For over a century, Fortune 500 retail-based companies used flagship stores to represent a crown jewel for the business. With the rising retail rents throughout America’s high-income corridors, those traditional retailers are jumping ship and focusing more on those premium dollars online.
Companies like Gap, Tommy Hilfiger, Lord & Taylor, and Polo Ralph Lauren have all shuttered their stores on Manhattan’s iconic Fifth Avenue. Some brands who have tried to fight against the inevitable turn have become dinosaurs; Barney’s New York being an ideal example.
The disconnect between the retailers and landlords comes from years of price conditioning, where companies would pay exorbitant rents in exchange for visibility. What this means for the retail environment is that there is a serious correction brewing for the 2020 season.