wooster Street. There will be another Design Within Reach at 142 Wooster. Adidas Originals is opening on Wooster, 134-136.

Barry Keiselstein-Cord is coming to West Broadway, rebranding at Barry Cord. D&G is expanding, taking over the Furla location at 430 West Broadway. Robert Marc will open a seventh store at 436 West Broadway.

Carlos Lizan Designs will open a second store, 96 Grand Street. The only stateside branch of Inxert will be at 500 Broome. Custo Barcelona will also be on Broome. between Greene and Wooster. Henro Antiques is moving from 462 Broome to 66 Crosby. Costanca Basto is coming to 573 Hudson Street.

In Nolita, Gracie is returning to Lafayette Street, after one hundred years. Objets du Desir will be 241 Mulberry Street and Saigoniste at 239. Crumpler, from Australia, will open at.
45 Spring Street, The Apartment, at 101 Crosby, and Dinosaur Designs at 250 Mott Street.

In Chelsea, Balenciaga will be on West 22nd Street, between Tenth and Eleventh Avenues. Comme de Garçons is nearby. Portico is moving to Chelsea Market from Tenth Avenue.

W Hotels is expanding into retail with the W the Store boutiques. The first boutique will be in the Times Square hotel and three more are planned. Merchandise in each store will be edited to to suit the location.

So ends my report. As I wrote before, by the time you read this, it may be quite irrelevant to what is going on. Then again, it may not - it's all so uncertain.

Faith Hope Consolo
Chairman, Retail Leasing & Sales Division
Prudential Douglas Elliman
Tel: 212-418-2020 / Fax: 212-418-2005