Manhattan’s Newest Flagship Department Stores Are Ignoring the Retail Apocalypse
Manhattan is undergoing an unprecedented shift in its shopping scene.
Gone are the gargantuan Lord & Taylor and the Henri Bendel flagship and the Saks Fifth Avenue women’s store downtown. New arrivals are Neiman Marcus and Nordstrom.
Shakeups of this magnitude are a rarity in a market where stores can stay open for more than 100 years, through every downturn and depression.
The turnover underscores the extent of the duress that the retail industry is going through in the age of Amazon. On a net basis, the city will lose about 340,000 square feet of department stores this year—the equivalent of two Walmart Supercenters. At the same time, it highlights the enduring lure of Manhattan, the nation’s most prestigious place to sell fashion and luxury goods. When Nordstrom opens its mega-store in a skyscraper overlooking Central Park in October, it will be the biggest new retail space the city has seen in over half a century.
“Manhattan does not need another department store,” said Jamie Nordstrom, president of Nordstrom stores. “But we think they need a Nordstrom.”
For U.S. retailers, New York has long been a place to situate the crown jewel of their store networks, like Paris or London for their European counterparts. There are around 30 department stores on the island, ranging from discount shop TJ Maxx to luxury emporium Bergdorf Goodman, each vying for New York’s 8.6 million residents and the 65 million tourists who visit each year. Their selling floors take up a lot of space, nearly 6 million square feet in all, about the size of 100 football fields.
The flagship stores are usually much larger than their suburban brethren found in shopping malls across the country, since they count on both locals and out-of-town visitors to provide enough foot traffic to justify their size. Some are so big that a single store can have an enormous impact on its company’s performance. The 815,000 square-foot Bloomingdale’s on 59th Street occupies a whole city block and accounts for 18% to 20% of the retailer’s annual global sales, according to a 2018 report in Women’s Wear Daily.
The granddaddy of all the flagships is Macy’s Herald Square. Though it’s less luxurious than its glitzy Fifth Avenue competitors, Macy’s dwarfs its rivals. At 2.5 million square feet, with much of that devoted to retail space, the building is 17 times larger than the J.C. Penney in a mall across the street. Macy’s has been there since 1902, and was among the first buildings to be outfitted with a modern escalator. It was also the first in the city to hold a liquor license after Prohibition ended in 1933, and continues to be critical to the company.