Anyone watching Bloomberg today saw the same story discussed half a dozen times - that we're not even close to the end of job cuts on Wall Street. I analyzed the relationship between men's clothing sales and Wall Street employment, and the trend into '09 is frightening. Consider the following...

1) Numbers for job losses being thrown around are now in the 150-175k range. We can look at Wall Street-related jobs in NYC (I'm not being geo-centric, it's the only data we could find) and see that the recent peak was in 3Q07 at 134k jobs. Now we're down to 122k. If I assume that 150k jobs are lost, and that 30% of these are in NYC, we're looking at 50k jobs lost from peak to trough. Unfortunately, that still suggests that we need to issue another 30-35k pink slips.

2) I did this analysis not to be a downer for those of living in the new York area, but to show the relationship between Wall Street employment and menswear sales. The chart below is one of those 'it speaks for itself' charts. Bottom line = if these job cut forecasts are correct, then we could see another 300-400bp deceleration in menswear sales.

3) Taking a historical perspective, the biggest Financial Employment hit NYC has ever seen was circa 9/11 - which should not come as a surprise to anyone. But even then, we saw a 40k hit to jobs. At that point in time we saw menswear sales go negative - but only for a short time period. My strong view is that this was the heart of the period where sourcing tailwinds and deflationary input costs gave the industry solid fuel to stimulate unit demand. That factor is gone now big time.

4) This is yet another factor that keeps me on the sidelines with PHV, as nearly half of cash flow is men's dress shirts and accessories. It makes me pause and reflect on RL as well - though I think RL has enough juice in its tank to harvest recent investments that it will offset an ugly cyclical trend.