Add another vacancy to Main Street — and it’s a big one.
Banana Republic is closing January 10.
That’s all a store manager would say. She’s not allowed to give her name, she says — “company policy.”
What’s the reason? “The company decided to close us.” In 2017, Gap Inc. — the parent company — announced plans to shut about 200 “under-performing” Gap and Banana Republic stores.
Will they reopen elsewhere? “I’m not sure.”
How long have they been in the iconic storefront that for decades housed Klein’s Department store? “I’m not allowed to give that information out.”
An “06880” reader says a sales clerk told her their rent was tripled.
But that’s just the word on the (soon-to-be-empty #44 Main) Street.
Banana Republic on Main Street.
In regards to the possibility of the rent being tripled, “ when is enough enough?” Do we have to lose all of the retailers before anyone sees what has happened to our town? Of course just driving up and down Post Road has quite a story to tell. No fairy tale, just ugliness!
Banana Republic has been in the old Klein’s building for close to 20 years. The Klein leased it to Banana for approx. $900,000 / year.
Who will move in now at a crazy rent is anybody’s guess, considering the retail environment.
The Kleins still own the building? That is fascinating because it means they can, in theory, charge a much lower rent and seemingly make a nice profit. I had assumed it was some entity that bought at the peak of the commercial market and had a sizable mortgage to pay. (I had been told that was the situation with a couple of Main St buildings.)
On a related note about some commercial owners having bought at the wrong time: The NY Times had an article about the fact that the fabled Chrysler Building sold for $150 million this year—which was roughly $80 million less than what the highest priced individual residential condo apartment sold for! The Chrysler Bldg sellers had paid $800 million for the property in 2008—so they took an enormous loss. I wonder if there are commercial landlords in Westport who are in a similar predicament.
Current owners purchased the building for 22,500,000 in 2015. $900,000 is barely a 4% return. and only if – NNN (Tenant pays all expenses in addition to rent)
Thanks for the info. I was surprised to hear the Klein family supposedly still owned it.
Wow! Were the Kleins the sellers in 2015, or was there another owner in between? If the Kleins got the windfall, good for them; they worked hard for a long, long time for it.
Yes Kenny and his sister. He has some great stories working for his dad Stanley. They had the original property across the street too.
I dont see any Gap stores on the list for SoNo. Wonder what could replace it in such a large space.
https://www.thesonocollection.com/en/directory/
Probably opening in the SoNo Collection Mall. (At least for a while.)
Another vacant space. There are so many that it really isn’t fun to shop downtown any more. Landlords should reread the story of the “Golden Goose” before it is too late. There are some who would say it is already too late.
Greed! That’s what this is about. This ain’t NYC, and look at what’s been going on there. Unless these landlords need a write off for their booming real estate biz someplace else, its just stupid and greedy biz practice, and scars this town. It’s becoming ridiculous here! Truly! Anyone who’s been here for a while can see it.
You apparently released far more classified information than company policy allows.
Greedy landlords are turning Wesport into a Ghost Town .. Take a drive trough downtown , and up & down the post road … The vacancies are kind of Scary …
Retail vacancies around here remind me of the canary in the coal mine. Those of us who own homes here need to beware. First the stores disappear. Then home sales drop and equity evaporates. And we’re not living in a very economically healthy or robust state from what I can tell. Fairfield County may be one of the few bright spots in CT, and that light is flickering. Happy New Year folks!
Commercial Mortgages don’t allow theLandlords to charge below Market rent. I don’t doubt that some greed may be involved, but in most cases it’s just investors paying far too much for buildings that could never return a profit on the purchase price. “Highly Leveraged” May be at work here along with the change in the retail market. Then again, Banana Republic , like many other retailers , relied on high end consumers paying $90 for a pair of $20 pants, etc…..
Seth: re: “high end consumers paying $90 for a pair of $20 pants,” anyone who’s shopped at a Banana in recent years knows that a full-price purchase is an extreme rarity. Those $90 pants are usually marked down to $59 or less Today’s chainstore reality is the Perpetual Sale, and it’s a big reason the midrange chains like Banana can’t afford ever-increasing rents.
I agree , that’s part of the marketing , but in the end , they’re still marking up a normal shirt 500% and giving you 30 off on sale. I went to Banana this afternoon. An average quality flannel shirt had a list of $98.50, so at half price it was still double a normal retail. The merchandise was mediocre and expensive, that’s really the bottom line. It’s a failure in management more than ani other factor.
