Return to Transcripts main page

American Morning

Interview of Donald Ratajczak

Aired November 23, 2001 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: And many are worried that the slow economy may make this a sluggish shopping season. Perhaps, can this holiday sales season give significant help? Well we'll find out next few hours or days to come. Turning to economist Donald Ratajczak, who is the CEO of venture capital consulting firm BrainWorks. He joins us here in the studio. Good to see you.

DONALD RATAJCZAK, CEO, BRAINWORKS: Thank you.

HARRIS: I think last I talked to you here you were still with Georgia State University; right? A while ago?

RATAJCHAK: A while ago.

HARRIS: Well, tell us, how do things look to you?

RATAJCHAK: Well, there's no question this is challenging. We're in a recession, we may even officially be declared a recession sometime this week, or next week, and a lot of people are worried about their jobs. They're also worried about the world events. Worried people are less likely to make decisions, so that is the great concern. On the other hand, the good news is consumers have money, energy prices been coming down, the ability to refinance homes has been strong, so actually the capacity to spend is there, the will to spend is where we are having trouble.

HARRIS: Okay. So, on balance, then, is this picture half full, half empty?

RATAJCHAK: Well, it's half empty, but we're hoping we can pump it up. One thing we know is there's not a lot of inventory in the retailer. So, they knew that there were going to be struggles here. They only put about 2% more inventory in. And if people want something hot it's going to go pretty quick.

HARRIS: Yeah, we talked to someone with the retailers association just an hour -- last hour. Talked about that, they mentioned the inventories, so what we're looking for in the short term here --

RATAJCHAK: Well, my hope is that we gradually pick up for Christmas, of course I'm looking at every indicator right now, driving in here I asked how crowded were parking lots the shopping malls. And they are down from last year. They're not picking up yet, but it's early in the day. So we'll be watching everything to see how the demand picks up. After all, last year, which was an okay Christmas, but they -- we prepared for a big Christmas, and we didn't sell out the inventory, and that's where our weakness started, because we had to get rid of inventory.

HARRIS: Well, how big a Christmas do we have to have to pull the economy through?

RATAJCHAK: Well, all we need a Christmas as big as they prepared for. Now, they have not prepared for a big Christmas. We're not going to have a big Christmas.

HARRIS: So you're saying it won't take much, then?

RATAJCHAK: It won't take a lot. But, we certainly need some growth. Maybe 2, 3%. That kind of a number, and we'll be ready to start to repair things. If we fall negative, I'm afraid we're going to have to clear out some extra inventory in the first and second quarters.

HARRIS: So what do you think picture looks like at the end of Winter then in Spring?

RATAJCHAK: Well, I'm still hopeful. I'm positive. I -- I do believe that the economic indicators are favorable enough, the psychological indicators are still negative, that's what we have to turn around, the feeling that people have. They have to catch the Christmas spirit a little bit, and think about giving to other people and enjoying their families. That hasn't happened yet, but we're hoping, as we build up to Christmas, and we do have an extra day, this year, so we have one more day to work on people, that as we build up the Christmas, perhaps we'll get that.

HARRIS: That's all my wife needs, one more day. One more day of shopping. Okay, good deal. Donald Ratajchak, thanks much. Good to see you, happy holidays to you.

RATAJCHAK: Same to you.

HARRIS: All right, take care.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com