Not A ‘Retail Apocalypse’, But ‘A Changing Of The Guard’
I’ve been working in a number of Class A Downtowns these last few years, virtually all of them wringing their hands about ELEVATED RETAIL VACANCY LEVELS that had existed prior to the pandemic and climbed still further during it. I do not, however, see such struggles as indicative of a “retail apocalypse” but rather, a “changing of the guard.” This transition can admittedly be quite unsettling for those who grew up with the assumption that stores like the Gap, Victoria’s Secret and Brooks Brothers were fixed points in the universe. Many of them are indeed in contraction mode today, yet there are a slew of up-and-comers that are both able and willing to expand – most notably, the digitally-native or “direct-to-consumer” (DTC) retailers that have come to realize how brick-and-mortar is essential to achieving and sustaining profitability. Warby Parker, Allbirds, UNTUCKit, The RealReal, Vuori, Buck Mason, Todd Snyder, Faherty, Rhone, Rothy, Brilliant Earth, Interior Define, Brooklinen, Parachute — the list seems to grow by the day. The linked article notes how more than 15 such brands have opened in recent years along Georgetown’s M Street. And there are many other non-DTC concepts that are also expanding in such settings. That’s why I don’t get too worried about Class A shopping destinations with high levels of foot traffic: even when they lose tenants, their empty storefronts will likely be backfilled soon enough. Perhaps not as quickly as we’d like them to be, but markets, even inherently strong ones, sometimes need a little bit of time to recalibrate amidst transition. The challenge in such cases is to hold the line in the interim on rash zoning or policy decisions that could undermine what is ultimately a healthy process for districts and communities.