National chains like Victoria’s Secret, Gap, Le Pain Quotidien, Kate Spade, J.C. Penny had kept their high-profile locations in Manhattan closed amidst the Corona Virus Global outbreak.
Now that the city is re-opening, there are chances that a lot of major brands will most likely abandon New York. With businesses being hit drastically due to the pandemic it will be years before anything could get back to normal.
New York is the most expensive of all other states has hosted the flagship stores of all major international brands. However concerning the situation at the moment where dining rooms are closed, offices are empty, and tourists are gone it’s going to be very difficult for anything to get back to how it always was.
Ark restaurants have currently opened only two of its branches in Manhattan out of five in total. On the other hand, their properties in Florida are now open with expanded outdoor seating of tents and tables in parking lots, so as to be able to serve as many guests as they head indoors.
Even though Florida has been hit even worse from the pandemic than New York, Michael Weinstein the chief executive for Ark restaurants mentioned that he would never open another restaurant in New York now. Instead, he would be more interested in Florida given the circumstances.
He said he could easily do the same volume in Florida with the same square feet as New York with much lesser expenses.
With empty retail corridors and busy streets, New York is not even close to how it was only few months back. The majority of its wealthy residents have already moved out and most likely there isn’t going to be any tourist crowd soon as well. In any expensive real estate spot, prime income of retail stores relies on international tourists and local wealthy residents.
With both the options being closed it’s quite predictable that soon most of the brands will move out of the city.
Owing to the hit on businesses and the astronomical rents of Manhattan, Neiman Marcus, and J.C Penny have even filed for bankruptcy recently. Even Victoria’s Secret flagship stores have been closed for 4 months now and haven’t paid there due rent of $937,000 per month. One of the Gap Store near Rockefeller Centre has also not been able to pay its monthly rent of $264,000.
Landlords are filing lawsuits against commercial tenants for non-payment of rent, claiming that most of these national brands are only taking advantage of the crisis. Stephen Meister, a lawyer representing SL Green and landlords mentioned that they have worked with their tenant retailers to help them protect jobs amidst the crisis.
However, he did mention that Victoria’s Secret is a multibillion-dollar company is exploiting the situation to avoid paying its contractual rent obligation. The shut down has been genuinely painful for most of the retailers in New York owing to high expenditure city invites. Un-sustainability has now caused retails brands to abandon the once preferred location.