Retailers! Fasten Your Seatbelts!

July 26, 2017

Winners and losers emerge from

Manhattan’s challenging retail landscape

In these unsettling days, we all seem to think that Amazon is taking over the world. Not quite. At least not in New York City, according to a recent article in the New York Post of 4/25/17 by Lois Weiss, who sums up the current situation this way.

“The more than two dozen chain and department store restructurings and closures announced this year have sent ripples across America. But while locals may be worried, NYC has not yet been too adversely affected.”

The same article quotes Faith Hope Consolo, chairman of Douglas Elliman Retail who says, “This is the most challenging environment we’ve seen in 20 years.”

WHO ARE THE WINNERS?

Uniqlo and Zara are two winning fast-fashion brands in the urban retail battlefield, along with “mass-class” makeup companies such as: Sephora, MAC, Glossier and newcomer Ulta Beauty. Food is also maintaining its appetite as fast-casual eateries and food halls enjoy brisk business.

And, let’s not forget all the visitors to NYC. This year’s expected total of 61.8 million travelers – 13.1 million from other countries – is huge and not to be dismissed. Having just had out-of-town guests from western Canada I can honestly say that when they come, they spend. My visitors saw everything from Ellis Island (which fascinated them) to the Metropolitan Museum and everything in-between in three-and-a-half days.

IS AMAZON GOOD FOR AMERICA?

This is the title of a second piece in the same issue of the New York Post. The author, Lisa Fickenscher, starts by relating an interesting story told to her by a young couple with three kids who were always running out of diapers. “With both of us working and a family of five we quickly realized we didn’t have time to run to the store,” the husband says. “That is when we discovered the magic of Jeff Bezos’ e-commerce giant.”

Bezos, has grown his humble, online bookshop in 1995 into one of the most powerful economic engines on earth. He has just become the world’s second-richest person, worth $76 billion. His company now employs 341,400 full- and part-time employees and will add 100,000 full-time jobs over the next 18 months. CLICK HERE: Creativity and More Thrives in Garages, June 28, 2017

AMAZON MAY BE ADDING JOBS IT HELPED KILL OFF

For example, Amazon has played a large role in eliminating more than 50,000 jobs in recent years from just three companies – Staples, Office Depot and Best Buy. And, it is estimated that it will destroy 1.5 million retail jobs in the next five years.

Currently, the grocery business is in Bezos’ cross hairs. He is developing an Amazon Go store, which will allow the company’s Prime customers to pull items off shelves and carry them home without passing through a cashier’s line. They simply scan their phones on a kiosk when they enter the store and Amazon technology charges their account after they leave the store.

A FLAGSHIP STORE CLOSES

The closing of Ralph Lauren’s Fifth Avenue store is unprecedented according to industry experts. The iconic fashion house has recently closed 50 stores. It signed a $400 million, 16-year lease for the flagship store in 2013. The lease is not up yet so the company pays rent of $68,500 A DAY until there’s a new tenant.