NYC’s Phase Two Sees Retailers Crawling Back9 min read
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Tepid at best and hardly surprising.
That’s the consensus from retail executives on how stores fared during week one of New York City’s phase two of restarting its economy.
The slow turnout to shopping inside stores was expected given the ongoing fears of COVID-19 and the resulting exodus of many city dwellers to the suburbs and upstate for less dense surroundings and open areas. The lack of tourism since mid-March and last weekend’s heat — peaking at 90 degrees with humidity — further contributed to the limited business.
In several cases, retailers appeared stuck in phase one. That allowed for curbside and instore pickups beginning June 8, and manufacturing, wholesale trade, agriculture, landscaping, and construction were allowed to resume. Two weeks later, on June 22, phase two green-lighted in-store shopping as well as outdoor dining, and the reopenings of barber shops, hair salons and offices.
While some retail sources characterized last week as a “promising” start to getting people back into stores, they expressed resignation to what will be a very slow, gradual buildup of business, provided New York’s coronavirus case count doesn’t spike up. They had been more encouraged about their store reopenings in other parts of the country over the last several weeks, not considered epicenters at the time, though Arizona, Florida, Texas and other states this month are seeing cases of coronavirus on the rise.
Still, New York City retailers were heartened by the level of private appointment shopping and curbside pickups, and the outdoor dining witnessed along Madison, Fifth and other avenues and side streets. The outdoor dining brought some cheer and festivity back to the city.
As for what did sell, best-performing areas were luxury, athletic apparel and footwear, pajamas and loungewear, while dress up and career apparel and tailored clothing were weak.
Retailers are now hopeful for a more noticeable business pickup after the July 4 weekend when people might return to the city.
As of Sunday afternoon, many stores were still boarded up, including Brooks Brothers, Victoria’s Secret, Vans and Aldo. Uniqlo on 34th Street offered curbside pickup only. Foot traffic along 34th Street and Fifth Avenue, including Saks Fifth Avenue, was very light. Macy’s, Bloomingdale’s, Zara and Foot Locker seemed to draw more people than other stores in Manhattan, though there was no problem social distancing anywhere.
A Foot Locker spokeswoman described its New York City reopenings as “very positive, with our customers eager to be back shopping in our stores, while respectfully adhering to all the safety protocols we have in place. We are taking a thoughtful and prudent approach to reopening, guided by several factors including the current COVID-19 trend data, location of stores and important feedback and insight from our valued team members. We continue to monitor the situation daily and make decisions accordingly.”
“We were pleased with the first week despite having no international tourists i9n town and lots of customers have moved out of city to the Hamptons and upstate,” said one senior retail executive, who requested anonymity. “This will be a slow build back, but New York City is in a much better place today than it was two months ago.”
Tommy Bahama reopened its New York City flagship on Fifth Avenue on Sunday with limited hours and staff, according to Doug Wood, chief executive officer. However, the company’s restaurant, which is adjacent, has not opened its doors and may not do so until the fourth quarter. “The economies of takeout don’t work for us,” he said.
But Wood was insistent that the retail store get back to business. “Our strategy is that stores need to get back open even though we have very low expectation for business. We know it’ll take awhile before people come back to shopping.”
He said the New York store managed “barely any business” so far, and saw mostly returning customers who stopped by to say they were happy the store reopened. “That proves our guests are still there and interacting with the brand.”
Wood said overall, about 90 percent of Tommy Bahama’s store fleet has reopened and some markets are performing better than others, especially those in areas that attract vacationers who can drive to the locations. According to Wood, seasonal goods such as shorts, polo shirts, T-shirts and upscale casual pieces, and beach chairs, are selling best.
Dana Glaeser, owner and creative director of Slightly Alabama leather goods, reopened his Bleecker Street store last Tuesday. Because the unit is also the brand’s headquarters and studio, Glaeser has been in the store every day since it was forced to close in March. He even moved the studio to the front of the store so passersby could see the creative process.
Until phase two, he kept the doors locked. “We didn’t do curbside pickup because we’re not really that kind of brand,” he said, adding that orders were fulfilled online. “We’ve probably seen 10 people, or couples, walk in in the past week,” he said. “And we had maybe six transactions from locals who know who we are and either wanted to support us or saw something on our web site they wanted. There were no people walking by discovering the brand, and no tourists.” He said his goal is to make it through December and then reassess the situation. He’s not expecting much of a pickup until fall.
Dennis Basso reopened his Madison Avenue store Monday by-appointment only, with only one client allowed in to meet the one sales associate. “That was the perfect baby step to slowly integrate back into the real world but by following all the correct and necessary precautions. Hopefully, by the end of July we will be open a little bit more. We’re following all the protocols — with all employees and clients wearing masks,” Basso said. “At a certain point, you need to begin. You have to take a step forward.”
