What does it mean when the national chains aren't interested in renewing a lease with a rent increase? We don't know it that is exactly the reason why the sibling Williams-Sonoma and Pottery Barn stores on 59th Street have become available, but The New York Post is reporting that 32,000 square foot space that the stores have shared for the past 15 years is on the market. Perhaps the stores are moving to higher profile space nearby and rent isn't the issue. While a half a block between Bloomingdale's and Park Avenue can be considered a pretty favorable location, sometimes major stores can get lost mid-block on a side street, and there may be some better space available from which to serve the Upper East Side on Third Avenue, but the stores took the space in the late 90s, when rents were much lower, and 15 years suggests the end of a typical 10-year lease including a 5-year renewal option. Many will remember the location as the home of the legendary disco-era store Fiorucci, which famously employed nightlife figures who modeled the store's wares at Studio 54 for regular customers like Andy Warhol and Jackie Onassis. As that store fizzled, Urban Outfitters took over the final years of its lease before Pottery Barn and Williams-Sonoma took over after a major remodel that added custom façades for the retailers. With rents what they are, it seems hard to imagine that a flashy, fun, store like Fiorucci would ever be able to thrive in such large location at a $400 a square foot rent.
It's become something of a scandal in both the retail and restaurant worlds in New York that longtime merchants are routinely being forced to uproot and move or shut down as their leases come to an end due to steep rent increases thanks the the current real estate boom in the city. The result has been a lot of empty storefronts in affluent shopping areas all over Manhattan as landlords (many of whom are in other cities or countries) patiently wait months and even years for that deep pocketed bank or chain store or restaurant to pony up the dough for the space.
But Pottery Barn and Williams-Sonoma are national chains.
If they aren't willing to absorb a rent increase, then who is? And how can any store expect to stay in the same place for more than 15 years at the most? Maybe they no longer will. Perhaps the days of an independent or even small chain store remaining in place over decades are over. Maybe retailers should just set up shop in mobile home units, ready to take off and move at a moment's notice.