Major retail chains are collapsing all over the place. Consider this headline from The New York Times: “Retail Chains Abandon Manhattan: ‘It’s Unsustainable’.” Large retail chains have invaded Manhattan over the last few decades and displaced many small retailers. Now, due to Coronavirus, there is simply not enough foot traffic to compete.
Its not just Manhattan. How about the malls in your town? Steinmart has just filed for Chapter 11 bankruptcy joining Sears, Pier 1, Shopko, Freds, Claires and Gymboree. Malls are struggling so badly that Amazon is looking to convert mall anchor tenant locations into fulfillment centers.
As bleak as this may sound, it is actually could be good news for small retailers who survive the pandemic. There are going to be a lot of empty storefronts around the country, and rents are coming down. And don’t expect large chains to jump back in. They will be licking their wounds, for the next few years.
Creative destruction is a frightening and awesome thing to watch in real-time, and it is happening now. The good news, there will be a renewal. Independent retailers, if they are bold and smart, are going to benefit the most.
One has to first consider why large retailers are not rebuilding and leaving NYC. You mentioned “foot traffic”. Specialty retailers should remain out of bigger cities–especially Manhattan and other cities that are not maintaining law and order. Specialty retailers when looted or burned out are VERY UNLIKELY to survive a total inventory loss. I do hope that specialty retailers in large numbers will survive and grow.