“We had a merchants’ meeting, one of our Madison Avenue ‘mixers,’ on Thursday afternoon and stores told me they had some very nice sales from clients,” said Matthew Bauer, president of the Madison Avenue Business Improvement District. “People were happy to see the stores open again and the merchants were seeing a lot of businesses opening up with private appointments.”
Bauer said that stores reopened on various days last week, some at the end of the week. “There will be another wave of openings next week,” following the July 4 weekend, he added. “More people will be coming back to work then.”
Along Madison, “The restaurants are very busy and more and more are doing curbside dining. It gives the street more of a festive feel. People want to come out and be with people. Overall last week there was a greater sense of life and vibrancy,” he said.
On Fifth Avenue last week, “There was definitely an energy on the avenue that we haven’t seen since pre-COVID 19,” said Jerome Barth, president of the Fifth Avenue Association. “It was really exciting to see the stores open again. The outdoor dining is also encouraging,” Barth added, citing Benoit, Avra, and Nobu as among the restaurants offering outdoor dining.
Alan Martin, head of retail for Faherty, said the company’s two city stores on Bleecker and Prince Streets “are exceeding our very low-goal expectations,” and that traffic is running at about 25 percent of what it was last year at this time
“There are not a lot of tourists and the locals are barely creeping out,” he said. “They’re more excited to just stop in and talk,” and Faherty is happy to indulge them with some human interaction. And while sales are far from robust, they are buying a few miscellaneous things such as swimwear, T-shirts and button-downs, he said.
At Saks Fifth Avenue, “Since reopening the doors to our New York flagship (last Wednesday), we’ve seen a positive response from our customers who are happy to be back in the store. Similar to what we’ve experienced in other markets, men’s, handbags and shoes continue to be top-performing categories,” a spokeswoman said.
A Tiffany spokesperson declined to speak about traffic patterns or sales, but said the company’s five New York City stores opened last Wednesday. An “ambassador” posted at each of the store’s front doors greets customers and asks what they’re specifically shopping for. At Tiffany’s temporary ‘Flagship Next Door’ on 57th Street, customers are then escorted through the location’s labyrinth of escalators and paired with a salesperson, who shows them product, facilitates transactions and escorts them out of the store. At present, there is no “unattended browsing” allowed at Tiffany’s New York City locations.
The temporary flagship has a daily sales staff of about 50, meaning that 50 customers can be in the store at any given time. If a salesperson is not readily available, shoppers queue with markers set six feet apart. Product tried on by customers is disinfected immediately afterward.
Sid Keswani, America’s president for the Pandora jewelry chain, said Pandora stores opened last week, most with curbside pickup, some with limited hours for in-store shopping. The company is “cautiously” reopening store, some of which experienced looting. “In SoHo we just assessed the damage — it wasn’t significant so we think it will open in the next couple of months. I think honestly we are not rushing to open that store. We have other priorities to deal with. It’s hard to get labor right now.
“In general we are very pleased with the stores that are open,” Keswani said. “We are seeing better results than expected… The customers coming in are really motivated to buy. People want something personal right now and our jewelry seems to be resonating well. The graduation charm is our best-selling charm in the last 30 days in spite of that fact that not many real graduations happened, but they still occurred virtually.”
Fifty-three percent of the fashion retailers in NoHo have reopened — most cautiously, according to Cordelia Persen, executive director of the NoHo Business Improvement District. “It’s not as though people are running up our blocks and are standing in line, which I have seen in other neighborhoods. But stores are opening and they are trying to test out ways of doing business.”
Some higher-end boutiques like Anna Sheffield are doing appointments to focus on existing clients. The company started with four appointments a day. In between, virtual appointments are held.
Hatch, a label that specializes in maternity wear, open, but it keeps the door locked to let one customer in at a time, Persen said.
Journeys, which was “badly looted on multiple nights,” has had a steady flow of customers despite plywood still covering the exterior, Persen said.
“I just think this is going to be a really slow summer. Big corporate people are saying they’re definitely not coming back until the end of the summer and many not until the end of the year. It’s going to be a really slow buildup,” Persen said.
In the Garment District, trimming companies and wholesalers reopened last week, and workers can once again be seen rolling racks of clothing down the streets, according to Barbara Blair, president of the Garment District Alliance. “Things are starting to reopen. Things are happily beginning to come back to life,” she said.
As of last week, the average daily foot traffic in the neighborhood was around 190,000 — a 76 percent decline from 2019. While restaurants are opening to outside seating, retail in the district is largely still closed, Blair said, with the exception of essential retail.
Olive & Bette’s founder Stacey Pecor has closed her four New York City stores, office and warehouse indefinitely. She moved merchandise to her house and storage facilities, while trying to return product to vendors. Asked about reopening stores, she said, “It just didn’t make sense right now. Now is the time to reinvent my business. We’re doing social selling — selling live on Facebook and Instagram and holding virtual appointments. We launched an e-commerce site and we’re opening a pop-up in East Hampton for at least two months,” she said. “Retail was struggling before this pandemic. When New York was shut down, we didn’t have an option but to reinvent ourselves.”
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