Retail Merchants of Hawaii Newsletter

Fall 2009 | Volume 3 | Issue 2HAWAII RETAILER JOURNAL E-NEWSLETTERCommitted to the Growth and Development of the Retail Industry in Hawaii

2009 Annual Conference | Ho’okela Program | Ho’okela Finalists Governor’s Award: Watanabe Ing LLP | Trade Show & NetworkingNo Economic “Recovery”: It’s a Recalibration | Global Trends & Gatherings Mahalo to our Renewing and New Members | August Seminar: Paper or Plastic Officers and Directors for 2010

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STRIVING FOR EXCELLENCE OCTOBER 15, CORAL BALLROOM HILTON HAWAIIAN VILLAGE BEACH RESORT & SPA

2009 Annual ConferenceGovernor’s Award: Watanabe Ing LLPHo’okela ProgramTrade Show & NetworkingPresident’s MessageHo’okela FinalistsGTG (Carolanne will send)August Seminar: Paper or Plastic – Sharon took photos (I haven’t seen them yet.)

2009 Ho‘okela Conference and Awards

Marketing trends: Using social Media for BottoM line resUltsis the first seminar. Developed and moderated by Anne Murata, Director of Marketing & Business Development, Pacific Aviation Museum Pearl Harbor, these innovative and professional marketers will share their expertise: Melissa Chang, Melissa H.J. Chang, APR, Marketing Consultant; Nathan Kam, Vice President, Travel & Tourism, McNeil Wilson Communications; and Dan Zelikman, Senior Media Planner, StarrTech Interactive.

The second seminar, first sUrvive. then thrive … it’s a new econoMy ,brings a panel of distinguished retailers to share their strategies, not only for surviving, but, more importantly, for preparing for the future: Elise Burkart, Chief Financial Officer, City Mill Company, Ltd.; Cindy Mikami, Chief Operations Officer, Jeans Warehouse; Maile Meyer, President, Native Books / Na Mea Hawaii; Gina Pohlabel, Human Resources Business Partner - Target Stores. Dennis Higashiguchi, Manager, Consulting Services, N&K CPAs, Inc., will moderate.

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2009 Annual Conference to Focus on Maximizing Opportunity

Hawaii’s economy is difficult; all industry segments are examining all aspects of their operations to re-evaluate, update, and streamline. The employment market is in flux as businesses have closed and/or employers cut back. For a labor-intensive industry like retail, these conditions have critical implications.

The RMH Annual Conference, Ho’okela, Striving for Excellence, on October 15, 2009, at the Hilton Hawaiian Village Beach Resort & Spa, will focus on addressing operational issues. How do we reach out to new customers and maintain the loyalty of our existing customers? What about our employees? They are not only our most-valued asset but also our primary customers. We must maximize every part of our business activity.

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PRESIDENT’S MESSAGE

The Conference begins at 7:00 am with the opening of the Trade Show and continental breakfast. For 2009, we have expanded the opportunities of the Trade Show by extending the exhibit and networking periods to over two hours. Attendees visiting every exhibitor will be eligible for great prizes.

The highlight of the annual conference is the Ho’okela (Retailer of the Year) awards presentation. The prestigious Ho’okela awards recognize and honor Hawaii’s outstanding retailers and retail employees. To receive such acclaim in an industry so vital to Hawaii’s economy is a tremendous accomplishment. The categories are: Retail Business of the Year by County: Hawaii, Maui, Kauai, Oahu; Retail Employee of the Year; Neighborhood Retail Business of the Year; Resort Retail Business of the Year; Best NEW Retail

Business of the Year; E-Commerce Retail Business of the Year, Retail Business of the Year – State of Hawaii and Hawaii Retailer of the Year.

We are honored to announce that Watanabe Ing LLP is the recipient of the 2009 Governor’s Award for Exemplary Service to the Retail Industry.

So … the luncheon menu is planned … the red carpet is being readied … the nomination forms have been distributed …and the finalists have been announced. This is the premier not-to-be-missed event for Retail Merchants of Hawaii, so send in your reservations for Ho’okela 2009 ~ Striving for Excellence, October 15, 2009 in the Coral Ballroom, Hilton Hawaiian Village Beach Resort & Spa.

