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There's a cluster just southeast of Central Park that's about to look really, really empty due to the sudden absence of three giant retail properties. This June, Crate & Barrel closed its massive, 20-year-old Madison Avenue flagship, while Williams-Sonoma is expected to close its location near Bloomingdale's by the end of the month. And now, the Pottery Barn next door is joining the exodus, with its East 59th Street store in the process of shutting down by the 30th as well.
"In a span of 60 days, that section of town has lost close to $100 million in sales of plates and forks," one of the marketers for an East 59th Street retail condo told Commercial Observer. "You could have gotten anything for your table within a span of two blocks and now you can't."
For a hint as to why, consider what's happening with Toys 'R' Us in Times Square and FAO Schwarz on Fifth Avenue. In short, it's a better deal for landlords to split retail properties up into smaller spaces and drive up the rent among multiple tenants. And with Fifth Avenue and the surrounding area's retail rents the most expensive in the world, it's no surprise that a single tenant wouldn't want to pay the price of a big box flagship anymore.
But it's also far more complicated than that. As brands like Pottery Barn or Crate & Barrel have achieved more name-brand recognition, having a swanky address is far less important than it was when their flagships debuted some 15 to 20 years ago. These days, what's inside is what matters.
Luxury retail specialist Soozan Baxter told the paper that home goods retailers are facing competition against brands like Restoration Hardware, which has "adapted to the times, builds gorgeous stores, is adding a boutique hotel to its Manhattan flagship and will be successful at its upcoming Meatpacking District store as a result." Could we soon be living in an era of Pottery Barn-branded hotels, then? TBD.