The fall of Lehman Brothers and virtual disappearance of Merrill Lynch, along with the termination of many of their employees, will affect a number of sectors of the economy. But, as several reports have noted, the end of the good life for many bankers will hurt businesses ranging from bespoke suit manufacturers to nightclubs.
Crain’s New York spoke to a number of fearful high-end clothiers and steakhouses: Michelle Doe, manager of The Shirt Store, 51 E. 44th St., which makes custom-tailored shirts, said business is slow. And Mark Lingley, owner of Mark Christopher on West 26th Street in the Flatiron District, which specialises in custom-made shirts, suits and ties, said he’s been losing customers too, including the former chief executive of Merrill Lynch.
“One of my clients canceled today, someone who had been with me for a long time. I expect more cancellations today,” Mr. Lingley said.
Steak houses, where Wall Streeters conduct their power lunches during the best of times, are feeling Wall Street’s pain now. Ben Benson, whose eponymous eatery at 52nd Street and 7th Avenue is located in another building where Lehman has office space, said that business was down.
“We’ll miss the Lehman people who come to the restaurant and the bar,” Mr. Benson said. “I hope the building owners fill the space with carnivores and drinkers.”
Peter Glazier, co-owner of Michael Jordan’s The Steak House NYC in Grand Central Station, said he had spent the weekend watching CNBC and was worried about the future. “We’re nervous about this,” he said.
Also likely to take a hit, the luxury condo market now that bankers aren’t expected to have the same egregiously sized bonuses as they have in the past.
Crain’s: As Wall Street’s financial crisis deepened, real estate insiders on Monday predicted that Manhattan’s residential market could be dealt a severe blow.
Investment brokers and their million-dollar year-end bonuses helped sustain apartment prices in the borough over the past few years, even as the rest of the country endured double-digit price declines. However, now that Lehman Brothers Holdings Inc. is headed for liquidation and Merrill Lynch & Co. has been sold to Bank of America Corp., much of that bonus money is uncertain. Many of Lehman’s high-paid employees have already started packing up their desks, and Merrill Lynch will not retain all of its workers.
“Bonuses will be much smaller and the layoffs will continue,” said Jonathan Miller, chief executive of real estate appraisal firm Miller Samuel Inc. “The extent of this problem is mind-boggling.”
Meanwhile, Guest of a Guest wonders how much nightclubs will suffer now that bankers are less willing to pay for bottle service:
This meltdown may very well be the pin-prick that bursts the club price bubble. In the past decade, as New York has been injected with funny money, a bottle culture has permeated clubland, driving the price for a single bottle to upwards of $400. We have often loathed the homogeneous effect of this model and bottle culture.
Although new ventures like 1oak have tried to package their experience more as a type of velvet egalitarianism, the simple truth is that it is hardly that. Clubs are tied to Wall Street more than ever. And it won’t just be the big Saturday night table hits where clubs will be hurting. Most clubs earn a significant amount of revenue from sponsored parties that happen post happy hour from around 9-11pm. When 1oak opened it’s doors last December, it’s first event was one for traders from BTIG.
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