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Times Announces the Death of Retail Chains in New York; will New York get a bunch of really cool boutiques and eateries instead?

For years, Bryant Park Grill & Cafe in Midtown Manhattan has been one of the country’s top-grossing restaurants, the star property in Ark Restaurants’ portfolio of 20 restaurants across the United States.

But what propelled it to the top has vanished.

The tourists are gone, the office towers surrounding it are largely empty and the restaurant’s 1,000-seat dining room is closed. Instead, dinner is cooked and served on its patio, and the scaled-down restaurant brings in about $12,000 a day — an 85 percent plunge in revenue, its chief executive said.

Five months into the pandemic, the drastic turn of events at businesses like Bryant Park Grill & Cafe that are part of national chains shows how the economic damage in New York has in many cases been far worse than elsewhere in the country.

In the heart of Manhattan, national chains including J.C. Penney, Kate Spade, Subway and Le Pain Quotidien have shuttered branches for good. Many other large brands, like Victoria’s Secret and the Gap, have their kept high-profile locations closed in Manhattan, while reopening in other states.

Michael Weinstein, the chief executive of Ark Restaurants, who owns Bryant Park Grill & Cafe and 19 other restaurants, said he will never open another restaurant in New York.

Of Ark Restaurants’ five Manhattan restaurants, only two have reopened, while its properties in Florida — where the virus is far worse — have expanded outdoor seating with tents and tables into their parking lots, serving almost as many guests as they had indoors.

“There’s no reason to do business in New York,” Mr. Weinstein said. “I can do the same volume in Florida in the same square feet as I would have in New York, with my expenses being much less. The idea was that branding and locations were important, but the expense of being in this city has overtaken the marketing group that says you have to be there.”

Even as the city has contained the virus and slowly reopens, there are ominous signs that some national brands are starting to abandon New York. The city is home to many flagship stores, chains and high-profile restaurants that tolerated astronomical rents and other costs because of New York’s global cachet and the reliable onslaught of tourists and commuters.

But New York today looks nothing like it did just a few months ago.

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by Anonymousreply 33August 12, 2020 1:20 AM

In Manhattan’s major retail corridors, from SoHo to Fifth Avenue to Madison Avenue, once packed sidewalks are now nearly empty. A fraction of the usual army of office workers goes into work every day, and many wealthy residents have left the city for second homes.

Many stores are still closed, some permanently, while those that are open have very little foot traffic.

For four months, the Victoria’s Secret flagship store at Herald Square in Manhattan has been closed and not paying its $937,000 monthly rent. “It will be years before retail has even a chance of returning to New York City in its pre-Covid form,” the retailer’s parent company recently told its landlord in a legal document.

“In the prime real estate areas, all the stores rely on having half international tourists and half local tourists or those from the local neighborhoods,” said Thiago Hueb, a founder of a jewelry company who had decided to close his flagship store on Madison Avenue before the pandemic struck because of high rents.

Now brokers are calling him trying to lure him back to the block, but Mr. Hueb, whose jewelry is sold in 80 department stores nationwide, is not interested. “The avenue is no longer what it used to be,” he said.

J.C. Penney and Neiman Marcus, the anchor tenants at two of the largest malls in Manhattan, recently filed for bankruptcy and announced that they would shutter those locations.

The Neiman Marcus at Hudson Yards, the first in New York City, had only opened last year, with its name adorning the outside of the luxury mall — the centerpiece of the country’s largest private development.

Some popular chains, like Shake Shack and Chipotle, report that their stores in New York were performing worse than others elsewhere, investment analysts said. A few dozen Subway locations have closed in New York City in recent months. Le Pain Quotidien has permanently closed several of its 27 stores in the city and plans to leave others closed until more people return to the streets, said Andrew Stern, co-chief executive of the chain’s parent, Aurify Brands.

A Gap Store near Rockefeller Center has stayed closed and has not paid its $264,000 monthly rent. Two T.G.I. Friday’s in prime locations, one near Rockefeller Center and another in Times Square, have remained closed while its restaurants elsewhere in the country have reopened.

by Anonymousreply 1August 11, 2020 6:13 PM

“Anyone in the food and dining business is really suffering right now,” said Vin McCann, a restaurant consultant with Heyer Performance in Lower Manhattan. “I think that’s true in all the boroughs.”

New York’s stringent lockdown and methodical reopening may have brought the virus to heel, Mr. McCann said, but it is also wreaking havoc on businesses with so few people going to work, virtually no visitors and many residents “a little loath to go out” and worried for their health.

“There’s going to be a lot of pain,’’ he added.

Landlords have started filing lawsuits against commercial tenants for not paying rent, accusing some national brands of trying to take advantage of the crisis.

“SL Green and landlords across the city have worked with retailers large and small to protect jobs and New York’s tax base during this crisis,” said Stephen Meister, a lawyer representing SL Green, which leases the Herald Square store to Victoria’s Secret.

