“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