“Mediocre and expensive” is correct, at it pertains to chainstore clothing, but it’s not true that you can sell a quality shirt or pair of pants for $20 or $25 and stay in business. That is the price point of the lowest quality clothing, or perhaps a midrange garment in an unpopular style or size, relegating it to an off-price outlet like Marshall’s.
But everyone knows they also send out tons of rewards codes and 40% off coupons, so you are only gonna pay $20-$30, which depending on the shirt, is perfectly normal. They can’t move away from the sale model, because they get penalized by the market for doing this. (Look what happened to JC Penny, where the CEO tried to move to every day lower pricing, and their sales tanked, and homeboy was out of a job a quarter or two later.) The problem for everyone in this retail model is that you can go to Costco and get a decent quality good looking shirt for $16 every single time. Blame consumer psychology and the demise of the formal business culture, where tailored clothing isn’t the norm anymore, just as much.
Sad. Has it only been 20 years? When Banana 1st opened, it took over the former Rachna of India/Bundles space which I think was to the right of Klein’s, heading north. Bundles closed in 1983-84 due to huge rent increase & relocated to the Chapel Square Mall near Yale, but couldn’t make a go there during that time. Banana was thrilled to get our old Bundles space because of the huge basement, we heard from upper management. I can’t tell from the photo if Banana expanded 20 years ago or just moved over to the Klein’s store space. It’s sad but interesting to me to see how downtowns in Ridgefield & New Canaan can be vibrant & successful, & a town like Bethel or even downtown Danbury can become revitalized & attractive to customers, pedestrians etc. I think what used to make downtown so great & exciting was the variety of shops- something for almost everyone. It will be hard for such a wealthy town to obtain any revitalization $, but that’s what the center needs: revitalization, most can agree. Some communities have built towns w/in towns where a variety of shops occupy the ground floor, & great housing occupies the 2nd, 3rd, 4th. Think of the views possible from the upper, ritzier units & imagine your young commuters w/disposable income & time spending it in town, w/many walkable destinations. Or active retirees enjoying in town living rather than yard work! Unfamiliar w/whether the infrastructure can handle this type of synergistic development or whether it’s been proposed & decried before in order to keep “that sort” outpriced from moving in, or the flooding issues..but it’s nice to dream. Happy New Year to All!
I left Westport in 1990 and Banana Republic was open back then for several years I think…
Yes, it was open beginning in ‘83-84 in the location I mentioned/former Rachna/Bundles, so you would have seen it in ‘90.
CAN ANYTHING BE DONE TO GET THE COMMERCIAL MORTGAGE HOLDERS TO AMEND THEIR TERMS VIS A VIS MINIMUM RENTS? IN THIS CRAZY ECONOMY CERTAINLY SOMETHING CAN BE DONE. MAYBE DMA CAN RESEARCH THIS
This certainly is not a pretty picture. Is what made Main Street a viable shopping experience was that there were many stores and people like to go from one store to another to do their shopping. This is the underpinning of shopping malls.
From an economic viewpoint the business’s that were on Main St. not only loss demand for their product but the margins evaporated to a point that they could not cover their fixed charges such as rent.
I hate to be a pessimist, especially since I live in Westport, but the retail scene in Westport now, is bad and probably will not get better. The world has truly changed. We have Amazon who can do what Main Street use to do and we have the SoNo Collection that truly offers a shopping experience.
The current landlords should start thinking out of the box in order to save their investment in real property. All I see on Main St. are buildings getting a makeover and/or new buildings hoping for a tenant. The same old practice gets the same old results.
The real bet here is who will step in and buy these building when they go up for sale. The price on the first building to sell will set the tone for future rents on Main St. and it won’t be pretty for the current owners.
This has been said before but the 2 big mistakes Westport made was moving the Y out of the center of town and not having any movie theaters – these were two BIG things that brought people to the downtown area.
I am not sure “Westport” the town had much control over either, but I certainly agree that they were a big pull for many residents to come down town.
I suspect we are seeing the beginning of a slow-speed crack up in retail that will lead us into the next recession. REITs and other investors paid ever-higher prices to purchase retail properties based on unrealistic expectation of how high the rents could go. Banks lent to these investors to provide leverage. What could happen? Even more vacancies as retailers fail to renew. Worse still: retailers who default on existing leases they can’t afford, leading to defaults on mortgages, leading to fire-sale selling by financial institutions. Just like we saw in residential real estate in 2008.