But, he added, “Victoria’s Secret is a multibillion-dollar, publicly traded conglomerate exploiting the situation in an attempt to avoid paying its contractual rent obligations.’’

The store’s parent company, L Brands, did not respond to a request for comment.

A spokeswoman for Related, the developer of Hudson Yards, said the company remained bullish on the future of retail in New York City despite the closing of Neiman Marcus and the economic downturn.

“Retail at Hudson Yards was off to a strong start before this crisis hit, and we firmly believe that fashion and retail will always remain core to the vibrancy of New York,” the spokeswoman, Kathleen Corless, said.

New York’s shutdown dealt an especially painful blow to chains like Shake Shack that were born in the city and thrived as urban oases, said Nicole Miller Regan, who follows food chains for Piper Sandler in Minneapolis.

“That’s always been their core strength from a home-field advantage,” Ms. Regan said.

Shake Shack reported on July 30 that it had experienced a 40 percent decline in revenue in the second quarter and that its stores in big cities like New York “were most impacted by the Covid-19 outbreak.”

by Anonymousreply 2August 11, 2020 6:14 PM

They eventually reopened to serve takeout and deliveries, but they did not rebound as well as the company’s suburban locations that have drive-up windows where customers can avoid all but the briefest interaction, Ms. Regan said.

“The drive-through is the channel that consumers feel most comfortable with,” she said.

Like Shake Shack, Chipotle told investors that its stores in the Northeast, including New York, were underperforming the rest of the chain, said Nick Setyan, an analyst with Wedbush Securities in Los Angeles.

The main reason. Mr. Setyan said, is that “people just aren’t going to work” in much of Manhattan.

For Veggie Grill, a California-based chain of 35 restaurants, New York is “the most difficult market for us to operate in right now,” said Jay Gentile, the company’s chief operating officer.

After three years of planning, Veggie Grill, which serves plant-based sandwiches and salads, opened its first New York restaurant in the Flatiron district in December.

Now it’s struggling to keep the place open with a pared-down staff, and sales that have fallen about 80 percent from before the pandemic, Mr. Gentile said.

“In New York City, there is next to no lunch business,” he said. “No one’s coming in from Connecticut. No one’s coming in from New Jersey.”

And, there are no tourists wandering the streets, he added.

The story is different at some of the company’s restaurants on the West Coast, which are now doing as much business lately as they did a year ago, he said.

The shutdown and phased reopening of the city presented challenges that derailed Veggie Grill’s expansion plans. Three months after opening, Mr. Gentile had to lay off all 70 of its New York employees, including a general manager who was supposed to oversee the addition of three locations in the city. In May, the company hired back about 24 of the workers with expectations that business would pick up as the city reopened.

Now, the staff is down to 16 employees, only two of whom work full-time.

“We have two hours at lunch and 2½ hours at dinner to make our money,” he said. “We’re still paying very high rent. It’s unsustainable.”

Despite all the hardships, Mr. Gentile said he’s determined to keep the doors open. “If we close New York down,’’ he said, “then we would have to close it for good.’’

by Anonymousreply 3August 11, 2020 6:15 PM

This could be a good thing, maybe. We’ll finally get rid of all the Chick-fil-A bullshit.

by Anonymousreply 4August 11, 2020 6:19 PM

Yep, Chick-fil-A, Shake Shack, and all that other bullshit!

No one buys that stuff anyway.

by Anonymousreply 5August 11, 2020 6:21 PM

Maybe this will cause the gritting commercial landlords to lower rents finally.

by Anonymousreply 6August 11, 2020 6:23 PM

The chains leave. Rents go down to an affordable level. Independent operations take the chains' place.

Outside of some short term pain for greedy landlords, sounds like a win win situation to me.

by Anonymousreply 7August 11, 2020 6:29 PM

New York will become more provincial.

by Anonymousreply 8August 11, 2020 6:33 PM

This is what happens when the country elects terrible leaders

by Anonymousreply 9August 11, 2020 6:34 PM

[quote] “The avenue is no longer what it used to be,” he said.

Hmm, why could that be?

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by Anonymousreply 10August 11, 2020 6:45 PM

Chain stores are the death of New York

by Anonymousreply 11August 11, 2020 6:47 PM

Right on cue, the racist piece of shit troll @r10 chimes in.

by Anonymousreply 12August 11, 2020 6:51 PM

I go to work 2x a week now in Midtown. Its interesting to see where there are some crowds & where its empty. 7th Avenue btw Times Square & Penn Station has really picked up foot traffic. However, 6th Avenue north of 34th St. still empty but its more crowded south of 23rd Street. Financial District is a complete ghost town.

by Anonymousreply 13August 11, 2020 6:53 PM

How is that racist, R12? The idiot mayor painting BLM signs on 5th avenue should be derided.

