New York fashion can often take a while to trickle into the middle of the country. And let’s just admit it, some of the styles just never look the same on Main Street as they do on Fifth Avenue. But there is a trend in fashion that’s hitting New York that is also reverberating in the heartland: the death of retail.
The New York Times reports that upscale Lower Manhattan stores are closing and rents are dropping. At the same time, the most desirable real estate in town is in warehouse districts in Brooklyn. They’re being snatched up not by traditional storefronts but ecommerce companies.
“It’s the difference between a slow decline and an absolute apocalypse, extinction-level event,” Thompson says. “You have a group of old brick and mortars – legacy brick and mortars like J.C. Penney and Macy’s that were struggling. But now you have as many bankruptcies in the first three months of 2017 as you had in all of 2016 – and 2016 was the worst year since the recession.”
RadioShack, Sears, J.C. Penney and Macy’s have each closed hundreds of stores, and Payless has filed for bankruptcy. But it’s not just big department stores, Thompson says, but the “cool” retailers, too. Company stocks for Lululemon, Urban Outfitters and American Eagle have hit multi-year lows.
The main assumption is that ecommerce is the reason for retailers’ downfall, but Thompson says that’s not the only reason. There’s also a structural shift from spending in retail to spending on restaurants and bars, and families have less in their spending budgets altogether.
“It’s not the end,” Thompson says. “You clearly have some retail that’s going to continue to exist, it’s just going to be eventually the minority of the total retail market.”
Written by Beth Cortez-Neavel.