This is not about rent being tripled which is not the case nor is it about greedy Landlords which they are not. There have been many new leases signed for Main Street with fresher brands coming in to revitalize the street. Things change, brands come and go. Retail is changing but it is not dead and Main Street will be reborn and refreshed- sooner than you think. BTW, as a commercial broker, painting a negative picture does not help the cause! Let’s all put some energy into “selling” our awesome downtown Main Street!
Kathleen, I think virtually all of the readers of “06880” would love to see a vibrant Main Street; and, as exemplified by the efforts of Amy Kaplan with pop-up art exhibits publicized by Dan just several days ago, there are people trying to make downtown a place both local residents and out-of-towners would want to visit.
And, of course, the Westport Cinema Initiative has been trying to bring back a movie theatre downtown for a while.
New Canaan has both an indie bookshop reminiscent of The Remarkable and a movie theater in the heart of its downtown as well as an eclectic mix of shops including various mom & pop stores. I’m curious: are the rents a lot lower in New Canaan?
Also, from your experience as a commercial broker, what, if anything, from a P & Z perspective might be done to help the downtown commercial district become more attractive? Are there changes made elsewhere that we might consider adopting?
If you have been to New Canaan recently, you will notice similar vacancy issues. New Canaan has more “Mom and Pop” stores because it does not have the density that National retailers look for. The retail rents are lower for that reason. Our P&Z does a good job but we can always do better. There are some restrictions on exterior improvements that make it more difficult for tenants to “brand” their stores as they want but I think the P&Z has recognized they need to become a little more flexible and they have. Free and available parking is a huge bonus that we have to offer so Westport is well positioned. Landlords have made great concessions to land some great tenants and things are not as bad as people are saying. As for the cinema, I would like nothing mire than to have Fine Arts back! I do not think it is a viable business however. Darien Playhouse was just sold (by the company I work for).
Thanks for the follow up.
Looks like the Klein family made out very well since the new owners paid twice what the building is realistically worth. Now they’re stuck. It’s a very bad downward spiral thatIcant see being reversed anytime soon……
What will happen to the mural?
Wow! Is this because their lease renewals are a much too much increase or lack of biz? Main Street will go to a Macy’s type corp tenants or .: ….landlords look: get back to mom & pop stores which has kept “Down Town” exactly that. You don’t need the extreme rental profit $$ let’s bring Westport back. Otherwise it’s easier to go to a nearby Mall (there are 3 within 15 minutes) and shop the big stores I stopped visiting 15 years ago. (Even on line)
I used to go downtown everyday, 40 years ago. Then it started to be marketed as the Golden Mile. Most of the mom and pop stores sold out their leases to the big chains and here we are 40 years later with a mini mall with overpriced , name brand nonsense that can be bought online at discount. Putting in a movie theater is nonsense. If you haven’t noticed, movie theaters are dying everywhere. Retail is changing , no crystal ball, but I can say 5 more shoe / dress stores isn’t the answer. Maybe a Bowling alley!
The bottom line for the building owners is what return on their investment will they find to be tolerable. If their return is sub standard or there is no return at all, then why stay in business.Sure they can hold out for better times, if they do come, but it depends on how much financial pain they can take or want to take.
Does anyone think that next year at this time it will be any better. I sincerely doubt it.
Things aren’t looking good, that is for sure. I am curious what will happen. Will all these vacant spaces turn into residential apartments at NYC rents? Or will Westport/Fairfield county/CT implode?
New leases have been signed for a number of the spaces – Sundance, Splendid, 7 for All Mankind, Johnny Was , Lululemon expanding into the space next door!
Thats just a few of the nearly 100 vacant spaces reported on by Dan’s post a few weeks ago…hardly makes a dent! Still trying to figure out what the owners move is letting spaces sit empty? What is the financial play there?
Great comments. Accurate on all fronts. In early 2020 p&z will be doing a regulation review . We recognize the times are changing and we want your input (and others) in what we should do better or different. I anticipate we ll be focusing on permitted uses. Stay tuned to the town notices regarding the Regulation Review Subcommittee.
I’m referring to Kathleen’s comments. She is 100% accurate. There are a lot a great things coming due to the non stop work of many INVOLVED people. It you re not involved get involved. It’s your town.