by Anonymousreply 14August 11, 2020 6:54 PM

Fuck the billionaire tenants AND the billionaire landlords. There was a time there were wonderful places in NYC like Howard Johnson's Chock Full O' Nuts, the Automats, those places that had things like coconut drinks and great hot dogs, cafeterias, diners in all the boroughs, S. Kline's, Mays, Alexanders, thousands of private small stores and "luncheonette's." The greedy developers and landlords put them all out of business. I don't give a slightest shit if all these places for the rich go out of business and block after block is filled with empty stores and restaurants. Eventually the greedy landlords will beg people to rent for a much, much, MUCH lower rent. I hope the same thing happens with apartment buildings. Let NYC go back to being a place the poor, working poor and middle class can live. Let the people with baby strollers that cost as much as a car go to hell.

by Anonymousreply 15August 11, 2020 6:54 PM

R11 - Greedy landlords are the death of NYC. There are some chains I do like but they don't bother coming to NYC because the rents and taxes are too high.

by Anonymousreply 16August 11, 2020 6:54 PM

We need to change the tax laws that encourage empty storefronts. But to do that, we'd need a city government that isn't owned lock, stock, and barrel by real estate "interests" (read: gangsters). Now we've even got a NYC real estate mogul (read: gangster) in the White House. They own us. New Yorkers may have to tighten their belts, but rest assured the real estate developers (read: gangsters) will never miss a meal.

by Anonymousreply 17August 11, 2020 7:07 PM

Thank you, Bloomberg, for the deregulations. That's partly why these landlords are charging such astronomical rent. The art store on Canal had to close because of the $600, rent. You can't sell enough art supplies to cover that.

by Anonymousreply 18August 11, 2020 7:12 PM

[quote]Michael Weinstein, the chief executive of Ark Restaurants, who owns Bryant Park Grill & Cafe and 19 other restaurants, said he will never open another restaurant in New York.

Did someone who gets paid to do this actually write that sentence? In the New York Times, no less?

Oh, DEAR!

by Anonymousreply 19August 11, 2020 7:18 PM

They couldn't afford $600, R 18? Must be a really shitty art store.

by Anonymousreply 20August 11, 2020 7:24 PM

To the clueless idiot at R14: see those 5 letters on the building in the background at R10: T-R-U-M-P. It was done to piss off Donald Trump. The same reason they wanted to rename the street in front of Trump Tower "Barack Obama Blvd."

by Anonymousreply 21August 11, 2020 8:07 PM

Chain stores killed what was unique about NY. Now it's just like every mall in middle America

by Anonymousreply 22August 11, 2020 8:09 PM

R21, I'd sure like that fucking asshole De Blasio to come up with one idea that doesn't revolve around Trump, Trump, Trump. He wasn't elected to taunt Trump. He was elected to govern the city and has proven pathetically incompetent, if not purposefully inept. Who gives a fuck about his petty anti-Trump vendetta? The world is full of people railing against Trump. They're holding down the "Fuck Trump" fort just fine. There are hundreds of thousands of them. There is only ONE guy tasked with governing the city, and he ain't doing it, he's farting around for the cameras to score cheap political back-pats.

by Anonymousreply 23August 11, 2020 8:18 PM

I would love the end box stores in nyc. Remember how fun the personality / boutique stores were? Finding a shop that spoke to your personal aesthetic was great fun. - many of bleecker. . There will be some sort of vaccination & all this may or may not come to pass- crowds will begin to assemble , tourist will return , etc.

by Anonymousreply 24August 11, 2020 8:21 PM

I recall a time when there were new Gap stores on every block. The beginning of the end.

by Anonymousreply 25August 11, 2020 8:39 PM

I thought the beginning of the end was bank branches on every corner, r25.

by Anonymousreply 26August 11, 2020 8:40 PM

It's odd, because here in London we lost many of our banks.

by Anonymousreply 27August 11, 2020 8:52 PM

"Greedy landlords" = JEWS

by Anonymousreply 28August 11, 2020 8:54 PM

[quote]Remember how fun the personality / boutique stores were?

Well unfortunately they will remain just a memory. Little cute stores died when the internet took over. No one can compete with online stores.

by Anonymousreply 29August 12, 2020 12:58 AM

Yes, those little boutique stores are not coming back no matter what. It's all online now.

by Anonymousreply 30August 12, 2020 1:07 AM

Yes, R7. It will be ever so quaint with lovely local coffee shops and book stores and the local cobbler fixing shoes. Perhaps even an authentic boulangerie next to a wonderful Ethiopian hole in the wall. 🥰

Not check n’ go cash stations, bail bond shops, pawn shops, porn huts, and peep shows. Maybe a dollar tree if you’re fucking lucky.

by Anonymousreply 31August 12, 2020 1:12 AM

More room for us!

by Anonymousreply 32August 12, 2020 1:19 AM

R20, obviously 600k a month.

by Anonymousreply 33August 12, 2020 1:20 AM
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