Downtown Business Report: RETAIL 2020
A new decade and a brand-new year, another chance at getting it right. By all accounts, we are off to a good start. Financial indicators are strong and consumer confidence remains high. However, a more nuanced look at the retail sector continues to show distress and cause for concern.
Taking into account today’s environment where going out of business signs occupy many commercial spaces, one wonders can retailers really get it right in 2020 or are they doomed for failure?
In total, 2019 saw the closing of 9,300 stores nationwide and while that might be a staggering number, it by no means indicates that the trend has bottomed. 2020 has already seen plenty of activity with just a couple of weeks underway. For instance, Pier 1 Imports, Macy’s, Chicos, Express, Bed Bath & Beyond and many others are slated to close hundreds of stores this year.
If these are the national trends, it begs the question of what is happening locally in Miami? The short answer is a lot and it is not pretty.
The Falls Mall
The year started with Bloomingdale’s closing in a matter of one week from announcement day to the closing date. A 35-year-old fashion institution gone overnight. While this might have been a long time coming, many local shoppers were surprised at such a rapid turnaround time.
Bayside Market Place
The Gap stores are set to close in the coming days and bid adieu (all three stand-alone shops: baby, kids, and adults). This, however, is less surprising as it is common knowledge that Gap’s overall company strategy is to close half of its stores through 2020. While the closure might come as no surprise, it is still demoralizing as the apparel store mix in a prominent location such as Bayside Marketplace shifts dramatically with the loss of an anchor store. The Gap also made headlines last week with a surprising move when it decided to call off its divorce from Old Navy. With the brands’ president stepping down, softer business results than expected and the costs & complexity associated with the spin-off, the decision seems to make sense. The other major remaining apparel store at this property, Express just announced today that it will close 100 stores by 2022. Will this location make the cut?
The good news nowadays is that Flagler is getting its 24-million-dollar renovation and it could not come at a better time. This major and historic Miami artery needs some TLC. 2019 saw the closing of Payless Shoes, one of the few remaining anchor stores in the area.
In contradistinction, Ross Dress For Less signed a lease to take over part of the historic Macy’s building in October 2019. Though no official date has been released, the signs outside the building indicate that Q1 will see this move come to fruition. The opening of the store will bring much-needed foot traffic on what is a neglected side of Flagler. Given its success in 2019 with the opening of 100 stores Ross Dress For Less has found the magic formula and it is thriving in what many have now labeled the “age of the retail apocalypse”.
In other news, The Children’s Place closed this year and with it the last retail chain store on Flagler. The retailer is working towards closing 300 stores by 2020.
Kirk’s Jewels moved to the upscale Brickell City Center (after calling downtown home for 72 years) with the hopes that higher foot traffic and longer operating hours will move their business in the right direction. With this move, Flagler is now a vacant street, completely devoid of mass-market retailers. We hope that this serves as a blank canvas for Moishe Mana and his team to work their magic. The business magnate has invested over $350M in downtown properties. Recently released Mana plans call for a Spice and Food Hall, venture capital firms, hotels, tech, and start-up hubs to take over in the coming years. With cautious optimism, we await these projects to break ground come March 2020.
The much-anticipated project occupying nearly 30 acres is our next stop. Aside from adding to the ever-changing Miami skyline, as previously reported, this project will also add 300k sq ft of retail space. With Bloomingdale’s and Macy’s no longer on the list of possible anchor stores, who will be the chosen ones to serve our community? We reached out to the Miami Worldcenter team and they are very bullish on this project’s success.
According to Nitin Motwani, managing partner of Miami Worldcenter Associates, the Miami Worldcenter will be a local shopping hub as it would cater to residents and tourists alike. Think office workers, residents, commuters, event attendees and tourists all part of the consumer target market. MWC’s pedestrian-only promenade, central location, green spaces, wide sidewalks, fountains will make it an appealing destination for shoppers everywhere.
Rendition, courtesy of Miami Worldcenter. An update: the Paramount Miami Worldcenter is over 90% sold to buyers from around the world. Caoba, the first building to be delivered, has more than 80% of its units leased and Citizen M, a 351 room hotel, is expected to be completed this year.
Focusing on retail, from the 300 sq ft of the assigned space, 150,000 square feet have been delivered and another 50,000 are under construction. Later this year they plan to break ground on the project’s remaining 100,000 square feet of retail, with a grand opening estimated for 2021. Mr. Motwani noted that these spaces will be activated by national and local high-street retail stores along with a variety of food, beverage, and entertainment uses. The team has been tightlipped on an actual retailer list, but they did say that a big announcement is coming soon.
In this survival of the fittest environment, Miami still has a chance to capitalize on its many strengths. Its location, population mix, vicinity to Latin America and tourism are all aspects that can entice retailers who thrive by being immune to e-commerce competition and demonstrate abundant in-store shopping vitality.
With a few focused and intelligent initiatives, 2020 can be the year when our Miami and especially our Downtown graduates to a more sophisticated and refined area that serves our needs in ways that were unanticipated.