| April 1, 2001, Sunday
Split the Check: New York's Free Lunch Is Gone
By RACHEL LEHMANN-HAUPT (NYT) 1899 wordsHERE'S news from a leading economic indicator -- Jim's Shoe Repair on East 59th Street, where the other day the seats were filled with waiting customers and conversation was humming.
An Hèrmes salesman in a pink button-down shirt lamented that traffic in his Madison Avenue store, home of the $385 beach towel, has slowed since its gaudy opening party last fall. A silver-haired mortgage consultant, Robert Haney, said that he's given up eating at the Metropolitan Café near Sutton Place and is patronizing a local diner for his hamburger and fries. And Jim Rocco, the shop's owner, said these days people are only repairing what is absolutely necessary, though few are giving up a shine. ''It's a small luxury when you have to cut out the big ones,'' Mr. Haney said. ''Instead of buying new shoes, I'll have my old ones resoled.''
Shoes may be shinier, but from Madison Avenue to SoHo, the Upper West Side to the Flatiron district, there is a duller consumer mood, and a lot of talk of personal retrenchment. The $4 double-shot latte is being replaced with coffee brewed at home. The $100 business lunch at the Mercer Kitchen has become the $40 lunch at a low-key no-name restaurant near work.
With the stock market still probing desperately for a bottom, as investors say, and daily reports of layoffs coming in big round units of 5,000 and 10,000, the sense of uneasiness is spreading, even if a majority of economists say the country will avoid a recession.
The number of those actually pink-slipped, like well-publicized dot-com workers, may be small; but a perception of coming hardships is widespread, and it is causing people to retrench. They are dressing more soberly, taking their entertaining into the privacy of their homes and cutting back on luxuries that had come to seem like necessities -- California cult wines, summer rentals, retro-hip George Nelson sofas. New York's wild party is winding down.
''A year ago I wouldn't bat an eye over buying a $4,000 couch,'' said Chris Leba, 37, a clothing designer. ''I don't make any less money now, but my mind-set has changed because I've lost a lot in the stock market. Now if I see a great couch I'm not going to buy it, because it would be tacky to spend that kind of money when so many people I know are getting laid off every other day.''
The worlds of style track the economy -- not just in the obvious sense that consumers spend less when money is tight and they are pessimistic about the future; the message conveyed by what they buy also changes. During the big economic hit of the early 1990's, restaurants sought to soothe the shellshocked with value-oriented comfort food, discos gave way to quiet lounges and fashion faded to minimalist black. There was a moralizing overtone to those adjustments, a repentance of the opulence of the 80's.
The economic slide of 2001 is nowhere near as severe, and may never become so. But already the style world is registering a mood shift. At last month's European runway shows for fall 2001, black returned as a dominant color, and there were echoes of the somber, withholding fashions of early-90's Prada and Helmut Lang.
''There is very little frivolity, and that was a big thing a season ago,'' said Katherine Betts, editor in chief of Harper's Bazaar. ''Everything from fur to bright pinks and reds. There was this whole pop generation of bright prints and bright graphics. It was over the top. I think people will feel self-conscious wearing that now.
''In general the whole social mood is like that. ''We were planning a whole party issue, but no one seemed interested in parties. Puffy and paparazzi and the downtown parties have sort of disappeared. It's not just the economy, it's the whole extravagance of being public. I think people are sort of turned off by that now. People are getting more private again.''
Vicki Ross, a fashion consultant for L'Oréal and other companies, said: ''I don't see myself buying something really expensive right now. I'd rather buy something from a vintage store. Something that is beautifully made and has gorgeous buttons, rather than some seasonal trend item in the department store.''
Nationwide, sales at department and specialty store chains, including Saks, Bloomingdale's and Macy's, were down in February, the latest figures show. Kurt Barnard, president of Barnard's Retail Trend Report, said: ''There has been no change among the very wealthy, but people who over the last couple of years have graduated from traditional department stores to specialty stores have become more cautious, because they don't have accumulated wealth and they spend much of what they earn. They were buying expensive designer clothes, jewelry and cars. Now they are buying more for their home. In times of instability, the home is a bulwark against the uncertainties of life.''
Stephen Weiss, 24, understands that. A year ago he was working 70-hour weeks for RedFilter, an Internet direct-marketing company, and though he never lived lavishly, he could go out every evening, taking advantage of the endless round of Silicon Alley parties, where the drinks and hors d'oeuvres flowed freely.
Since RedFilter went out of business a month ago, he has been spending quiet evenings at home. ''I've been cleaning out my apartment because for the past two years I've been throwing everything into bags because I was too busy to organize it,'' he said.
