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Few are immune from volatility

Plunging prices and stomach-churning volatility in the stock market have an immediate impact on Wall Street, but the ripples can be felt across the country. In a regional sampling by the Times on Thursday, here's how some Tampa Bay businesses say they are responding to the recent swings in the stock market and the potential impact on the area's economy.

By Times staff
Published August 17, 2007

Utilities: Unplugging growth

The downturn in the housing market has slowed growth in Tampa's TECO Energy. Now the volatile stock market threatens to delay the sale of TECO Transport, the utility's river, gulf and ocean transportation business. "It's up in the air with TECO Transport," said Sherrill Hudson, TECO chairman and CEO. The sale of TECO Transport would boost TECO's ability to repay debt, a crucial step in restoring the company's stock to investment grade, Hudson said.

Auto loans: Portfolios draw interest

With market volatility troubling lenders, Nicholas Financial sees an opportunity. The Clearwater finance company, which specializes in car loans to buyers with subprime credit, is eyeing distress sales of loan portfolios. "There's always opportunity when there's distress and carnage," said chief financial officer Ralph Finkenbrink. "You've just got to figure out where it is. It hasn't happened yet, but we expect there will be availability from companies exiting the business or just putting portfolios up for sale."

Retail: Buttoned-down approach

Steve Knopik, chief executive of Beall's Inc., which owns more than 600 department and apparel outlet stores, sees the market volatility as a sign the economy is worsening. The Bradenton retailer is more cautious about building its holiday inventory. "You've got to believe our Florida customers who live on investments or fixed incomes are spooked by the stock market gyrations and the ripples from the housing credit crunch," he said. "So we're getting into a position to hunker down if need be."

Restaurant/hotels: No waiting

Stock market jitters, like any bad news that erodes consumer confidence, is trouble for the hotel and restaurant business, says Anthony Satterfield, general manager of the Alden Beach Resort in St. Pete Beach. "If consumers aren't feeling good about their investments or their jobs, it affects us," he says. "They take a shorter vacation or won't eat out as much." After two years of double-digit percent rate increases, the hotel is freezing rates for 2008. Hotel occupancy declined for nine of the past 12 months.

Auto dealers: Plenty of drive

Jim Myers, chief operating officer of Crown Auto Dealerships in St. Petersburg, said a short-term correction wouldn't affect his business. "In the past, (buyers) get tentative if it's a long-term drop," he said, "but most people are looking at this as short term. We're having a record Mercedes-Benz month, so a lot of factors affect buying - factory incentives, interest rates. I think only a small percentage of the buying public is affected initially."

Real estate: It's all connected

"It doesn't have a huge effect on us," said Ron Wheeler, chief operating officer of the Sembler Co. "The stock market falling is a symptom of the problems in the subprime market and lender problems like Countrywide's had. But other issues, the flux in interest rates and availability of capital, could manifest itself in real estate in general. I'm more concerned about what caused the problem. The market doesn't like the unknown, and until the Fed makes its next decision on interest rates, it's going to react skittishly," Wheeler said. "It's not going to cause us to change strategy. But obviously, the economy, lending market and the stock market - all of that is intertwined and could affect business in the future."

Financial: Calm reassurance

Raymond James Financial doesn't have any exposure to the subprime mortgages that have caused problems for other financial companies. However, the St. Petersburg company said its investment banking activities may be curtailed while companies wait for stock market conditions to improve before going public. Investor clients have been getting reassurance from Raymond James financial advisers like Greg Ghodsi in Tampa. "I normally send something out every 10 days, but I've been doing it every three or four days for the past six weeks," he said. Ghodsi said his clients are holding 10 to 20 percent cash, but he wants to see signs the market is turning up before putting it to work.

Technology: Changing faces

Despite the stock market's downturn, the customer list continues to expand at Tampa's Bayshore Technologies, which services companies' computer networks. The only change: the types of companies that are signing on as clients. Compared to two years ago, Bayshore is getting less business from housing and real estate companies, and more from medical companies, said CEO Peter Anderson. "We're a horizontal market," he said, explaining Bayshore's resilience. "All companies buy computers and need computer assistance. We had projects get signed off yesterday."

Recreation: Dipping of toes

"People are still buying, there just aren't as many of them," said Rick Bicknell, an operations manager for Recreational Warehouse. He said the 33-store Orlando-based chain advertised deals for pools two weeks longer than usual in an attempt to lengthen the summer season.

Compiled by Times staff writers Mark Albright, Steve Huettel, Helen Huntley, Asjylyn Loder, Christina Rexrode and Tom Zucco.

[Last modified August 17, 2007, 12:18:16]