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competition from chain stores

Vacant storefronts are becoming more noticeable in the capital of consumption, as small retailers are being pushed out by wealthy investors

Vacant retail space in the New York neighborhood of Chelsea. Thousands of small retailers have been replaced by national chains.
Vacant retail space in the New York neighborhood of Chelsea. Thousands of small retailers have been replaced by national chains. Photograph: Richard Levine/Corbis via Getty Images

Walk down almost any major New York street – say Fifth Avenue near Trump Tower, or Madison Avenue from midtown to the Upper East Side. Perhaps venture down Canal Street, or into the West Village around Bleecker, and some of the most expensive retail areas in the world are blitzed with vacant storefronts.

The famed Lincoln Plaza Cinemas on the Upper West Side announced earlier this week that it is closing next month. A blow to the city’s cinephiles, certainly, but also a sign of the effects that rapid gentrification, coupled with technological innovation, are having on the city.

Over the past several years, thousands of small retailers have closed, replaced by national chains. When they, too, fail, the stores lie vacant, and landlords, often institutional investors, are unwilling to drop rents.

A recent survey by New York councilmember Helen Rosenthal found 12% of stores on one stretch of the Upper West Side is unoccupied and ‘for lease’. The picture is repeated nationally. In October, the US surpassed the previous record for store closings, set after the 2008 financial crisis.

The common refrain is that the devastation is the product of a profound shift in consumption to online, with Amazon frequently identified as the leading culprit. But this is maybe an over-simplification.

“It’s not Amazon, it’s rent,” says Jeremiah Moss, author of the website and book Vanishing New York. “Over the decades, small businesses weathered the New York of the 70s with it near-bankruptcy and high crime. Businesses could survive the internet, but they need a reasonable rent to do that.”

Part of the problem is the changing make-up of New York landlords. Many are no longer mom-and-pop operations, but institutional investors and hedge funds that are unwilling to drop rents to match retail conditions. “They are running small businesses out of the city and replacing them with chain stores and temporary luxury businesses,” says Moss.

In addition, he says, banks will devalue a property if it’s occupied by a small business, and increase it for a chain store. “There’s benefit to waiting for chain stores. If you are a hedge fund manager running a portfolio you leave it empty and take a write-off.”

New York is famously a city of what author EB White called “tiny neighborhood units” is his classic 1949 essay Here is New York. White observed “that many a New Yorker spends a lifetime within the confines of an area smaller than a country village”.

In Vanishing New York, Moss writes of the toll the evisceration of distinct neighborhoods through real estate over-pricing has on the city.

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from dna.info:

111-Year-Old East Village Art Supply Shop Closing by End of Summer

By Allegra Hobbs | July 12, 2016 12:40pm

 New York Central Art Supply, which has sold art supplies at 62 Third Ave. since 1905, will close within the coming months.

New York Central Art Supply, which has sold art supplies at 62 Third Ave. since 1905, will close within the coming months. View Full Caption

New York Central Art Supply

EAST VILLAGE — A 111-year-old art supply store will shutter for good by the end of the summer as its beloved Third Avenue storefront — once patronized by such artists as Andy Warhol and Willem de Kooning — changes ownership, the owners announced on Monday.

New York Central Art Supply will vacate the 62 Third Ave. storefront by the end of September, according Doug Steinberg, whose family has owned the shop since its launch in 1905 — and while the sale of the building has been the impetus for the closure, he said, the business has for years been struggling to stay afloat as the way artists shop for supplies has changed significantly.

“The building being sold just puts a hard date on what was an inevitability — even if the building wasn’t being sold, the business was still not healthy enough to survive,” he said.

“People shop online, people shop at chain stores — we’re just seeing the volume of traffic that comes into the store way down from what it used to be.”

The shop last year hosted a “warehouse sale” in preparation for restructuring the business to compete with such art supply giants as Blick Art Materials, Steinberg said at the time, dispelling rumors the shop would be closing.

The store must be vacated by the end of September, said Steinberg, and it will hold on for as long as the remaining inventory holds out. Until the closure, shoppers can stock up on art supplies on the cheap, with 20 to 50-percent discounts storewide, said Steinberg.

Steinberg first announced the closure on Monday in a letter posted to the shop’s website.

“Our amazing customers over the course of the last 111 years, from fledgling students to modern masters, have made this business unique and rewarding for each of [us] here at Central over the years,” reads the letter, signed ‘The Steinberg Family, The Norins Family & the entire New York Central team.’

Meanwhile, the owners will be “entertaining any offers to acquire our inventory and intellectual property,” according to the letter — and Steinberg confirmed it is unlikely there will be another incarnation of the supply shop, noting renting would be too expensive and it would be difficult to keep enough merchandise to run an online store.

“There really are no alternatives,” he said.

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