Juicy Couture announced late last week that it will be closing its Madison Avenue location due to the fact that the company can no longer afford the $2 million rent. The company originally signed the prestigious avenue's lease when it was thriving and sales were at their highest. But the company has lost significant revenue at the Madison Avenue location recently and the mid-range price point on JC products has prevented the brand from staying afloat amidst neighboring higher end brands. Juicy president Edgar Hubers said in a statement to WWD last week, “The Madison location became a neighborhood store, not a high-traffic store. It was never extremely strong for us. It’s important to have a store on Madison. It’s prestigious, but $2 million [in rent] is too high. Our average transaction is not as high as our neighbors.” The cutesy sportswear of Juicy Couture will continue to have a home in the Fifth Avenue retail location where, Huber claims, customers seemingly prefer to shop anyway.
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And though the Madison Avenue address may not have been appropriate for "faux" couture labels like Juicy, the store closing has raised awareness on the topic of astronomical retail rent prices, and what has been happening as a result. A total of 49 spaces are currently available on Madison Avenue between 59th and 79th streets, including 20 vacant locations and 29 locations current occupants want to relinquish. More and more companies, couture or otherwise, are starting to agree that a price cut is starting to become vital. "Landlords will have to bring down prices. Nobody will be willing to pay them,” Huber said simply, reporting to WWD. According to the Real Estate Board of New York, rents have come down slightly. As of last spring, rents were down 8 percent to $979 per square foot from $1,066 in 2008, though no significant change in response to the recession has yet been seen.
Article Source: newyorkmag, WWD
Photo Source: newyorkmag