It must be that property assessments are being done to determine property taxes, so building owners give outrageous numbers to any tenants whose leases are up for renewal. When the tenent leaves the building owner uses it as leverage to appeal to the town to not raise their property taxes because they have so many vacancies. Very typical “game” that’s played in the RE industry. Happens all the time when new assessments are being done. The unfortunate victims are the tenants whose leases are up for renewal, and the town residents who frequent Main Street or any other Westport establishments where the same sort of thing is happening.
Happy New Year Westport!!!!
As to the downtown merchant situation, I view Westport as a microcosm of the country. The economy is being driven (and ruined – slowly but surely) by three things, IMO: Unending wars (which are a root cause of international and domestic violence and a growing population of physically and mentally wounded warriors) consumer and international credit (which is out of control) and unbridled mass consumerism (Westporters may be able to afford this, at least in the short term, but it is driving the rest of the country off a cliff). The mass market stores have devoured Westport and like any scourge has moved on.
Downtown Westport (like the rest of the country) needs a business plan. It needs to have a strategy that is sustainable and tactics that can be executed. It will require sacrifice and pain. If Westport can not accept this fact, it is destined to become a small scale Bridgeport. And when it does, may the last person to exit turn out the lights.
Perhaps a coalition of town and state government and downtown merchants may be the answer. The 1st step, as in all things, is to acknowledge that there’s a problem and that the answer must come from within.
Having been a long term resident, I’ve watched the State descend into the current Socialist , Business hating, high Tax , high Spending status that it currently is. Westport is just a microcosm of the problem. Hartford has destroyed the States economy, we’re just seeing it down here a little later than up there.
Fred Cantor makes a good point (hi Fred!). Depending on who now owns this property, it may be a matter of just trying to make up the shortfall in the payments to the bank based on dramatically less estimated value of the property at present vs. when they bought it. But if it is still owned by the original owners then it’s a harder case to rationalize. Frankly in the nearly 30 years I’ve been in Westport I’ve seen the Post Road in Fairfield go from unimpressive to really impressive. Surpassing, IMHO, Westport in the variety of interesting shops and quality restaurants. The Downtown Merchants Association here is now really the Downtown Real Estate Owners Association and their goals are not exactly aligned the way they were when they were actually both the shopkeepers and the property owners.
Apt comment. Fairfield does have a lot of things going for it that Westport doesn’t; among them two universities, and a much bigger retail district, so that rents were never bid up as high as here.
But, they also have a major real estate owner, the Klebans, with a vision that’s, I believe, superior to that of their Westport counterparts. Rather than simply luxury fashion brands you’d find in any “Galleria,” their development — encompassing Brick Walk and the former Fairfield Store property — is a mix of national chains, independent shops and an impressive collection of restaurants.
In addition, medical and financial offices are located there, meaning you can take care of necessary business before or after your shopping or dining excursion, without having to drive elsewhere.
Yes, this is what I meant by the new “ideal” town w/in a town. Walkable opportunities combining mixed uses along w/a residential component. If you build it, they will come 😃
Credit: Field of Dreams 😉
I note a different decline of Main Street. About 20 years ago there was nothing left there that would appeal to men. No more hardware stores, drugstores, no books, stationery, cameras, or music. It was mostly women’s clothes. The decline of Main St. was really the deKlein of Main St. even if they still own some of it.
Maybe our Main Street can be renamed an historic district, as was done in NYC:
http://www.nypap.org/preservation-history/ladies-mile-historic-district/
While the debate can rage on, this is simple economics at play. Supply and demand. We can bemoan the current state of retail or mom&pops vs Amazon, but at the end of the day if rents are too high, no one will sign leases and landlords will be forced to lower the rent, take a below market return, or lose the property to the bank.
This is Econ 101. We may not like the process of making the sausage (turnover of retailers, change, etc) but the market will find its level
Somehow Greenwich, Darien, New Canaan and Fairfield all have vibrant downtowns with interesting eclectic stores as well as some of the bigger retail names, so you can’t blame this purely on Amazon, the economy or shopping habits. The Main street of today should be more about experiences, food, lifestyle, and less about traditional retail. Why hasn’t Westport adapted to the times like our neighbors.
One thing that Fairfield has that we could use is an Office of Community and Economic Development. Here’s a link to their mission statement:
https://www.fairfieldct.org/econdevelopment