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Ho‘okela

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7:00 am Continental Breakfast / Trade Show & Networking

8:00 am SEMINAR I Marketing Trends: Using Social Media for Bottom Line Results Melissa Chang, Melissa H.J. Chang, APR, Marketing Consultant Nathan Kam, Vice President, Travel & Tourism, McNeil Wilson Communications, Dan Zelikman, Senior Media Planner, StarrTech Interactive Moderator: Anne Murata, Director of Marketing & Business Development, Pacific Aviation Museum Pearl Harbor

9:15 am Trade Show & Networking

10:00 am SEMINAR II First Survive. Then Thrive … It’s a New Economy Elise Burkart, Chief Financial Officer, City Mill Company, Ltd. Cindy Mikami, Chief Operations Officer, Jeans Warehouse Maile Meyer, President, Native Books / Na Mea Hawaii Gina Pohlabel, Human Resources Business Partner - Target Stores

Moderator: Dennis Higashiguchi, Manager, Consulting Services N&K CPAs, Inc.

11:15 am Trade Show & Networking

12:00 pm Luncheon & Ho’okela Awards 2:00 pm Pau

Ho‘okela 2009 Striving for Excellence, RMH Annual Conference & Ho’okela AwardsThursday, October 15, 2009 7:00 am to 2:00 pm

Coral Ballroom, Hilton Hawaiian Village Beach Resort & Spa

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Retail Business of the Year – KauaiKauai Enterprises dba Tire Warehouse KauaiM. Miura Store Inc. dba Déjà VuTalk Story Bookstore

Retail Business of the Year – OahuGoodwill Industries of Hawaii, Inc.Pioneer Promotions Inc. dba As Seen on TV Store HawaiiRobins Hawaii LLC dba Robins

Retail Business of the Year – HawaiiBig Island CandiesKona Stories LLCPahoa Auto Parts Inc & Pahoa Auto Repair LLC

Resort Retail Business of the YearABC StoresLeather Soul LLCSurf Line Hawaii, Ltd. / Jams World®

Retail Employee of the YearNorma Itagaki, Woodcraft Frank Suster, City Mill Company, Ltd.

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Ho‘okela Awards

The Ho’okela (Retailer of the Year) Awards recognize Hawaii’s outstanding retailers and retail employees. To receive such acclaim in an industry so vital to Hawaii’s economy is a tremendous accomplishment.

Neighborhood Retail Business of the YearBamboo River LLC dba The Wedding Café Strong Current Hawaii LLCThe Education Com any dba Education Works

E-Commerce Retail Business of the YearElsie Kay Inc. dba Muumuu HeavenRabbitt In Paradise LLC www.rabbittinparadise.com

Best New Retail Business of the YearBamboo River LLC dba The Wedding CaféChrome Hearts LLCVirgo USA, Inc. dba Anteprima

Retail Business of the Year – State of HawaiiCrazy ShirtsLongs CVS/CaremarkWalmart Stores, Inc.

Retailer of the Year John Geppert, Tiffany & Co.Roy Hung, Goodwill Industries of Hawaii, Inc.Michael Zhang, Blue Hawaii Lifestyle

Governor’s Award for Exemplary Service to the Retail IndustryWatanabe Ing LLP – Lori Lum

2009 HO’OKELA FINALISTS

http://www.rabbittinparadise.com

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Watanabe Ing LLP Public Affairs Group(Managing Partner J. Douglas Ing, Public Affairs Director Lori Ann Lum)

In 1971, a young group of attorneys founded the firm that is now Watanabe Ing LLP with the goal of creating a law firm managed and organized differently than the commercial firms of that day. Since its inception, the firm acknowledged that legal clients would, at one time or another, need to navigate through Hawaii’s complex cultural environment and legislative process.

As the firm’s largest non-legal consulting group, the Public Affairs team provides government affairs services and strategic counseling on public policy issues.

Retail Merchants of Hawaii retained the Watanabe Ing Public Affairs Group in 2000. During this nine-year partnership, advocacy on behalf of the retail

industry has spanned a multitude of issues - plastic bag bans, gift card laws, retailer redemption of HI-5 containers, tax and labor laws – on different islands, before State and County governments.

RMH is represented by Director Lori Ann Lum and Advisor Dana Harvey-Gusman. The Watanabe Ing team also includes Jeannine Souki and Kuuhaku Park with support from Allison Nakama and John Garibaldi. Each January, the team pours through the thousands of bills introduced by the Hawaii State Legislature, works with RMH’s President and Government Affairs Committee to identify the most beneficial and egregious initiatives, and closely tracks them through the legislative process. The team supports Carol Pregill’s efforts to analyze issues, develop message points, testify in hearings, and advocate for and effectively represent RMH’s membership.

2009 Ho’okela Striving for ExcellenceTrade Show & Networking

An exciting component of the RMH Annual Conference is the networking opportunity for members … over two hours of exhibit time to showcase your company to retailers! Visit our exhibitors in the Coral Ballroom Foyer from 7am to noon!

