Hundreds of US department store closures likely: report

Industry struggles amid rise in online retail

TRD NEW YORK /
May.May 17, 2017 09:20 AM

Macy’s Herald Square

Hundreds of department stores will have to close if companies want to get back to normal revenues, according to a new report.

A year ago Green Street Advisors predicted that around 800 stores would likely need to close, but now the research firm said the number has risen as mall operators grapple with flagging sales and growing competition from online retail.

“Just a year later, the 800 number looks much too light on a strict sales productivity standpoint and is much lower than what will ultimately be needed as the industry will likely need to massively rationalize its store count as it reinvents its business model,” the firm said, according to the Wall Street Journal.

Department store operators Macy’s, Kohl’s, J.C. Penney and Hudson’s Bay all reported falling sales in the first quarter.

A broader decline in brick-and-mortar retail revenues is hitting Manhattan landlords hard, with availability rates in some prime markets like Times Square and Fifth Avenue near Bryant Park hovering close to 30 percent in the first quarter, according to Cushman & Wakefield.

Earlier this year J.C. Penney said it would close 138 stores, while Macy’s previously said it plans to shutter 100.

Hudson’s Bay has also explored stacking apartments and office space above its Lord & Taylor flagship on Fifth Avenue to make up for falling revenue. [WSJ]Konrad Putzier

(To view retail leases by department stores, check out our Deal Sheet)


Related Articles

arrow_forward_ios
Clockwise from top left: 312 West 34th Street, 61 North 9th Street, 639 Classon Avenue, and One Fulton Square (Credit: Google Maps)

These were the top 10 NYC retail leases in July

Ricky's at 830 Broadway (Credit: NYC Go)

Ricky’s, iconic NYC beauty shop, faces
more closures

From top, clockwise: Cushman & Wakefield's Joanne Podell, Showfields' Amir Zwickel, Appear Here's Josh Yentob, Brookfield Properties's Mark Kostic (Credit: Getty, LinkedIn)

When it comes to retail, “real estate in New York is fundamentally broken”

Macy’s Herald Square (Credit: iStock)

Macy’s new skyscraper missing one key thing

Simon Property Group CEO David Simon and Brookfield Property Partners CEO Brian Kingston (Credit: Getty Images)

Done deal: Forever 21 sold to Simon, Brookfield venture for $81M

Brookfield Asset Management CEO Bruce Flatt

“We underwrite every investment like we’re going to hit a recession”: Brookfield CEO

Forever 21 cancels auction (Credit: Getty Images)

Forget the Forever 21 auction: Simon Property Group, Brookfield to buy retailer

The Strand at 828 Broadway and Book Culture at 450 Columbus Avenue (Credit: Wikipedia, Google Maps)

Strand to take over former Book Culture location on UWS

arrow_forward_ios
Loading...