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Daunting retail outlook

From bankruptcies to store closures, the secular decline of retail is rapidly accelerating. These stories reflect the reality we find ourselves in:

  • Tailored Brands, the parent company of Men’s Wearhouse and Jos A. Bank said it is considering closing as many as 500 retail locations, or more than a third of its total, as it grapples with reduced demand. Before the public-health crisis began, the retailer was already challenged by a trend away from suits as men’s workplace fashion drifted toward more casual styles. Tailored Brands, which has more than 1,400 retail outlets, operated 716 Men’s Wearhouse stores and 474 Jos. A Bank stores as of Feb. 1. Its other brands include Moores Clothing for Men and K&G. (WSJ)
  • Five of Gap’s chains — Gap, Athleta, Banana Republic, Old Navy, and Janie & Jack — sued Brookfield affiliates, claiming that its obligations to pay rent ended when government restrictions forced the company to close stores across the country. In a complaint filed in Cook County Circuit Court, Gap argued that its leases with Brookfield should be modified or terminated because coronavirus-related restrictions made the core purpose of those leases “illegal, impossible, and impracticable.” (Crain’s)
  • Delshah Capital has filed a lawsuit against its retail tenant at 58-60 Ninth Avenue – Urban Outfitters subsidiary Free People – for damages equal to back rent plus all rent that would have been due for the remainder of the lease term until 2027. The retailer occupies 6,800 SF, and stopped paying rent (around $1.4 million a year) in the early days of the pandemic. Empire State Realty Trust, also sued the retailer last month over $1.2 million in unpaid obligations. (TRD)
  • Vornado Realty Trust has recorded a nearly $306 million impairment loss on its Fifth Avenue and Times Square retail joint venture, according to preliminary estimates released Monday. The portfolio includes five properties on Fifth Avenue grouped together between 51st and 55th streets, including the retail at the base of 666 Fifth Avenue. (TRD)

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