Old Navy to Nordstrom: Half of retailers fleeing downtown San Francisco
June 21, 2023
In the past 18 months, 22 major retailers and hoteliers have fled San Francisco’s downtown.
Beset by rising crime and fewer shoppers on once-busy city streets, major retailers are leaving their broken hearts in downtown San Francisco.
At least 22 big-name businesses have closed or announced plans to flee the area around San Francisco’s Union Square since January 2022, including trendy retailers like Anthropologie, Banana Republic and Crate & Barrel, as well as the investment firm that owns two of the city’s biggest hotels.
Since 2019, 47% of businesses in the area have closed, according to the San Francisco Standard.
Some 203 retailers were operating in and around Union Square pre-Covid; as of May, only 107 were left.
The commercial chaos will continue in coming weeks, with brands like AT&T, Nordstrom, Coco Republic and Old Navy shuttering more shops as soon as July 1.
The most significant casualty — the Westfield San Francisco Centre — came last week as the mall’s operator cited “challenging” conditions downtown, including sagging sales and occupancy rates, for its looming exodus.
San
Francisco’s commercial real estate woes are worsening as Westfield
pulls out of its iconic Union Square mall, where sales have plummeted
35% since 2019.
Westfield stopped making payments on its $558 million loan for the 1.2-million-square-foot Market Street retail hub and began transferring control this month, as first reported by the San Francisco Chronicle.
The mall’s exit is the latest in a series of setbacks in the shopping district, where Nordstrom will shutter two stores — an anchor in the mall as well as a Nordstrom Rack across the street — this summer, slashing nearly 400 jobs.
San
Francisco’s lone Crate & Barrel, at 55 Stockton Street in Union
Square, closed in March 2022. It was then replaced by a Coco Republic
store — which is shuttering next month.
Nordstrom officials made the announcements last month, blaming the “deteriorating situation” in San Francisco.
Westfield’s parent company, Paris-based Unibail-Rodamco-Westfield, said the closures demonstrated the “unsafe conditions for customers, retailers and employees” downtown.
Some 77% of San Francisco residents believe the city’s on the wrong track and just 30% said they felt safe at night downtown, according to a May survey sponsored by the San Francisco Chamber of Commerce.
Both Nordstrom and Nordstrom Rack are packing up shop.
Elsewhere in the area, the owner of two of the city’s biggest hotels — the 1,921-room Hilton San Francisco Union Square and 1,024-unit Parc 55 — announced plans last week to stop making mortgage payments.
Park Hotels & Resorts CEO Thomas Baltimore predicted a “clouded and elongated” recovery in San Francisco while revealing plans to remove the hotels from its portfolio amid record office vacancy — 44.7% of pre-pandemic levels, the Wall Street Journal reported Wednesday — and public safety concerns.
Cinemark Century San Francisco, the Westfield mall’s movie theater, shut down following a final June 15 screening of “Transformers: Rise of the Beast.” According to a company email, the closure came amid a “comprehensive review of local business conditions,” SFGATE reported.
Some seasoned analysts predict the city’s ongoing commercial chaos could be just beginning.
Ken Woods, founder and chairman of Asset Preservation Advisors, said his team of municipal bond managers are backing off San Francisco.
“We’re seeing an emperor without clothes to a certain degree,” Woods told the Wall Street Journal Tuesday.
A Whole Foods location closed in April, after just 14 months of operation.
The grocery location shut down after syringes and pipes were found in the bathroom, the San Francisco Standard reported.
And the city has been dealing with several “open-air” drug markets downtown, including in the Tenderloin district.
The group Mothers Against Drug Addiction & Deaths put up a massive billboard in Union Square last year that read: “Famous the world over for our brains, beauty, and now, dirt-cheap fentanyl.”
The city’s rash of fatal drug overdoses is currently on pace for a record-setting 800 deaths, the San Francisco Standard reported Tuesday.
Westfield has stopped making loan payments on its San Francisco Center mall.
Overall crime near the San Francisco Centre mall has slightly increased thus far in 2023 compared to last year, police data shows. The reported number of major felonies in the Tenderloin swelled by 1.4%, while larceny theft surged 5.6%.
Saks Off 5th downtown has enacted a one-in, one-out system to better patrol for thieves, according to the Daily Mail, while a Folsom Street Target location has put rows and rows of merchandise under lock and key.
Mothers Against Drug Addiction & Deaths put up this billboard in Union Square.
San Francisco Mayor London Breed said the exit of the mall — where dozens of retailers, including Godiva Chocolatier, Clarks, Kay Jewelers, Hugo Boss and Tiffany & Co., have already packed it up — was not a surprise. Its parent company revealed plans last year to sell all of its malls in the United States.
Stores at the mall are still open as police officers patrol the facility in coordination with Westfield security staff.
Parc 55 is one of two luxury Hilton hotels that will be abandoning the area.
A Whole Foods Market in downtown San Francisco abruptly shut down in April after being open for little more than a year. Widespread drug use and rising crime near the 64,000-square-foot store in the city’s Mid-Market section prompted the closure after syringes and pipes were found in the bathroom, the San Francisco Standard reported.
2 comments:
Are residents complaining? This is what the people wanted. Now they have it. Live with it.
Funny how upscale customers don't want to step over piles of shit, drugged out whackadoodles and bat-shit crazy street people to spend lots of money. I guess those upscale customers are just haters.
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