Bank of HawaiiBig Island CandiesComputantFirst Hawaiian BankHana Hou! MagazineHawaii National BankHonolulu MagazineHMAAICESPacRim Marketing GroupRoyal Hawaiian CenterThe Honolulu Advertiser

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No Economic “Recovery”: It’s a Recalibration.

The economic crisis has been written and talked about, analyzed, picked apart, hind-sighted and fore-sighted ad nauseam. Therefore, with supporting research and analysis conducted by KSA (Kurt Salmon Associates), I will simply serve up the highlights of how and why we got in this mess, what makes it different from all other recessions, including the Great Depression, why it won’t go away anytime soon, and why and how it will effect

consumption, and therefore, retailing for years to come. First of all, over the past 25 years we have been building a “sea of stuff,” across all industries, including retailing and all the stuff purveyed in those stores, more stores and stuff than people needed, or even wanted. It was the same with automobiles, airlines, books, and, of course, housing as the “straw that broke the camel’s back.” Simply, the whole economy, fuelled by free money and the leveraging of


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No EconomicRecovery IT’S A RECALIBRATION

The President’s Message is

on “hiatus.” I want to share

this interesting and insightful

perspective from a fellow-

member of the Fashion Group

International. Robin Lewis is

Vice President at Vantage

Marketplace at Goldman Sachs

/ Vice president at Vantage

Marketplace LLC.

By Robin Lewis

No Economic “Recovery”: It’s a Recalibration. BACK | CONTENTS | NEXT

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such, built horrific and unsustainable over-capacity. Such growth was only sustainable as long as consumers were also given free money to sop it all up. Well, as the last “straw” of sub-prime mortgages, along with innovative and enormously risky financial engineering, and, finally, consumers borrowing beyond their means, all culminated in one frenzied, greedy and compulsive binge between 2002 and 2007, it was not sustainable. In fact, it was not real. There was nothing real to support that level of debt, and excessive consumption. It was all fuelled by nothing more than paper, magically manipulated by our “best and brightest” young financiers to fool even the iconic Fed chief, Alan Greenspan, enough for him to declare that these were “brilliant

instruments that would spread risk.” Ironically, and almost simultaneous to Mr. Greenspan’s declaration, the equally iconic investor, Warren Buffet, declared them “WMD” or “weapons of mass destruction.” Well, these pieces of paper did spread the risk, all around the globe, as Mr. Greenspan said they would. However, then these pieces of paper exploded like “WMD” as Mr. Buffet said they would. And, while sub-prime mortgages and derivatives, including credit default swaps, may have been “ground zero,” the fundamental and “game changing” reasons for this crash were: 1) unabashed and un-regulated greed on the supply side, as well as 25 years of building over-capacity to fuel the greed, and, 2) a consumption-obsessed consumer on the demand side, to the point where over 70% of

our economic growth is derived from consumption, (in the middle of the last century, when this country was producing “stuff” that was needed, and had real value, that percentage belonged to manufacturing). Unlike the structural economic characteristics of the Great Depression and all past recessions, there are four dynamics that differentiate this meltdown: 1) unprecedented national and personal debt, 2) innovative financial “engineering,” 3) globalization, and 4) sophisticated technology enabling the speed with which those “WMD’s” were spread around the world. Here’s the growth of the global “WMD bubble:” in 2002 worldwide debt was about $55 trillion, or 2.5 times worldwide output, (and the U.S. was about $40 trillion of that total); by 2007, worldwide debt

reached $600 trillion, or 11 times worldwide output. Equally unprecedented, yet the only reason we’ve so far avoided the economic collapse of the Great Depression, are the trillions of dollars we’ve printed and continue to “throw at” all parts of the crisis. In effect, all these trillions are simply managing the economy down to a new sustainable level, thus, avoiding a cataclysmic crash and burn. But, make no mistake, the economy is coming down to a lower level, as one economist called it: a lower speed limit (think under 2% and lower growth rate vs. the 3% of the last 15 years). And, even if we are reaching a “bottom” to this recession, which many economists believe we are, we have, and will continue to, take capacity out of the economy,

... as the last “straw” of sub-prime mortgages, along with innovative and enormously risky financial engineering, and, finally, consumers borrowing beyond their means, all culminated in one frenzied, greedy and compulsive binge between 2002 and 2007, it was not sustainable.

