Riley Group Inc.

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High Street Flagship Stores Contracting

In a recent article published by the Business of Fashion, rents on major high streets in New York and Hong Kong are dropping.  On New York's Fifth Ave rents dropped from $3500 to $3000 a square foot and vacancies are up to 15.9% from 10% earlier this year.  Brands are pushing back on high rents and looking for ways to cut budgets.  While they are not abandoning the thought of a flagship store they are looking for less expensive "cooler" locations.  

This is yet another sign of pressure on the retail store model needing to become cheaper and more nimble for brands and for consumers.  Again this makes me wonder, with the pressure of online sales on retail stores, are developers, brands and store designers reacting fast enough with solutions that move product in the real world in different ways? 

(read the full article:  "Why retail flagships are no longer hot properties," BOF, Nov 18, 2017)