Despite the slumping price of oil, high-end Houston stores are insisting it's business as usual. In fact, many saw record sales and traffic in December 2014. But they're also keeping a close eye on the energy market.
That's according to a recent article in Women's Wear Daily, which argues that Houston's recent and continuing construction boom will help offset the oil bust.
Included in that development frenzy is River Oaks District, a mixed-use complex currently under construction with a bevy of designer stores signed on as tenants, as well as as kick-butt real estate market that is still roaring ahead with apartments, condominiums and record home sales.
"The rich are still rich, even if their net worths and royalty checks have been slashed in half."
"The rich are still rich, even if their net worths and royalty checks have been slashed in half," the article continues, referring to comments from upscale merchants in the Bayou City and the Dallas-Fort Worth area. Most likely to feel the pain of dropping oil prices in Texas are Midland and Odessa, as well as South Texas cities that have benefited from the Ford Eagle Shale, mainly Corpus Christi and San Antonio.
"Too much else is going on [in Houston], and we have a diverse customer,” Calli Saitowitz, owner of BB1 Classic in River Oaks, tells Women's Wear Daily. “Obviously, gas prices this low are not good for Houston, and the wealthy will be in a little bit more control of their pocketbooks, but they still have money."
Houston will gain jobs, but at a smaller rate of growth, Bill Gilmer — director of the Institute for Regional Forecasting at C.T. Bauer College of Business at the University of Houston —told the publication, which focuses on the retail scene in the United States and around the world. Gilmer predicts a gain of 40,000 jobs, less than the more than 100,000 jobs created in each of the past three years. The bulk of the new jobs are blue-collar construction ones.
Yet there is a silver living in the falling oil prices, the article states. For every penny decrease in a gallon of gas, $1 billion in savings is pumped into the national economy, according to a report from the Automobile Association of America.
Lower gas prices may even profit the middle and mass merchants as customers will have more discretionary money, the report says.