Has The Manhattan Bubble Burst?

by | Aug 18, 2020

American chains, both retail and restaurants, are closing their stores in Manhattan, the iconic area of New York City, due to the struggle to entice customers back to the area since the pandemic hit the city in March.

When you think of Manhattan, NYC, you think of busy streets, hoards of tourists visiting retail units, and eateries. Fast-forward to August 2020, and the scenario is vastly different.

Even though the city has managed to control the outbreak of Covid, with many slowly starting to return, the damage has already been done.
In the heart of Manhattan, fashion chains such as J.C Penny and Kate Spade have shut branches for good. Many large brands with prime locations in Manhattan have continued to keep their NYC stores closed even though they have re-opened other stores in different states.

So, why has the Manhattan bubble burst? Previously brands have set up flagship stores on the streets of Manhattan, paying high rent fees in return for large footfalls from tourists, office workers, and wealthy residents. However, with travel restrictions still in place, offices preferring to keep employees working from home and wealthy residents leaving the city for their second homes in the country, Manhattan looks nothing like it did at the beginning of 2020.
Many brands are saying that keeping their stores open in Manhattan is simply unsustainable.

The state of retail in Manhattan mirrors the current situation faced in London. Iconic department store Selfridges has announced that it will be cutting 450 jobs as sales tumble, as it suffers ‘toughest year in recent history.’ Harrod is also set to make 700 people redundant, blaming social distancing measures and a sharp drop in tourism.

Due to the pandemic, we are witnessing the largest shake-in retail for years. Brands are now reviewing store locations with cost-cutting measures and putting more emphasis on their online presence.

Tell us how your beauty brand is doing and what measures you are taking to work successfully through Covid.

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