Today’s retailers are confronting issues they have never had to face in the past, according to a panel of West Coast executives who have been active in retail development since the 1960s.

Titled "Living Legends — I Wish I Knew Then What I Know Now," the panel discussion included Art Coppola, president and CEO of The Macerich Co.; Dan Donahue, former ICSC chairman and current chairman of Donahue Schriber; and Michael Epsteen, president of Southern California brokerage house Epsteen & Associates. The quartet chatted about issues ranging from Wall Street scrutiny to stagnant entrepreneurial spirit at ICSC’s 2002 Western Division Conference in Palm Springs, Calif. on Wednesday.

"Poor retailers," said Coppola. "If they report a bad month, their stock will shoot straight to the bottom. Many of them are cutting back expansion plans because of the beating they’re taking from Wall Street analysts." Coppola pointed to The Gap as one chain that has been particularly damaged by harsh analyst commentary in recent months.

"The flow of information is so fast nowadays, the whole world knows when a retailer has had a bad month," Donahue agreed, suggesting retailer’s reputations are unduly damaged by analyst and media speculation before the retailers themselves have the chance to address their lagging sales figures. "The Gap is going to be fine in the long run," Coppola predicted.

The panel also pegged Wal-Mart, which continues to dominate merchandise segments ranging from groceries to toys, as the greatest threat to all retailers today. "We’re not seeing the new tenants come in like we used to. Is it the fault of Wal-Mart taking vitality away from the entrepreneurs?" Donahue pondered.

The panelists agreed there seems to be scant entrepreneurial spirit left for Wal-Mart to squash. "We’re in a bad place for incubation of new businesses," Epsteen said. "In the 1980s, new concepts were coming up all over the place."

Epsteen said retailers have been imitating proven concepts such as The Gap rather than creating their own formulas. "Nowadays, fresh new concepts are rare. We’re getting bored with the same old concepts. Sameness is a terrible disease. The people behind the eight ball are doing what the guy in front of the eight ball is doing instead of coming up with great new ideas."

The root of Kmart’s current turmoil lies in stale leadership and a lack of new ideas, Epsteen said. "The Kmart problem existed at the executive level. There were too many old farts who were scared of getting fired and took no risks. You have to hire youth and listen to them — they’re going to tell you what the next trends will be."

But the discussion was not all gloom and doom. The panel did offer words of comfort to real estate developers — If you have a good piece of property, it doesn’t matter who your tenants are or how they are performing. In the long run, well-located real estate itself will be immune to depreciation. "It’s the real estate you’re buying, not the tenant," Epsteen said.

"Look at Macerich’s Lakewood Mall," Coppola said. "We’ve had several department stores and specialty stores come and go at that center through the years, but because of its location, it remains successful. If you’re continually reinvesting in a center you can’t go wrong."

The panel agreed the longevity of real estate, particularly retail real estate, has attracted more interest than ever, with $11 billion in transactions completed this year. The current advantage is toward individual investors or private family trusts that can afford to scoop up a property and sit on it until values peak. "More wealthy individuals are bidding to buy malls," Coppola said. "They’re moving their money from dot.com initiatives to hard, real assets."

On a final note, the panelists bemoaned the corrupt corporate leadership that spawned the recent spate of scandals across so many business segments. But these "living legends" feel confident the real estate community will remain free of the disgrace that rocked Enron and WorldCom. "The corporate blow-ups of the 1980s and 1990s ensured that real estate companies scrubbed their boards of directors so clean that there is little threat of corruption at the highest levels now," Epsteen said.

Coppola agreed, adding that real estate transactions are by nature transparent and difficult to manipulate. "You can see our transactions," he said. "They’re not like Enron’s energy contracts. They’re leases, they’re parking lots that have been swept clean."