Retail will be “smaller but healthier” in 5 years: Sternlicht

Starwood Capital CEO said companies will have to trim their boardrooms as they close stores

May.May 04, 2017 10:30 AM
The Polo Fifth Avenue flagship store and Starwood Capital’s CEO Barry Sternlicht (Credit: Getty Images)

From TRD New York: Retailers are closing stores across the city and the country, and in the end the industry will be better off for it, Starwood Capital Group’s Barry Sternlicht said.

“A lot of retailers don’t know how to behave in this environment, and they’re panicking,” Sternlicht told Bloomberg. “I see the tenants in my malls that get it, and the ones that are as confused as can be.”

Manhattan saw a net loss of 24 chain stores last year, and Ralph Lauren’s decision to close its Fifth Avenue flagship store is just the latest in a long line of talking points on the struggling retail industry and the overheated retail real estate market. The borough’s retail availability grew nearly 25 percent during the first quarter of the year.

Sternlicht, whose company owns shopping malls across the country, said that in five years the nation’s retail landscape will be “smaller but healthier” as remaining stores have less competition, Bloomberg reported.

He pointed to companies like CVS Health Corp. and Estee Lauder – where he sits on the board – as examples of retailers that are bucking the trend and actually growing. And as companies downsize their bricks-and-mortar footprints, Sternlicht said it’s just as important that their corporate headcounts are appropriate to the new landscape.

“This slow death of cutting stores doesn’t always work, unless they cut corporate,” he said. “That’s much harder to do.” [Bloomberg]Rich Bockmann

Related Articles

3339 Exposition Blvd. and Asher Luzzatto

Luzzatto Co. assembling creative office hub in West Adams

Jason Illoulian and the Cemex plant

Faring makes $30M assemblage play on WeHo/LA border

From left: Nuveen CEO Vijay Advani, Graymark founder/CEO Brian Hecktman

Graymark, Nuveen pay $97M for El Segundo creative office

La Mirada industrial building

Clarion pays $77M for La Mirada industrial project

510 Park Avenue and CEO of Monster Beverage Rodney Sacks

Monster Beverage affiliate guzzles down industrial project in San Fernando

Starwood Capital Group CEO Barry Sternlicht and Lantana campus (Credit: Getty Images and Ehrlich Yanai Rhee Chaney Architects)

Starwood Capital set to buy part of Lantana office campus for $220M: sources

From left: Saeed Nourmand, Michael Nourmand, Grant King and Richard Heyman

Relevant Group sues Nourmand & Associates’ founder, alleging extortion over hotel projects

Centennial founder and CEO Steven Levin with a rendering of the project

Centennial Real Estate approved for sprawling $300M mixed-use village