As retailers nationwide brace themselves for what is expected to be a bloodbath during the holiday shopping season, the damage assessment among New York retail brokers is already under way.
This month, in a series of stories, The Real Deal looks at how retailers in the five boroughs are dealing with a period where sales of the canned mystery meat Spam are reportedly skyrocketing, while luxury brands like Porsche and Tiffany are struggling.
Until banks started toppling and the economic news became a daily crisis briefing for millions, retailers earned serious bragging rights in New York for announcing expansion plans of dozens of stores. But projections that retailers made as recently as a few months ago have now been scaled back and brokers are expecting little to no growth during the downturn (see Mum’s the word from retailers).
But while New York is, of course, suffering with the rest of them, national chains are not closing as many doors here as they are elsewhere. While the nationals have halted expansion plans and even closed many locations in the city, their stores here are often their highest grossing sales centers. Nonetheless, brokers say some local merchants, who often rely on credit to stay afloat, are already calling it quits (see How many more stores will shutter?).
Indeed, while Manhattan-wide asking retail rents have dropped slightly since last year (see Retail rent drops offset by concessions), some areas are suffering more than others. In Harlem, asking rents fell by a hefty 26 percent since last year (see Uptown rents plunge).
The Upper East Side is seeing the reverse phenomenon. Although retail bidding wars there are a thing of the past, the market is faring better than other areas, partly because of the new high-end developments going up along Third Avenue (see Upper East Side rents finish strongest).
And finally, while much has been written about the floundering national banks scaling back many of the prime corner retail spots they gobbled up over the last few years, it now seems that several second tier banks are at least considering stepping in to take some of that space (see Small banks eye Manhattan branches).