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No EconomicRecoveryIT’S A RECALIBRATION

until we reach what many are calling a “new normal.” What that means in laymen’s terms, particularly for those interested in the consumer products and retail industries, is that all of the failed businesses, those reduced in sized and the curtailed new business openings, simply will not come back to the old pre-crash “normal.” The reason: in the end, it’s not about the trillions of government stimulus dollars, the banks starting to lend or big business starting to build; it’s all about the consumer (who owns 70% of the economy). And, those consumers are literally spent. Millions have lost their jobs with little hope of getting new work, and millions more are scared of unemployment. Furthermore, since

they have been spending like “drunken sailors” for the past 25 years, they’re in debt over their heads, (for three consecutive years leading up to the crash, households spent more than their entire income and post-crash, household wealth plunged 18% or $11 trillion in 2008). Their home equity is under water, and there is no credit available. So, any of those trillions of stimulus dollars that might come their way, will go into savings or to pay down debt vs. buying a new frock. Indeed, the savings rate has gone from below zero during the “bubble” to over 4% currently, and expected to reach 7-8% by end of year 2009. Add to this, and also unprecedented in this era of excess, the fact that consumers simply don’t need another

car in their driveway or another pair of pants in their closets. A consumer survey conducted by consultancy, Alix and Partners, found: Americans say their net worth will take almost 6 years before recovering to pre-recession levels.

• 61% feel the economy has yet to hit bottom

• 85% feel it won’t pick up this year.

• 67% feel it won’t recover until 2011 or later

• Only 43% see the economy ever recovering to pre-recession levels.

• Post-recession, Americans say they expect to save 14.3% of total income

• And, even when the recession ends, “new normal” spending levels will return to just 86% of pre-recession levels in the next 10 years

These are the very consumers who every consumer-facing industry, including retail, is looking to for a recovery. Well, forget it. Forget the word “recovery,” which by definition means recovering back to where we were. We are coming down to a new, yet lower and slower growing economy, that is sustainable and supported by real value, real products, real service and a reconfigured, indeed re-regulated new form of capitalism. So, do not look for a recovery per se. It truly is a re-calibration of our economy.

And, those consumers are literally spent. Millions have lost their jobs with little hope of getting new work, and millions more are scared of unemployment.

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RMH at Events

Seminars 2009: Paper or Plastic; Detecting Fraudulent Documents August 5, 2009Presented by: BRIAN ISHIKAWA, CPP, CFSSP, Senior Vice President, Director of Corporate Security, Bank of Hawaii

RMH - Major Events & Meetings Schedule


Board of Directors: Wednesday, October 28Kewalo Conference Room, Ward Warehouse – 8:00 am

Executive CommitteeOctober 08, November 12RMH Office – 8:00 am

Communications Committee November 06RMH Office – 3:00 pm

Education CommitteeSeptember 18; October 16; November 20; December 18RMH office – 9:00 am

Government Affairs CommitteeDates: TBDRMH Office – 8:00 am

Retail Tourism CommitteeOctober 2, December 4Louis Vuitton Hawaii – 8:15 am

Security CommitteeSeptember 23 – Neiman Marcus;October 21 – Macy’s; November 18 – SearsMeeting time: 11:00 am

Standing Committees

April 22, 2010 - RMH Annual Membership MeetingJune 18, 2010 - 12th Annual Retail Invitational Golf Tournament

October 15, 2009 - Annual Conference & Ho’okela AwardsJanuary 14, 2010 - Annual Evening with Legislators & Government Officials

RETAIL MERCHANTS OF HAWAII - EXECUTIVE COMMITTEE

Al Tomonari, Neiman Marcus, Chair of the Board; Phil Fong, Jeans Warehouse, Chair-Elect; Ginger Waters, Honolulu Cookie Company, Vice Chair; Dale Ruff, Immediate Past Chair; Riki Morimoto, ABC Stores, Treasurer/Secretary; Carol Ai May, City Mill Company, Ltd.;

Diane Bruce, GGP – Ward Centers; Dave Erdman, PacRim Marketing Group; Sharon Serene, Sharon Serene Creative

A&B Properties - Maui MallABC StoresAccuity LLCADM Retail Planning & ArchitectureAla Moana CenterAmerican ExpressAmerican Savings BankAmwayAnteprimaAunty Lilikoi ProductsBaccaratBallyBank of HawaiiBaron & LeedsBead It!Best BuyBig Island Candies, Inc.Blue Hawaii Surf LLCBluefol Hawaii, Inc.BurberryCartierCastle & Cooke Properties, Inc.Celine Hawaii, Inc.Central Pacific BankChrome HeartsCinnamon GirlCity Mill Company, Ltd.Colliers Monroe & Friedlander, Inc.Consumer Service AnalysisCrackseed Center Ala Moana,

