It appears the panic has already set in.  The difference is that this time around most retailers and manufacturers built the 30% off into their pricing strategy.  However, if this is what’s going on on November 15th, imagine what after Christmas is going to look like.

I have recently received 30-40% off offers on everything from Brooks Brothers, Ralph Lauren, JCrew, Cole Haan, Coach, and Banana Republic.  These aren’t exactly the lightweights of the industry.  Word is that Nike, The North Face, and a host of other vendors are already dumping excess Christmas inventory in China.  It’s not like the factories are going to let them out of their orders, and the goods have to go somewhere.

For the vendors that own their own stores, the excess inventory is going to cause a real threat to their cash flow as we head into Q1.  In the past, their factory orders were placed on the seasonal orders from their accounts: The goods came in, got shipped, and the invoices went to the factor for immediate payment.  It was quite a risk free boon to both profit and cash flow; but now many of the vendors own their own inventory for their online and brick and mortar stores, and it is a whole new game.  Both profit and cash flow will be challenged.  Then, as these vendors offer deep discounts direct to the retail customer [in order to move their rotting in-house inventories], they will further compromise the core accounts that provide them with the base of their profitability.  The risks are overwhelming, and several major brands won’t make it through another downturn.

On the other hand, retailers that are their own brand: GAP, Zara, JCrew, etc. should be in a better position to compete with the online and big box nemeses that plague our industry. They will not be compromised by the online onslaught led by Amazon, nor will they be undermined by the Groupon’s of the world.

For a retailer like TW&Co, a downturn works to our advantage.  The supply pipeline starts to back up and hemorrhage, and we not only have a better choice of product, but premium vendors are more anxious to sell us.

One of my best friends in high school was Joe Macmanus.  We stayed friends through college [even though he was a Golden Domer], but after I got married and he went into foreign service for the United States, we lost touch.

I still remember Joe calling and asking me to meet him for breakfast – he had something he wanted to tell me.  We met at HoJo’s across from his parents’ apartment at The Westbrook on Delaware Ave.  As usual, Joe’s nose was sweating.  It was a peculiar physical quirk of his amongst many intellectual eccentricities.  With most of my friends, I could have narrowed down the possibilities to a couple of scenarios, but with Joe, I had not a clue.  When he told me he was joining the CIA and embarking on a life of government service, I had no idea he would end up running the State Department 30 years later.

About 4 years ago, I looked Joe up and called him at his home in Arlington, Va.  The first thing he said to me was, “How did you get this number?”  Yah, I missed him too.  He was just preparing to leave for a diplomatic mission overseas, so I didn’t get much more than the rudimentary catch-up.  Regardless, he was still Joseph Estey; and watching his swearing-in ceremony on the link below only confirms that he is still the same guy, just more-so.

When Joe got married, he sent me a very thoughtful note explaining to me that Carol and he were only inviting one guest each [and that if they were to have two, he would certainly have included me], but, as it was, I was not invited.  It was the most eloquent dismissal I’ve ever received – but that’s Joe.

Joe was never political, so it comes as no surprise that he maintained his seamless rise at the State Department through the messy transition from the Bush to the Obama administration.  I was Joe’s campaign manager for Student Council President in high school, and he was the most reluctant candidate ever.  He thought my back-room machinations were comical and mostly ignored the campaign as he prepped for his role in the Pirates of Penzance.  I told him not to worry, that since he would be in full costume and make-up during the play, we could always muster a plausible denial.

Joe had a great family.  I remember taking his twin sister, Mary, to see Judy Collins.  His older brother, Chris, was ahead of us at Canisius, and the three of them made quite the team.  My favorite, however, was Joe’s mom.  She kept little beer splits in the fridge – and a wry comment at the ready.

Looking back to over 40 years ago is more of a challenge than I expected when I started writing this.  I’m not going to do a fact check, so take it all in as simply a fond remembrance of a great time with a great friend.

Today, Joe is an Ambassador for the United States in Vienna, and he will be working hard to encourage the non-proliferation of nuclear armaments that vex our very existence on planet earth; while I am working hard to encourage the proliferation of women’s fashion in WNY.  We all have our calling.

http://video.state.gov/en/top-stories/video/1959010569001/swearing-in-ceremony-for-joe-macmanus/s~creationDate/p~1/?p

Joseph E. Macmanus, United States Representative to the Vienna Office of the United Nations, with the rank of Ambassador and United States Representative to the International Atomic Energy Agency, with the rank of Ambassador.

Joseph E. Macmanus is a career member of the Senior Foreign Service and recently served as the Principal Deputy Assistant Secretary of State for Legislative Affairs.  Previously, he served as the Executive Assistant to Secretary of State Hillary Rodham Clinton and Secretary of State Condoleezza Rice.  From 2005 to 2008, Mr. Macmanus was Deputy Assistant Secretary for Legislative Affairs.  Previous Department of State assignments in Washington include: Office Director for Global Affairs and Office Director for Regional Affairs in the Bureau of Legislative Affairs.

