Industry Research

Back In The New York Groove

Posted on August 5, 2009 by LCT Staff - Also by this author - About the author

NEW YORK — Dennis Turcinovic, managing partner of Delmonico’s steakhouse, said he knew things were looking up when a table of Wall Streeters ordered a $4,000 bottle of Far Niente Cabernet Sauvignon last month. It was the first he had sold since January.

“We’re seeing the old times coming back,” said Turcinovic. “People are starting to spend a little money again.” The restaurant, which used to sell about 10 four-figure bottles a week before last September, has sold that many since June, he said.

With investment banks reporting profits again — and record earnings at Goldman Sachs Group Inc. — there are signs of recovery among the businesses their executives patronize. Revenue at the restaurants, car services, and headhunting firms that cater to Wall Street slumped as much as 60% after the collapse of Lehman Brothers Holdings Inc. in September.

According to the New York State Department of Labor, about 37,500 jobs in the financial industry were lost between last August and May 2009.

Delmonico’s, a 172-year-old Manhattan steak house which gets 60% of its business from Wall Street firms, said revenue has increased about 5% since June.

Passenger traffic at US Helicopter, which carries executives between Manhattan and John F. Kennedy International Airport and New Jersey’s Newark International Airport, has increased since May, said Donal McSullivan, chief marketing officer.

‘It’s Real’

The company, which had cut the number of trips it offered by 10% to 15% starting last September, has started adding flights to its schedule to keep up with demand, McSullivan said. It now runs 44 trips a day from two heliports along the East River, one downtown near Broad Street and the other near East 34th Street. Price of a one-way 8-minute flight: $159.

“It’s gradual, but it’s real,” McSullivan said in a telephone interview. “We’re seeing a trending in the direction that pleases us.”

The New York State Comptroller’s Office estimates that every securities-industry job created tends to create three additional jobs, two in the city and one in the suburbs, spokesman Robert Whalen said.

“We’re seeing some things that are positive and encouraging,” Whalen said in a telephone interview. “If you see the business owners and restaurants telling you they are starting to see more business, maybe that’s a sign of confidence coming back.”

‘Slowly Trickling Back’

Headhunter John Warren, president of New York’s A-List Associates Inc., said his business has improved by about 30% in the last two months, based on the number of job openings his customers are looking to fill. That’s the first improvement since March 2008. About 90 percent of his customers are from the financial sector, Warren said.

“I see a lift,” Warren said in a telephone interview. “The light at the end of this tunnel is slowly trickling back, but it’s slow.”

Cipriani Wall Street, a catering and events company that gets about 15% of its business from banks, is seeing an increase in bookings for holiday parties compared with last year, said Rachel Adler, a company spokeswoman.

The dining room at SHO Shaun Hergatt, a seven-week-old Asian-French restaurant on Broad Street in the financial district, has gotten busier over the last two weeks and the eatery is taking reservations for private catering and events later in the year, according to Shaun Hergatt, the chef and owner.

Complimentary Cookies

Fresco on the Go, a restaurant and catering company with a location on Pearl Street about a three-minute walk from Goldman’s offices, this month had its best two weeks since it opened last summer, according to Elaina Scotto, one of the owners. Fresco on the Go’s catering business has picked up, including a recent dinner for 50 people at Goldman.

Goldman’s record earnings in the second quarter came as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.

“People are very cautious,” Scotto said in a telephone interview. “Even if they are ordering the catering, we will do it in a way that works in their favor. We work with budgets, we’ll do a complimentary cookie or dessert tray.”

Alex Chertakovsky, owner of Summit Express Car & Limousine Service Inc., said his New Providence, New Jersey-based business is down about 15% compared with a year ago.

While 40% of his revenue is from firms including Goldman, Barclays Plc, Deutsche Bank AG and Citigroup Inc. — that used to be more like 60 percent — he said he is getting an increase in patronage from smaller financial companies.

“They’re traveling, they’re entertaining, they’re going out,” Chertakovsky said in a telephone interview. “They’re actually doing more business with us than big firms. They’ve been doing very well.”

Source: Bloomberg News

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