Retail coming to Philadelphia (Liberty, Gap: student loan, seasonal, influx)

[rowhomecity]

Originally Posted by cpomp

It really is a head scratcher for me at this point.

Yet, King of Prussia mall just added a Zadig & Voltaire, and from what I hear the high-end retailers are all content with the amount of business they're getting. The super high-end retailers (Bottega Venetta, Fendi, etc.) do not have high foot traffic, but they get clientele that will drop $20,000 on a visit, likely the Main Line crowd.

I know Philadelphia is not KoP, its just odd that the city (especially Center City) is going through a bit of a renaissance and increased tourism, yet shops are closing left and right. Some of course are not the fault of the city (Barneys, Papyrus, etc.).

I wonder how much fault landlords have in this, some stores may have been forced to close if rents were too high even if they performed well. Its rare these days that a retailer will stay open if they aren't making money on a location, its even visible on 5th Ave and Madison Ave in New York.

But its not all bad, the Fashion District is attracting a solid lineup and has been busy the few times I passed through, I figured Center City had enough demand to extend the retail district rather than replace / play musical chairs.

(Scotch and Soda is an awesome store, the Macys in Herald Square recently added a Scotch & Soda section, it would be cool if the Philadelphia Macys got some sprucing up and new lines introduced).

Yes brick and mortar retail is going through a major transition. I have read many articles and at one point we were over saturated with the number of retailers across the country.

Many retailer's also took for granted the rise of online shopping, and shifted their business strategy too late and therefore have suffered. I do see this as a mix of rising rents and poor retail growth/strength.

I do think with Walnut St. a great deal of it is due to rising rents though. At one point I remember reading that Walnut St. had one of the highest % increase of commercial rent of prime shopping corridors in the nation. The fact Zara closed shocked me. It was always busy. I suspect it dealt with the rent increase. In the article it states many of the leases are ending this year on Walnut and a decent stake of these retailer's have chosen not to renew.

Scotch & Soda is a really awesome store. I thought it would be much more busy than it is, given the 'creative culture' of the city.

I would love to see a Massimo Dutti open up in Center City. But now I have low faith of any new store openings for at least a year or two until the rents can correct themself.

[cpomp]

Originally Posted by rowhomecity

Yes brick and mortar retail is going through a major transition. I have read many articles and at one point we were over saturated with the number of retailers across the country.

Many retailer's also took for granted the rise of online shopping, and shifted their business strategy too late and therefore have suffered. I do see this as a mix of rising rents and poor retail growth/strength.

I do think with Walnut St. a great deal of it is due to rising rents though. At one point I remember reading that Walnut St. had one of the highest % increase of commercial rent of prime shopping corridors in the nation. The fact Zara closed shocked me. It was always busy. I suspect it dealt with the rent increase. In the article it states many of the leases are ending this year on Walnut and a decent stake of these retailer's have chosen not to renew.

Scotch & Soda is a really awesome store. I thought it would be much more busy than it is, given the 'creative culture' of the city.

I would love to see a Massimo Dutti open up in Center City. But now I have low faith of any new store openings for at least a year or two until the rents can correct themself.

Massimo Dutti closed both of their US locations (NYC and DC) last year, so that will never happen.

There are a few retailers that would do well in Center City that aren't currently there. Patagonia is one that comes to mind.

[KansastoSouthphilly]

Yikes. That is a lot of closures. I hope the Banks let the landlords lower the rent enough to find new tenants. I worry about a Walnut Street lined with non stop Bank and Cellphone storefronts.

[rowhomecity]

Yea it is bleak. I believe it also mentioned the H & M might not renew their lease on Walnut St. as well when it expires later this year.

The landlords are driving all the tenants out.

[FindingZen]

Originally Posted by rowhomecity

Yea it is bleak. I believe it also mentioned the H & M might not renew their lease on Walnut St. as well when it expires later this year.

The landlords are driving all the tenants out.

Considering there are three H&M's in Center City, including two within a couple blocks of each other, it makes sense that (at least) one would eventually close.

[Pennsport]

The truth is that retail brick and mortar is pretty much done and done. My wife and I, and our friends, spend a good amount of money on "stuff." I haven't, and don't know anyone who has, purchased anything offline in years. The good news is that what was previously retail can now be another home, restaurant, movie venue etc... When you think about it, do we really need retail clothing or furniture stores?

[banjozac]

Originally Posted by Pennsport

The truth is that retail brick and mortar is pretty much done and done. My wife and I, and our friends, spend a good amount of money on "stuff." I haven't, and don't know anyone who has, purchased anything offline in years. The good news is that what was previously retail can now be another home, restaurant, movie venue etc... When you think about it, do we really need retail clothing or furniture stores?

I’m sorry, but I don’t believe that it’s been years since anyone that you know has purchased clothes in a retail shop.

[Fireshaker]

Originally Posted by banjozac

I’m sorry, but I don’t believe that it’s been years since anyone that you know has purchased clothes in a retail shop.

I feel that clothing is one area where still is a place for retail, if only so you can try the stuff on and make sure it fits before you buy. Personally speaking, sizes and manufacturers and makes and cuts are all so variable that it makes online shopping more difficult than, saying, buying a book or some other less personal item. Unless it's a case where I'm familiar with the brand and am 100% confident of the sizing, I will go out of my way to avoid buying clothes online.

Now, obviously, it probably won't ever be what it was pre-internet, but I would be surprised to see all apparel retail go under. I think it will have a market, even if a much smaller one.

[cpomp]

Originally Posted by Fireshaker

I feel that clothing is one area where still is a place for retail, if only so you can try the stuff on and make sure it fits before you buy. Personally speaking, sizes and manufacturers and makes and cuts are all so variable that it makes online shopping more difficult than, saying, buying a book or some other less personal item. Unless it's a case where I'm familiar with the brand and am 100% confident of the sizing, I will go out of my way to avoid buying clothes online.

Now, obviously, it probably won't ever be what it was pre-internet, but I would be surprised to see all apparel retail go under. I think it will have a market, even if a much smaller one.

Young people also don't seem to spend as much on clothes / accessories these days. People like cheap, fast, casual. That has to hurt the industry to some extent, especially the department stores.

[Fireshaker]

Originally Posted by cpomp

Young people also don't seem to spend as much on clothes / accessories these days. People like cheap, fast, casual. That has to hurt the industry to some extent, especially the department stores.

Oh absolutely! I think there's a reason stores like Primark are big now.