''I was never living that large,'' he added. ''I was making in the mid-20's, but it was more about the expectations. Most of us thought there was a chance that we could be millionaires. The worst thing I did last year was to tell my mother that this time next year she could retire.''
Casey Kait, his girlfriend, 23, who was also recently laid off from her job as an associate editor at Salon.com, the online magazine, said that even before losing a paycheck, she had begun scaling back. ''I was working on Fifth Avenue in the Flatiron district, and during the boom I would often go to Intermix at lunch and buy a $100 shirt,'' Ms. Kait said. ''Not only did I start to bring my lunch to work, but I would eat it at my desk so I wouldn't go out and shop.''
Mr. Weiss and Ms. Kait are now living, modestly, off the book advance for an oral history they are compiling, ''Digital Hustlers: Living Large and Falling Hard in Silicon Alley,'' to be published by ReganBooks.
Among Internet executives with jobs still to go to, Ken Kurson, editor at large of Money magazine and the founding editor of Green magazine, a personal finance publication for young people that folded in February, has noticed that they no longer dress in aggressively casual styles. ''Now they're trying to look like they could fit in at I.B.M. in 1969, to show their investors that they can act more fiscally responsible,'' he said.
The dot-com workday has shrunk from 14 hours to one more typical of other industries, Mr. Kurson observed, now that dreams of stock-option fortunes have died. ''Nobody is working crazy hours,'' he said. ''I think President Bush has something to do with it. He works until 6 and goes home.''
Even the furnishings of Internet companies are coming down to earth. ''It used to be if a company had fancy furniture and a nice office, that meant they were doing really well,'' said Brad Farkas, the managing principal of i-Hatch Ventures, a Manhattan venture-capital firm with a portfolio of technology companies. ''Now if we go visit a company and it's all furnished with Ikea and other failed dot-coms' furniture, that speaks well of them.''
The expectations of coming misery casting a shadow over discretionary spending are the flip side of irrational exuberance.
''You had a lot of people who were very prosperous in the stock market or from the Internet and wanted a taste of the good life,'' said Jason Ader, a leisure analyst with Bear, Stearns, ''so they stretched their resources to stay in the best hotels and eat at the best restaurants. That demand has all but dried up. I've started to get reports that restaurants' Monday, Tuesday and Wednesday business is slowing, and lunch is much slower.''
Restaurants are always a bellwether of New York's mood, sensitive to everything from expense-account entertaining to the courtship rituals of singles. And here, the report is mixed. There are no mass closings, as there were a decade ago. Ambitious chefs continue to announce new projects, like Jean-Georges Vongerichten, who is coming to the meatpacking district, his business partner said last week.
Tim Zagat, the restaurant guide publisher, said places that are feeling a crunch are overpriced scene restaurants, while midpriced bistros are doing better because they attract diners in a cautious mood. ''I'm not sure if it's the weather or the economy, but things were slower this winter,'' he said. ''I wouldn't go so far as to call it austerity, but I think people are being more selective and thinking about the value more than when money was sloshing around and they didn't think twice about slapping down an extra $5 tip.''
John Harding, marketing director for Restaurant Associates, which owns Café Centro, Cucina & Company and the Brasserie on East 53rd street, confirmed that. ''Business is still pretty strong in our mid-level restaurants,'' he said. ''The Brasserie is as strong as it was this time last year.''
''There is a belt tightening that I think has a lot to do with perception rather than reality,'' he added. ''I think this perception has many people cutting back on expense accounts.''
Mark Wood, the owner of Canteen in SoHo and Commune in the Flatiron district, two restaurants known more for their scenes than their kitchens, has noticed a wind shift on Tuesday nights, typically a big night out for Wall Streeters.
''They used to come out and bring parties of six and eight for dinner and buy many bottles of wine,'' Mr. Wood said. His bars are busier than ever, he reported, and filling up earlier, but few stay for dinner. ''They seem to be going to the bar right after work to have a few drinks and then going home to order in.''
At the ''21'' Club,
the financial industry stalwart where deals have traditionally been
celebrated with expense-account meals in the mid-four figures, Chris
Shipley, the wine director, has seen a slackening in demand for
California cult wines, your Screaming Eagles and Harlan Estates. ''A
lot of young people who made a lot of money on the stock market were
buying these wines,'' he said, driving prices up to $5,000 a case.
''They are almost like Internet stocks. Their values were inflated way
beyond their intrinsic worth. I will continue to buy them, but I expect
the days of restricting the sales in order to keep them on the list are
over. In the past a party would come in and drink the entire year's
allotment in one night, but it seems the feeding frenzy is calming