Bleak Days Regarding Bleecker Street Retail Is A Sign Of The Times
The rise and fall of one of New York’s most iconic streets is a cautionary tale for retailers and landlords.
The lesson to be learned by The New York Times’ fascinating article about the boom and bust of Bleecker Street is to be careful what you wish for. When Magnolia Bakery was featured on “Sex In The City” in 2000, the ensuing publicity and hordes convinced one high-end corporate chain after another that Bleecker was the place to be. It started with Robert Duffy, then president of Marc Jacobs, to open a store nearby. He eventually opened six in the neighborhood. Rents skyrocketed from landlords demanding $45,000 a month from tenants who had previously paid $7,000. It all turned out to be a massive retail case of the Emperor’s New Clothes.
When the old indie stores left, exclusive chains replaced them, seizing a branding opportunity to be cool and in the mix, arriving with fashion editors and celebrities in tow. However, like a diet of champagne and canapés, the dizzying hype of fashion outposts of Ralph Lauren, Tommy Hilfiger, Coach and Mulberry, soon faded to leave businesses feeling empty and a little sick. The foot traffic never materialized. Things started to look mighty bleak on Bleecker Street. The fabulous set left and vacancies rose.
It’s a cautionary tale for neighborhoods earmarked as being the “next big thing”. The hype needs to be supported by a financial bedrock. Bleecker St, on paper, at least seemed to have a lot going for it. It was in Manhattan and in the Village after all. There was plenty of reason to believe that the transformation which had occurred earlier on Prince Street and West Broadway, with tenants like Apple taking up occupancy could also happen on Bleecker St. However, that may have also been park of the problem.
There was too much competition nearby and when rents increased by 500 percent it was way too dramatic for the neighborhood to keep pace. Tourists alone couldn’t sustain a neighborhood. Many New Yorkers associated Bleecker St with funky stores like Rebel Rebel Records and Condomania and weren’t buying the new incarnation. In fact, some may have been turned off by it. Tourists were more content to snap Instagram pics on Sex & The City tours than fork out exorbitant prices for designer threads. They had nearby Canal St. for the knock off versions.
Bleecker St.’s problem though, is the same thing that is hurting New York retail in general. Sky high rent increases are just not practical in age of Amazon.
“A small number of players will do well,” Scott Galloway, clinical professor of marketing at the NYU Stern School of Business and founder of digital market research firm L2, told Crain’s New York of the retail squeeze in NYC: “Luxury brands will hold their own—you still can’t buy Hermès on Amazon. There will be some artisanal guys that will manage to hang on because they’re so exceptional. You’ll see Starbucks, Chipotle, more Warby Parker stores. And everyone else will get crushed.”
AGORAFYDo you know how the so-called “affordable” real estate in New York is getting less affordable by the day whereas the city’s luxury market is softening? #luxury #condo https://goo.gl/Avx5AS
AGORAFYOne of the most iconic buildings in Boston has officially been sold and hopefully, the iconic station will be upgraded. #Boston #SouthStation https://goo.gl/rzWxXS
AGORAFYThis week, three of the apartments in the starchitect-designed West Chelsea condo have hit the rental market. #zahahadid #chelsea https://goo.gl/7Z7LBF