Mr. Macmanus began his Foreign Service career in 1986 at the United States Information Agency, where he served as Executive Assistant to the Director and Deputy Director, and as the Russia Desk Officer.  Overseas posts have included: Counselor for Public Affairs in Brussels, Belgium; Public Affairs Officer in Krakow, Poland, Press Attaché/ Information Officer in San Salvador, El Salvador; and Junior Officer in Mexico.  Mr. Macmanus holds a B.A. from the University of Notre Dame and an M.L.S. from State University at Buffalo.

Giancarlo’s serves multiple crowds in unique storefront.

http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20121109/GUSTO/121109257/1031

I read Andrew Galarneau’s review of Giancarlo’s this morning in the Gusto section of the News.  Of course, it’s hard to not go down memory lane when reading anything in the Gusto.  We certainly spent enough time in there over the first 30 years of the Advantage Co.

I read the article once, quickly.  I wanted to get the feeling that the regular reader of the News would get.  Pouring over ever line and nuance would only serve to disturb my initial impression.  All in all, it sounded positive.  Andrew certainly pointed out a couple of the problems that we are working on already.  The two that I think he pointed out rather gently are the lack of seating room up front and the confusion over the exclusion from the dining room in back.

As Andrew pointed out, Giancarlo’s is many things.  However, what Giancarlo’s is meant to be was not realized by Andrew, and that is disturbing.  Suffice it to say that we have not done a good job of marketing our concept.  If you see Giancarlo’s as a dinner restaurant, you will not only be misled, but you will be disappointed as well.

While Anthony was learning to be a chef in Florence, he had the idea to create a fine dining experience for events, parties, banquets, and all types of professional occasions.  He recognized that most banquet facilities were either the red-headed stepchild of a restaurant or a kitchen attached to a big hall.  Giancarlo’s is the manifestation of his vision – and it is a work in progress.

The Cafe’ and Corporate Catering are both Gabriela’s take on the culinary experience, and she is doing a remarkable job.

The Vantaggio Room is a collaborative effort that was first experimented with at the old Stereo Advantage [which will soon be Carl Paladino’s new hotel].  Several years ago, we built a state-of-the-art conference room and hosted breakfast, lunch, and dinner for various clients and associates.  It was a resounding success, and we decided to incorporate that into the Giancarlo’s experience.

Anthony and Gabriela are enjoying the entire experience of building this new concept from scratch.  They are fortunate to have Pat Powers building with them.  I am encouraged and delighted by what they have accomplished in one short year.  As I told them from the outset: what WNY didn’t need was another Italian Restaurant or Pizza Shop.  They certainly took my advice to heart.

So, at its core, Giancarlo’s is a private dining experience for events and social occasions.  With our state-of-the-art Vantaggio Room, we also specialize in private business meetings.  And with our Corporate Catering service, we are able to provide our professional customers with the culinary elegance and effectiveness they rely on for a successful event [even if that event is merely lunch].

Additionally, Giancarlo’s provides a take-out service for our entire menu, especially our pizzas.  The cafe and bar are meant to be the introduction to the Giancarlo’s experience.  While our outdoor patio service enriches WNY’s summers.

As for the crunch up front, we will resolve that with our expansion that will begin the first of the year.  I included a first draft of the sketch for our possible new layout in a previous posting.  It certainly has us all excited.  Anthony and Pat are finishing up the new kitchen layout this week.

Now it’s time to read over Andrew’s review again and start parsing out every line.

As everyone who knows me realizes, I am not political.  And while I am not an anarchist, I am not enamored with the political process, politicians, and their enablers.  I still look to President Eisenhower’s Farewell Address to the Nation [which I have included below] for our last bit of reasonable oratory.  It is my favorite political speech of all time [although, for impact, I have to give Winston Churchill his due for summoning the courage of England in WWII in the face of the overwhelming and seemingly invincible Nazi onslaught].

Eisenhower’s reflective moment certainly trumps the pablum Kennedy’s Harvard boys fostered on us in his oft-recited inaugural address that shortly followed: “Ask not what your country can do for you, ask what your country can do for the Kennedy family and their rabid supporters.”   From there it has been a series of fools and their folly.  Whether it was Nixon as Pepsi’s lackey in the Soviet Union or Carter as Coke’s promoter in China, it has been an ongoing rush to satisfy the supporters who bought and paid for their candidates.

Nevertheless, the change in the political climate often heralds the re-setting of the shell game that passes as our tax law.  While it’s a pain in the ass for just about everyone, it is a boon for tax-accountants.  Actually, before I started the Stereo Advantage, my ambition was to be a tax consultant [now I just rely on Charlie Chiampou].  Year’s later I dabbled with Transfer Pricing.  I even tried to launch a business with it as I taught my one and only class in the MBA Program at UB.  I still think it is the most interesting aspect of the tax conundrum [in that it is always contentious].  Since one country is going to get screwed, there never is a correct and satisfying answer to how much tax is to be levied.  But I digress…

This year I have three tax issues on my mind:

1. The Capital Gains Tax.  At the end of the year, the 15% long term rate will revert to 20%, and Obama’s Health Care surtax of 3.8% will be added to the rate.  Along with some other adjustments, the effective long-term capital gains tax might actually leap to 25%.  So, make certain you sell some those long-term assets that you want to get rid of before the end of the year.
2. The Gift Tax.  Due to expire at the end of this year is the one-time $5.12M transfer of assets to descendants tax-free.  Other than this exception, you are only allowed to transfer $13k annually to your descendants tax-free.  It might be a good time to transfer your house to your kids tax free before the end of the year.
3. The 529 Plan.  You can have a total of $250k to $350k per beneficiary in most 529 estate-planning plans.  Also, you can have several beneficiaries, including grandchildren, and you can retain control of the money.  If you haven’t started a 529 plan, you should.  Every little bit counts toward the future.

