Sun Capital senses US retail slowdown

By Ros Krasny

NEW YORK (Reuters) - Some U.S. retailers have seen a slowdown in sales recently that could be a response to higher interest rates and a slowing housing market, a top private equity investor said on Tuesday.

"It's been so sudden that it could just be a temporary blip, but from a consumer's standpoint there could be some noise out there," said Michael Kalb, a managing director at private investment firm Sun Capital Partners.

Kalb spoke to reporters via teleconference at the Reuters Hedge Funds and Private Equity Summit.

"We own a lot of retailers, and there is some slowing that we see," Kalb said.

Anecdotal reports of U.S. chain store sales have been mixed recently, but Redbook Research, an independent research firm, said on Tuesday that sales in March were down about 3.2 percent compared with February.

Boca Raton, Florida,-based Sun Capital's retail holdings include Bruegger's Bagels, Mervyns department stores, Levi's Outlet and Wickes Furniture.

"Retailers are fully valued now because consumer confidence has been high and the economy has been so strong. But I question whether there's an appreciation in the retail market of what would happen if there's a real (economic) slowdown," he said.

The housing market is commonly seen as the linchpin of the U.S. economy, and has been weakening for several months.  Continued...