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Seen & Heard: Three Store Closings at the World Trade Center Mall
••• Good news: Doughnut Plant is opening in the World Trade Center mall, according to the store directory. It’s on the top level, where the Italian food store Pulia was supposed to go. And another retailer you might know from Soho is coming to the Oculus, but that’s embargoed till next week.
••• Bad news: Three stores have closed. The Penhaligon’s store directly below Doughnut Plant; Links of London; and Folli Follie jewelry store. Hope that guys gets out.
••• There were staffers inside the Dig Inn on Greenwich yesterday, so maybe it’s finally getting ready to open.
••• The new seven-story, single-family home at 512 Greenwich has been fully unveiled. Winka Dubbeldam is the architect.
••• “Billions” is back in the Hudson/Vestry area today.
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It’s surprising (to my real estate naivete) why it’s so difficult to sustain a business in the WTC mall. Are the rents impossible? Not enough foot traffic in certain corridors?
Doughnut Plant – yes!
Now I’m also hoping for Dun-Well Doughnuts to open a spot near us.
It’s retail in general. Let’s say your rent was only $1000/mo. You need a minimum of 2 people, running very long shifts 7 days a week in order to cover that reasonably. You need to sell enough product to cover the $1000 + payroll every month. Then you need insurance. And you don’t get the goods for free, so you’re paying for the inventory you floor. Subtract shrink (theft), the need for probably additional help during busy holiday periods, you will probably need the equivalent of 1 additional person during those times.
Now increase that rent to 5x, 10x, 25x. At those numbers (and I’m guessing – I have no idea what WTC rent is), it makes a pretty bold assumption that there’s enough people that are willing to buy stuff all the time to make it cover expenses. How much jewelry can you realistically sell? You’ll sell a lot during V-day and around the holidays, but then it’s probably on a trickle of sales in-between.
It’s tough but the economics of mall retail haven’t made sense in a while, esp. in the online economy. You have to sell a lot of product to just sustain… for you to be able to make more money year over year is pretty rare unless you’re a majorly hyped of-the-moment brand (e.g. Apple, etc.)
Thank you for this. So perhaps it’s the same brutal economic reality that’s leading to so many empty storefronts in TriBeCa, SoHo, etc. Or is it something particularly difficult about keeping a business going in the WTC?
You’re thinking about it the right way. Although empty storefronts are also a result of landlords waiting for windfall tenants willing to pay 10x rents over prior tenants, or waiting for some developer who’s going to come in and buy a block of empty property as a package.
If I was charging 12k a year in rent, and think someone will pay 48k a year in rent down the road, I as a landlord would probably just raise the rent, and force the tenant to leave. Further, I would not be in a rush to fill that spot for a couple years, betting that my 48k a year tenant will come.
Obviously it’s a dirty game. Part of the problem is the city doesn’t penalize landlords for empty storefronts and the negative economic impact it brings to a neighborhood so only the residents get hurt here, while landlords wait for the right tenant and payday.
Curious where this news about Doughnut Plant comes from because it’s not on the WTC Westfield website, not on the Doughnut Plant site. When asked at the Oculus about it, no one who worked at the info office knew.
What’s the source here?
Thanks.
It’s on the store directory at the mall.
I work at WTC so I went to check. Didn’t see it.
I added two photos of the directory, which I think was right where the Oculus meets the hallways leading to 4WTC. Not sure which level. (The asterisk indicates “coming soon.”)
Alee,
You are incorrect. Landlords just don’t arbitralily raise their rents to obscene levels. Nor is there a benefit to keep stores vacant for four years. Rental missed is never recouped.
Tell us, when did you shop in WTC last to support the retailers, and what did you buy?
Support local vendors.
This is unnecessarily accusatory. What does Alee’s shopping history have to do with the explanation of retail economics that was provided? Get a life, Craig.
Overly simplistic, but…
(1k/mo) 12k per year x 5 years = 60k
(4k/mo) 48k per year x 5 years = 240k
After the lease at 1k/mo is over, I could raise the rent, leave my property vacant and just pay whatever taxes and fees I needed to, waiting for my 4k/mo tenant. In this example, I could leave it vacant for 5 years (forgoing 60k of income) for that 4k/mo tenant where I still come ahead 18 mo into the lease vs. if I had just continued the existing tenant. Technically you could let it go empty for 10 yrs and still make a profit.
For the record I’m not a landlord. And I shop local.
I always thought that the whole idea of a shopping mall in that location was pretty crazy. Who visits the Oculus?? Commuters rushing for their PATH or subway train, some curious tourists who want to see Calatrava’s folly but dedicated shoppers at the high end?? I seriously doubt that the rich, famous and wealthy will come downtown this far to buy their stuff. It always seemed to me that this was a true ‘white elephant’. But I am certainly not an expert. As for shopping locally, how many i-Phones, Montblanc pens (better at the Pen Hospital), or designer clothes can one living around here really consume?
Having grown up in the mall culture of the suburbs, I can see the virtue of the Oculus and do shop there, albeit not super frequently. I think it’s the combination of stores that is odd. But, when I need to be efficient, or the weather is hot, cold, snowy or rainy, it’s great to go there and be able to hit a Sephora, a Papyrus, pick up a gift at Sugarfina, visit the Genius Bar and grab a quick bite to eat in an hour or so. I did a nice bit of holiday shopping at the kiosks on the main floor last year and hope to do so again this year. A Muji or a Uniqlo would be fun additions — something with broader inventory and appeal. It’s not about attracting the rich, famous and wealthy. It’s about attracting other people who live and work in the area and, yes, visitors, who will shop and spend on things they like and can afford.
Unless you’re talking about a walmart, target or a Kohl’s, not sure which stores you mean. This place was obviously not built for the people of New Jersey nor for the working people of New York. It’s meant to be a tourist trap and a place where high end brands can show off their wares for advertising. No one is making any money in this place. That’s why it really is a boondogle, a white elephant and i suspect will soon become like every other mall in America that no one can afford: an empty, pathetic monument to government waste – a rich man’s trick gone wrong.