Downtown Music Gallery may not stay downtown much longer...

[acroyear]

ANABlog: An Appeal from Downtown Music Gallery:

We have been searching for a new location for the past 6 months, but
if it's anything close to the 1500 sq. ft. we now occupy and need, no
matter how far east we go, the realtors are convincing the landlords
to hold off renting until they get a minimum of $ 60-75 per sq ft per
year - which for 1500 sq ft means a monthly base rent nut of
$7500-9400 - even on Ave D, where no one ventures to!

The only people who can afford that are banks that now make a tidy
new-found profit off of people taking $20 out of their account every
ten minutes [!] and national chains that take a tax loss to blanket
NYC with their outlets. No merchant who deals in anything but items
that have over 1000% markup [like drinks] can afford to stay in
business here, not even groceries and supermarkets, which have all
been closing rapidly. Just think: the overuse of debit cards has
caused the price of all everyday goods and food to skyrocket - most
of the increased amount just goes to the rent!

Anyone in NYC knows there are many spaces - in both prime and not
prime areas - that have remained empty for YEARS due to realtors who
have sold their bill of goods to landlords - when we've met those
landlords, many have lamented the money they've lost due to the
pressure from realtors, and were perfectly willing to talk lower
prices, when beforehand the agent said they wouldn't budge [and
wouldn't put us in contact directly, naturally]

I'm wondering if there's that similar effect in shopping malls these days, given the number of restaurants that have closed in the nearest mall to me in the last 3 months, one of which was a "$30 for two" meal that is now replaced by a "$80 for two" buffet (according to a friend).  Another mall in the area (Tysons Galleria Two) closed its food court a few years ago and replaced it with an upscale shop and an upscale deli (that's able to hold on 'cause it's getting ALL of the traffic that the court used to get).  Fast food in a mall just doesn't have the markup to remain competitive with their out-of-the-mall siblings - you can't charge $5 for what a regular shop charges $4 for, but you can't afford to charge just $4 and make enough to stay in the building.

ridiculous...and they wonder why the overall cost of living in this town is so damn high.

Comments

[voltbang.livejournal.com]

umm, what is the debit card connection?

And those two restaurant locations in the mall nearest you, if it's what I'm thinking, have gone through a large number of tennants in not very long. I think they are doomed locations. The food court hasn't lost a tennant in quite some time at that mall. But then, it's not tysons II, which is the most upscale mall for quite some distance. The people in there to shop for diamonds, fur coats and suits really aren't the food court sort.

But the cost of living does suck. In the end it will be all lawyers, doctors and dentists here.

[acroyear70.livejournal.com]

Uh, Fair Oaks ain't going anywhere - it's trouble is that it's trying too hard to turn into that upscale place.

and, uh, the tysons i mentioned IS "Tysons II" - I called it by its formal name. And it has very few "diamonds" and "fur coats" spots. It has a trendy-clothes to everything else ratio of about 3 to 1 (I was just there 2 days ago).

But a few years back it had a food court that got a LOT of daily business from the nearby offices (especially those that one could walk from) and now that's gone and every restaurant in there is of the "$80 for two" variety.

Yes, by contrast, Tysons I is quite stable, having only had a couple of turnovers in the original food court down by California Pizza Kitchen.

The debit card thing I think is the surcharges the banks charge for handling a debit card as a debit (like an atm, rather than as a credit card), which again if you have a high profit margin, is fine, but if your margins are in the "barely above 0" mode like most small stores, it can turn that into "just below 0". This hits even harder when your real estate price (and tax) goes up AND your shipping costs double in less than 5 years which everybody's did thanks to the gas prices. The only way to really support that is to raise your prices, but when your whole point is to try to be lower than the shopping mall price for these (or in their case, the Virgin Megastore in Times Square, the only other store to have a comparable stock in non-popular music), that can get difficult.

A lot of these small stores are "no american express" because of the high charges they add on.

[voltbang.livejournal.com]

Oh, I thought you were referencing Dulles Town Center. They have had some heavy turnover on their sit down restaurants lately, and the new one appears to be a lot of style, little substance, and more than I would pay for an unattractive pizza.

Last time I was tysons 2, it was a lot higher end than anyplace I would shop. Maybe a lot of that was trendy clothes, but my eye landed on a few really intimidating places. That was 4 years ago, and the place struck me as being too expensive to even bother setting foot in. I can imagine why there's no food court. They are just priced out of the food court market.

I guess the debit card thing makes sense. It seems like, if that small shift is a business killer, then margins were too tight anyway. The real estate cost changes are a much larger cost, it seems like that is where the merchants anger should be focused. I have seen the no amex signs for a long time, I've heard they screw small business agressively. Seems like that has to change though. Or is an all mega-store world the way of the future?

[acroyear70.livejournal.com]

Well, I can see a variant on the "megastore" concept, something which used to exist and still does in a few places, which is the megastore has microstores in it.

For example, Sears - the Avis car rental, Jiffy Lube, eye-wear, tuxedo, etc shops (and in Fair Oaks, the new Lands End shop/section) all work by taking up space inside the sears building and using their facilities for sales (thus, Sears as the mega store can keep the AmEx-like costs down, and in exchange gets more places/people to promote its own credit card to).

this is similar to Amazon retailers - places where you shop through amazon's front page, pay for it through amazon's secure system (and avoid multiple registrations at every single shop you might want to hit) and then the individual shop handles actually getting it to you.

certainly the "land" (shelf space)is still expensive but at least other costs like the exchange system can all be handled "in bulk" and you don't incur the small-business curse by not having enough sales to justify the expense of supporting debit cards or amex or any of that. there's just the up-front expense of actually getting your stock tagged into the system.

Now that niche, aside from Sears, is not going to magically make itself, nor is the big retailer (who makes more profit by selling big lots of the same crap rather than small lots of stuff people would actually want). The small retailers are going to have to actively form the alliance to get something like this working...

...trouble is, they're too busy just trying to stay afloat (or giving up and selling the stock at a relative loss, as a friend of mine in the comic/games retail business is doing) to have the time to do this.

[thelongshot.livejournal.com]

It is going to be interesting to see what happens with Springfield Mall, which was just bought recently by a developer. It sounds like they want to tear down one of the parking garages there and build some residential out there.

It is amazing how far Springfield Mall has fallen. I'd say about half the mall is empty. To be honest, there is more interest in the stores that have sprung up AROUND the mall rather than what is actually in the mall itself.

Getting back to your article, I never understood the ideal of leaving something empty when it could make you money. Back at my previous place of employment, the building next to us, which used to house Worldcom before their problems, sat empty for years. We talked to our bosses a few times about acquiring that building, but they said they pretty much priced themselves out of their range.