Crazy ShirtsCreations UnlimitedDatanet Systems, Inc. dba ComputantDFS HawaiiFlora-Dec Sales, Inc.Freitas & Saito, CPAs, LLPGGP – Prince Kuhio PlazaGGP-Whalers VillageGlobal VillageGMR LLCGoodwill Industries of HawaiiGrubb & Ellis / CBI Inc.GucciHana Hou!Hawaii Coffee CompanyHawaii Malls, Inc.,Hawaii National BankHawaii Visitors & Convention BureauHermesHilton Hawaiian VillageHMAAHyatt Regency WaikikiHonolulu Cookie CompanyIn+Form Design, Inc.James Tucker Associates, Inc.JCB International Credit Card Co., Ltd.Jeans Warehouse, Inc.Kahala MallKamakani Enterprises, Inc. dba TikiMaster.comKaneohe Ranch Management LLC

Ko Olina Golf Club,Kramer’sKHNL / KFVE TVKTA Super StoresLahaina Cannery MallLanai Fine Art, dba Mike Carroll GalleryLanikai Bath and BodyLongs CVS / CaremarkLouis Vuitton HawaiiMacy’sManuheali’i Inc.Maui Divers of Hawaii, Ltd.N&K CPAs, Inc.Nake’u Awai DesignsNashimoto & AssociatesNeiman MarcusNordstromOutrigger EnterprisesPacific Aviation Museum Pearl HarborPacific Harley DavidsonPacific Basin CommunicationsPacRim Marketing Group, Inc.Parker Ranch StorePearlridge CenterP. F. Chang’sRabbitt in Paradise, LLCRainbowtiqueRegency Marketing Corp.Retail Concepts InternationalRetail Strategies, Inc.

Reyn’sSharon Serene CreativeSears Holding CorporationSecuritas HawaiiSeven-Eleven HawaiiSofos Realty CorporationStep Three, Ltd. dba Sandal TreeSteve & Lauren ModerThe Festival Company Royal Hawaiian CenterThe Honolulu AdvertiserThe Pepsi Bottling GroupThe Retail Equation, Inc.Tiffany & Co.Tori Richard, Ltd., dba TR Retail LLCTown & Country SurfTrendtex Fabrics, Ltd. Waikiki Beach ActivitiesWaikele Premium OutletsWaikiki Beach Marriott Resort & SpaWaikiki Trader Corp.Ward Centers

New MembersBen Franklin CraftsIntegrated Security Technologies, Inc.Inkinen & Associates, Inc.Jenness Consulting ServicesKoko Marina CenterKualoa Ranch Hawaii Walgreen Co.

RETAIL MERCHANTS OF HAWAI‘I - BOARD OF DIRECTORSChair of the Board: Al Tomonari, Neiman MarcusTreasurer/Secretary: Riki Morimoto, ABC Stores

Brendan Barry, Bead It!; Diane Bruce, GGP Ward Centers; Elise Burkart, City Mill Company, Ltd.; Aaron Chan, Hawaiian Moon; Lance Duyao, Big Island Candies; Dave Erdman, PacRim Marketing Group; Phil Fong, Jeans Warehouse; Reid Fujita, Cinnamon Girl; Gayle Yamada, Tiffany & Co; Melvin Harada, Bank of Hawaii; Glenn Hirata, Town & Country Surf; Mark Hollander, Crazy Shirts; Bob Ingersoll, Longs Drugs CVS/Caremark; Mike Jenness, Jenness Consulting Services; Kelly Kauinana, Kahala Mall; Brian Kawabe, American Express; Dave Kennedy, Honolulu Star-Bulletin / MidWeek; Kristin Kilburn, Ala Moana Center; Jeffrey Kramer, Kramer’s; Gabe Lee, American Savings Bank; Conchita Malaqui, Outrigger Enterprises; Louis Meunier, Macy’s; Susan Ogata, Ko Olina Golf Club; Fred Paine, Pearlridge; Joyce Okano, Chanel Boutique; Dale Ruff, Louis Vuitton Hawaii; Clint Schroeder, The Honolulu Advertiser; Jody Schucart, Manoa Studio; Sharon Serene, Sharon Serene Creative; Michael Tam, Martin & MacArthur; Brian Tatsumura, Nordstrom; Bob Taylor, Maui Divers; Susan Utsugi, Central Pacific Bank; Glenn Wachi, First Hawaiian Bank; Ginger Waters, Honolulu Cookie Company; Sharon Weiner, DFS Hawaii

Mahalo to our Renewing and NEW Members for FY 2010 (As of September 9, 2009)

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