Department store apocalypse is taking its toll on NYC
Department store apocalypse is taking its toll on NYC
By Steve Cuozzo July 14, 2018 | 8:39am
I’m going to miss Lord & Taylor like mad when the
Fifth Avenue flagship closes next year. It isn’t only because of the unlikely
bargains I scored on its often-deserted men’s floors — a red vinyl Perry
Ellis-label jacket, marked down from $79.95 to $39.95 that strangers
hilariously mistake for Armani, and a wool winter coat as good as any for
$49.99.
I won’t miss the once-charming but more recently
cheap-looking holiday windows that weren’t worth waiting on line for. But Lord
& Taylor, like every big department store, offered a welcoming civility
that softened the city’s rough edges. New York will be slightly less human
without it, however obsolete its business model. Never again will the public
enjoy the store’s grand main floor with its noble vaulted ceiling, arched
mirrors and stately columns.
The shutdown is one of up to 10 Lord & Taylor
closures of a total 50 stores planned by chain owner, Hudson’s Bay Company. It
comes amidst a nationwide department store apocalypse. Hudson’s Bay, which owns
488 stores including Saks Fifth Avenue, is battling high debt, declining sales
and falling stock prices.
Another industry giant, Macy’s Inc., which also owns
Bloomingdale’s, has closed 14 percent of its stores since 2014, while its
same-store sales in 2017 fell 4.3 percent compared with 2016. J.C. Penney
closed 138 locations, or 14 percent of its stores, last year.
Jeffrey Roseman, vice chairman of Newmark Knight Frank’s
retail-brokerage division, told The Post, “The need for an eight-story,
multi-hundred-thousand square-foot department store in major cities is limited
at best.”
Noting that most main floors are turned over to
cosmetics, Roseman said, “What woman wants to buy fragrance there? They can go
into Sephora, Ulta or Blue Mercury and get the same stuff cheaper and be out in
10 minutes.”
But while department stores might be extinction-bound
dinosaurs, they’re charming dinosaurs to have around.
Cities, as urban-planning god Jane Jacobs wrote in her
classic 1961 book “The Death and Life of Great American Cities,” are about
multiplicity of choice. Department stores provide infinite choice, or at least
the mirage of it — the opposite of boutiques that peddle a single designer or
brand.
Department stores welcome everyone to peruse enticingly
displayed cocktail dresses and necklaces, sofas and floor lamps under one roof.
Trying things on is a breeze. Although I buy tons of stuff from Amazon and at
no-frills discounters such as Century 21, I still crave the sense of abundant
prosperity conveyed by Bloomingdale’s over-the-top model rooms and Saks Fifth
Avenue’s stately procession of designer suits.
Sure, they’ve long been losing ground. Once-distinct
department stores began looking more alike as powerful fashion lines came to
dictate retail layout and design. They staggered through a beating from big-box
and “category-killer” discounters but now face a possible knockout blow from
online retailing.
Too bad, because department stores are among the most
agreeable places to mingle, meet friends, linger on a rainy day — and eat. Many
have fine restaurants like Macy’s marvelous Italian trattoria Stella. They
offer public toilets that don’t require nuclear code-like protocols to use.
But almost every property in Manhattan today is worth
less than its redevelopment value — a fact that puts all department stores at
risk.
Sure, a small new Saks Fifth Avenue opened downtown last
year and two more department stores are coming to Manhattan in a year or two.
But the combined 652,000 square feet of the planned new Nordstrom on West 57th
Street, Neiman Marcus at Hudson Yards and Saks at Brookfield Place are less
than soon-to-go Lord & Taylor’s 676,000 square feet, which will become part
of the mushrooming WeWork empire.
Meanwhile, Macy’s on Downtown Brooklyn’s Fulton Street is
shrinking from 378,000 to 310,000 square feet as the building is swallowed up
in a new development.
Barneys’ Madison Avenue flagship might not survive an
arbitrator’s upcoming possible decision to bless the landlord’s demand for a
fourfold rent increase that the store says it can’t afford.
Even Saks’ great Fifth Avenue flagship is potentially at
risk. One major shareholder in Hudson’s Bay Company wants to unload it to make
room for an office or apartment tower, although the company said it has no
intention of doing so.
Lord & Taylor’s Fifth Avenue store suffered not only
from real-estate pressure but from bad mismanagement. The store put more energy
into preventing the pilfering of $50 items than providing service to customers
who might spend $5,000. While I often looked in vain for sales help, a
ferocious security guard once chased my wife when a false-alarm buzzer sounded
until a manager came to her rescue — and offered her only a weak apology.
But losing it is a pity nonetheless. WeWork paid $850
million for the building, an offer that Hudson’s Bay, grappling with a $646
million operating loss in the last fiscal year, couldn’t refuse.
WeWork hopes to attract companies to its “people-centered
design and connected-space technology.” The people at 424 Fifth Ave. will no
longer include shoppers, browsers or salespeople hawking fragrances.
It won’t be the same without them. No, ladies, I don’t
want to “experience Giorgio today” — but I’ll miss being asked.
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