We smell a buyout.
The Wall Street Journal is reporting that Madison Avenue's Crate & Barrel flagship, the chain's first Manhattan store, will close on August 2nd, five years ahead of its lease expiration and about 20 years after its opening. The departure frees up 62,000 square feet of retail space over two floors in the building that is likely to be divided into smaller stores and rented at as much as five times the store's current rates. Crate & Barrel is something of a vestige from the Madison Avenue of the mid-1990s when its stores were more of a mix of retailers. Since then, the street has evolved into a pure luxury district, and while C&B is plenty upscale and presumably did good business there, it probably has a greater opportunity to grow further east or west in Manhattan where it can better catch the segments of its core customer base who are less likely to go to Madison Avenue to shop with them
Unfortunately, the chain does not have a replacement store lined up, and is not expected to open one in the near future, leaving its store at Broadway and Houston Streets as its sole Manhattan location (excluding the CB2 stores in SoHo and on the Upper East Side). "This was a difficult decision and we are grateful to our departing associates for their hard work and service," the company expressed in a statement. "We remain well positioned to serve the New York market through our SoHo store, as well as stores in the surrounding area and through our website."
While Crate & Barrel was astute to realize that by the time lease renewal would come around, its rent at 650 Madison would increase dramatically, it ostensibly has little to gain by closing the store early, as it is still well positioned to take advantage of Upper East Side customers and tourist business. One can only presume that its landlords made a very favorable offer to the store to encourage it to get out quickly so they could maximize revenue from the building's retail space that much sooner. That would explain the store's abrupt closing without a replacement location in place.
Hopefully, Crate & Barrel will have a new location for the store soon. It could easily be supported on the Upper East or even West Side (or both) not to mention burgeoning Brooklyn. It would certainly help the store's 100 or so employees who will be out of a job come August.
Crate & Barrel to Close Manhattan Flagship Store (Wall Street Journal)