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Valentine's fails to jump-start loveless economy
Business of Life Heal
People walk past a display of Valentine's Day teddy bears at a Wal-Mart at Steelyard Commons, Thursday, Feb. 5, 2009, in Cleveland. Given the disappearance of more than 2 million jobs and many trillions in investments in recent months, many of the commercial trappings of romance may be in for a downsizing. - photo by Associated Press
    Even in this loveless economy, chocolate and a candlelit dinner have a date for Valentine's Day. Diamonds and special-delivery flowers, though, are on the outs.
    Lovers have their pick of promotions from restaurants and travel companies sensing an opportunity with Valentine's Day falling on a Saturday this year. But that same calendar quirk may be making losers out of florists, since sweethearts won't be ordering bouquets to the office.
    Given the disappearance of more than 2 million jobs and many trillions in investments in recent months, many of the commercial trappings of romance may be in for a downsizing.
    "A lot of people used to make Valentine's Day a very big event. They'd buy frivolous gifts, a diamond necklace, there was even advertising for BMWs," said Marcia Mogelonsky, an analyst for Chicago-based research firm Mintel International Group Ltd.
    The growing trend toward frugality brings a clear break from that view of Valentine's Day, and it's likely to continue, says Standard & Poor's retail analyst Marie Driscoll.
    "We think it will get worse before getting better," Driscoll said. "People might just get chocolates this year."
    Research firm IBISWorld Inc. predicts spending for Valentine's Day this year will fall to $28.6 billion, 4.8 percent below last year. The firm expects couples will choose chocolates or greeting cards instead of pricier gifts, such as jewelry and expensive dinners.
    Consider Tyler Trettin. The recent college graduate — who was in downtown Harrisburg, Pa., this month to inquire about a job as a personal trainer — is considering a low-key dinner and movie with his girlfriend to celebrate both his birthday on Friday and Valentine's Day.
    The recession has made even decent part-time work, such as package delivery, scarce, he said.
    "I think it's definitely on everybody's mind, especially for my situation," said Trettin, who is about to turn 25. "It's tougher to find jobs right now."
    Restaurants and hotels hurting from months of sluggish sales are ramping up promotions and discounts to woo Valentine's spenders.
    The Ruth's Chris Steak House chain is offering a three-course meal it's calling "Ruth's Classics" for about $40 — far below its average $75 guest check and the $150 special for two it rolled out last year at Valentine's Day. Chief Executive Michael O'Donnell told investors last month that Ruth's Chris is lowering its prices because fewer people are celebrating special occasions at the suffering chain.
    Many hotels wouldn't bother offering an overnight package if Valentine's Day fell on a weekday, when it creates little or no bump in occupancy. But a weekend Valentine's Day could bring in an additional $250 million in room revenue to U.S. hotels, said Mark Lomanno, president of Smith Travel Research.
    Cutbacks in travel spending have helped push rates lower this year. Three- and four-star hotels in New York, Miami, San Francisco and Los Angeles are charging 15 percent to 20 percent less than last year on Valentine's Day weekend, according to Hotwire, an online travel agency that specializes in discounted rooms.
    A three-star hotel in New York's trendy SoHo neighborhood is asking $96 for a room and a three-star in Miami's South Beach is asking $136. But at the Rosewood Hotels & Resorts luxury hotel management firm — which is offering a two-night Valentine's deal for $799 and up at some properties that includes a Ralph Lauren fragrance and monogrammed cashmere throw — business is strong, according to Chief Operating Officer Bob Boulogne.
   "At the very high end of the market, there are people spending," Boulogne said.
   More typical are florists offering discounts or deals on shipping to avert a wipeout because the holiday falls on a Saturday.
   Owner Mark Pinn at Katrina Parris Flowers in Manhattan expects business to drop 15 percent this year, partly because of the economy and partly because couples will make weekend plans rather than sending flowers to the office.
   "Most guys will make dinner plans and other arrangements," said Pinn, who founded the store with his wife in 2002.
   Jewelers, still stumbling from the dismal holiday season, don't expect business to pick up, despite their price cuts and move toward more-affordable offerings.
   Tiffany & Co. cut prices on diamond engagement rings 10 percent to stem the tide of customers gravitating to cheaper rings and even postponing engagements. People are waiting until they can get credit more easily to buy a more expensive ring or can shop without worrying whether they'll still have the income to pay for their purchases, analysts say.
   Ara, the one-named designer and CEO of jeweler Versani, said things look "bleak," even after his company, which has stores in Manhattan and Miami, shifted its focus from items priced in the thousands of dollars and boosted offerings priced in the hundreds.
"We found that it helped a little bit, but it did not make the big difference we expected," Ara said.
    Chocolatiers and candymakers are bracing for shoppers to spend less, but still to spend.
   Fewer people may buy the $75 Aphrodisiac Red Fire Hatbox from Vosges Haut-Chocolat, said Katrina Markoff, founder of the Chicago-based company. But she predicted more will buy the $42 box of 16 Gatsby truffles — chocolate swirled with champagne and topped with a rose petal.
   The Seattle Chocolate Co. is targeting couples who opt for a moneysaving night of dinner and a movie at home with "Date Night": two chocolate bars and two romantic independent movies on DVD for $27.
   "That was our little recession idea," said Chief Executive Jean Thompson. "What we're saying is, 'It's better than what you can get at the movie theater eating Junior Mints, and it's less expensive.'"


AP Business Writers Kristen A. Lee and Lauren Shepherd contributed to this report.
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