Saks Fifth Avenue will close its men’s store at Manhattan’s Brookfield Place on Jan. 31. If that sounds like déjà vu, it’s probably because the retailer made the same announcement about its Brookfield Place 86,000-square-foot, three-level women’s store in January 2019, after only two years in operation.
However, Saks isn’t saying goodbye to the urban shopping mall in lower Manhattan. The retailer said it will hold onto the 16,000-square-foot space for a new concept it’s developing. Details about the upcoming store were not revealed.
“The Brookfield Place Saks Fifth Avenue men’s store will close on Jan. 31,” said the retailer’s parent, Hudson’s Bay Co. Inc. “With this branch location, we determined that our customers’ preferred shopping experience is a combination of our digital channels and our iconic Fifth Avenue flagship, where we have created an unparalleled luxury shopping destination.”
The Saks Fifth Avenue flagship is about 70 percent renovated, according to store executives. A multiyear renovation project is running above the original $250 million budget, although not by a huge amount.
“The decision to close this location was not easy, and we intend to transfer as many sales associates to new roles as possible. HBC is planning to retain the space and is in the process of developing plans for its future use, which we expect to announce in the coming months,” the company said.
“Brookfield Place New York continues to be one of the best-performing retail centers in the country,” said a spokesman for Brookfield Properties. “The strong desire among brands to locate at Brookfield Place, which is fully leased, enables us to proactively curate the right mix of experiential amenities, food and beverage offerings and apparel shops. With several exciting openings planned for the coming months, we’re creating an enhanced, and even higher-performing complex, and we’re glad that HBC is retaining the space and developing plans for its future use.”
According to sources, the Saks men’s store, which was considered a branch, was an opportunistic play to try a new retail format for male consumers. The retailer’s men’s business has reportedly been a strongly performing category and Saks sees opportunities for growth.
Real estate sources said Saks was given “sweetheart deals” of no rent or a percentage of rent for the women’s and men’s stores since HBC leased 400,000 square feet at Brookfield Place for its U.S. headquarters. The relationship between HBC and Brookfield facilitated the entry and exit of Saks’ women’s store from the center. The majority of the retail tenants have 10-year leases.
Renovated to the tune of $250 million, Brookfield Place in 2014 opened with a slew of luxury tenants such as Hermès, Gucci, Ermenegildo Zegna, Salvatore Ferragamo, Bottega Veneta and Louis Vuitton. However, Brookfield Place has operated in the shadow of the larger Westfield World Trade Center, which bowed in 2016 with 125 stores.
Industry experts have questioned whether there are enough luxury customers to support Brookfield Place’s tony tenants. “From a retail point of view, the residential density and the seasonality of the affluent residential market, which sees residents leaving during the summer and holidays, isn’t there. There wasn’t enough density in Battery Park City and TriBeCa,” said Stephen Stephanou, principal of Crown Realty Services.
There have been reports that Paul Smith, a tenant on the ground floor, and Monica & Andy, on the second level, will close. However, the Brookfield Place spokesman pointed to recent and upcoming openings of Convene, Shakespeare & Co., Sant Ambroeus and Adam Grooming.
“Some of the brands that were initial tenants at Brookfield Place have taken a different direction,” Stephanou said. “Not unlike other centers, including high-performing centers, we see retailers, who are becoming more reliant on their web businesses, making an adjustment or right-sizing their retail fleet. Experiential entertainment concepts and food and beverage seem to be the uses that are getting the most traction with customers.”