As promised, President Eisenhower’s Farewell Address on January 17, 1961:

My fellow Americans:

Three days from now, after half a century in the service of our country, I shall lay down the responsibilities of office as, in traditional and solemn ceremony, the authority of the Presidency is vested in my successor.

This evening I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you, my countrymen.

Like every other citizen, I wish the new President, and all who will labor with him, Godspeed. I pray that the coming years will be blessed with peace and prosperity for all.

Our people expect their President and the Congress to find essential agreement on issues of great moment, the wise resolution of which will better shape the future of the Nation.

My own relations with the Congress, which began on a remote and tenuous basis when, long ago, a member of the Senate appointed me to West Point, have since ranged to the intimate during the war and immediate post-war period, and, finally, to the mutually interdependent during these past eight years.

In this final relationship, the Congress and the Administration have, on most vital issues, cooperated well, to serve the national good rather than mere partisanship, and so have assured that the business of the Nation should go forward. So, my official relationship with the Congress ends in a feeling, on my part, of gratitude that we have been able to do so much together.

II

We now stand ten years past the midpoint of a century that has witnessed four major wars among great nations. Three of these involved our own country. Despite these holocausts America is today the strongest, the most influential and most productive nation in the world. Understandably proud of this pre-eminence, we yet realize that America’s leadership and prestige depend, not merely upon our unmatched material progress, riches and military strength, but on how we use our power in the interests of world peace and human betterment.

Throughout America’s adventure in free government, our basic purposes have been to keep the peace; to foster progress in human achievement, and to enhance liberty, dignity and integrity among people and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance, or our lack of comprehension or readiness to sacrifice would inflict upon us grievous hurt both at home and abroad.

Progress toward these noble goals is persistently threatened by the conflict now engulfing the world. It commands our whole attention, absorbs our very beings. We face a hostile ideology — global in scope, atheistic in character, ruthless in purpose, and insidious in method. Unhappily the danger it poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle — with liberty the stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defense; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research — these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

But each proposal must be weighed in the light of a broader consideration: The need to maintain balance in and among national programs — balance between the private and the public economy, balance between cost and hoped for advantage — balance between the clearly necessary and the comfortably desirable; balance between our essential requirements as a nation and the duties imposed by the nation upon the individual; balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress; lack of it eventually finds imbalance and frustration.

The record of many decades stands as proof that our people and their government have, in the main, understood these truths and have responded to them well, in the face of stress and threat. But threats, new in kind or degree, constantly arise. I mention two only.

A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction.

Our military organization today bears little resemblance to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.

Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United States corporations.

This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every State house, every office of the Federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades.

In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers.

The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present — and is gravely to be regarded.

Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system — ever aiming toward the supreme goals of our free society.

Another factor in maintaining balance involves the element of time. As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering, for our ease and convenience, the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

Down the long lane of the history yet to be written America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect.

Such a confederation must be one of equals. The weakest must come to the conference table with the same confidence as do we, protected as we are by our moral, economic, and military strength. That table, though scarred by many past frustrations, cannot be abandoned for the certain agony of the battlefield.

Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose. Because this need is so sharp and apparent I confess that I lay down my official responsibilities in this field with a definite sense of disappointment. As one who has witnessed the horror and the lingering sadness of war — as one who knows that another war could utterly destroy this civilization which has been so slowly and painfully built over thousands of years — I wish I could say tonight that a lasting peace is in sight.

Happily, I can say that war has been avoided. Steady progress toward our ultimate goal has been made. But, so much remains to be done. As a private citizen, I shall never cease to do what little I can to help the world advance along that road.

So — in my last good night to you as your President — I thank you for the many opportunities you have given me for public service in war and peace. I trust that in that service you find some things worthy; as for the rest of it, I know you will find ways to improve performance in the future.

You and I — my fellow citizens — need to be strong in our faith that all nations, under God, will reach the goal of peace with justice. May we be ever unswerving in devotion to principle, confident but humble with power, diligent in pursuit of the Nation’s great goals.

To all the peoples of the world, I once more give expression to America’s prayerful and continuing aspiration:

We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its spiritual blessings; that those who have freedom will understand, also, its heavy responsibilities; that all who are insensitive to the needs of others will learn charity; that the scourges of poverty, disease and ignorance will be made to disappear from the earth, and that, in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.