As a result of heightened security outside President-elect Donald Trump’s Trump Tower, luxury stores along the most valuable stretch of retail in the world are expected to take a hit in sales this holiday season, industry sources told The Real Deal.
The New York Police Department, along with the Secret Service, imposed pedestrian barriers, roadblocks and other security measures along Fifth Avenue between 56th and 57th Streets to protect Trump , and the restrictions are expected to remain in place until at least Jan. 21.
The barriers reduce the width of the sidewalk on the west side of Fifth Avenue between 56th and 57th Street, in front of retailers Abercrombie & Fitch at 720 Fifth Avenue and Prada at 724 Fifth Avenue, to just a few feet in places. On the east side of the street, Gucci’s retail space at Trump Tower at 725 Fifth Avenue is protected by barriers and a tighter police presence.
There had been a line of sand trucks Thursday in front of Trump Tower, but by Friday morning, they had been removed.
The Upper Fifth Avenue corridor is home to some of the most expensive retail rents in the world. Cushman & Wakefield last year pegged rents in the district at $3,500 per square foot, which it said was the globe’s priciest. Bulgari is reconstructing their flagship store at 730 Fifth Avenue, and paid more than $5,000 per foot in rent, according to sources.
The pedestrian and vehicular restrictions, combined with the annual holiday Christmas shopping and the additional tourists seeking out Trump’s home, are expected to lead to gridlock that will reduce sales.
A decrease in retails sales “is a concern,” said Tom Cusick, president of the Fifth Avenue Business Improvement District, which focuses on security and cleanliness issues for local property owners and retailers.
“I have been in direct contact with some retailers and property owners who raised concerns,” Cusick said.
This week, the BID reached out to the NYPD and Secret Service to coordinate a meeting in the coming days to discuss the security measures and how they are impacting the BID’s members.
“I will give you a parallel. Whenever we have large parades, retail activity drops sharply,” Cusick said.
Mayor Bill de Blasio said there would be disruptions but said gridlock during the shopping season is typical, according to the New York Times.
“Look at the bright side: The holidays are coming anyway. Midtown is going to be all messed up anyway,” de Blasio said at a news conference.
Brokers said the potential to depress sales was immediately apparent.
“I was caught in the middle of the protests the other night, and the first thing I said is, ‘What is the impact of these protests on retail on Fifth Avenue?” Gary Trock, a retail broker at CBRE, told TRD.