(Alexia Elejalde-Ruiz) Crate and Barrel plans to close its Manhattan flagship this summer in the face of rising Madison Avenue rents, the company confirmed Monday.
The Northbrook-based furniture and home accessories retailer on Aug. 2 plans to close the 62,000-square-foot store at 650 Madison Ave., where it has operated for more than 20 years. It does not plan to relocate and will continue to operate its other New York City store in SoHo.
The Wall Street Journal, which first reported the planned closing, cited an anonymous source as saying that the company decided to leave before it would have to face higher rents in the neighborhood. Asking rents on the Madison Avenue retail corridor, populated largely by luxury retailers, increased to $1,584 per square foot in the first quarter, up 8 percent from the prior year and up 91.5 percent from five years ago, according to real estate services firm Cushman and Wakefield.
A company representative declined to comment further Monday but said “everything in the Wall Street Journal story is confirmed.”
“This was a difficult decision, and we are grateful to our departing associates for their hard work and service,” the company said in a statement. “We remain well-positioned to serve the New York market through our SoHo store, as well as stores in the surrounding area and through our website.”
Retail consultant Neil Stern said one of the challenges traditional retailers have faced is competing for flagship retail space against merchandise brands that use those locations for marketing as well as sales. Toys R Us earlier this year announced it will close its FAO Schwarz flagship in Manhattan, citing rising rents, though it is seeking another Midtown location. (An earlier version of this story said the toy retailer had also announced the closure of its Toys R Us location in Times Square, but a spokesperson clarified that while its lease there does expire next year and it is exploring alternative locations, it has not announced it is closing.)
“Crate is certainly looking at this rationally,” said Stern, senior partner at Chicago-based McMillanDoolittle. “They don’t need a flagship in New York to build their brand, so this is probably purely a business decision.”
Crate and Barrel, which has more than 100 stores worldwide, has yet to name a new CEO since the departure last summer of Sascha Bopp, who during his two years helming the company expanded its international footprint. He resigned less than a month after his No. 2, Marta Calle, left the company.
The company, which is privately held, recorded sales of $1.38 billion in the fiscal year that ended in February 2014, down 0.3 percent.
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(Sue Doerfler) PetSmart plans to lay off 15 percent of the employees who report to the company’s Phoenix home office.
The move affects employees in all positions, whether they are in metro Phoenix or out in the field, said Michelle Friedman, PetSmart spokeswoman.
Friedman had no figure for the number of employees who will be affected. Severance packages will be offered, she said.
On Friday, CEO Michael Massey sent a letter to employees announcing the pet retailer’s intent to restructure and consolidate.
Affected employees will be notified Wednesday, according to his letter, which also stated that the company had engaged consulting firm AlixPartners to review departmental structures, costs and staffing levels.
“The objective of this review was to identify the priority areas where we need to invest additional resources and also the areas where we need to gain efficiency,” Massey wrote in the letter. “This work included the identification of positions that could be consolidated, as well as restructuring business functions for optimum efficiency.”
Friedman said the move is an important step to making PetSmart a highly efficient retailer and is instrumental to the future growth of the company.
As part of the restructuring and consolidation, no divisions are being moved out of state, Friedman said.
The company, which was acquired in March by a private-equity consortium led by BC Partners, plans to announce its first-quarter sales results to investors Tuesday.
Since the acquisition, PetSmart has named a new CEO and a new senior leadership team, including executive vice president and senior vice president positions responsible for customer experience, merchandise planning, strategy, initiatives, real estate and other key growth areas.
The company has 3,753 workers in Arizona, according to the annual Arizona Republic 100 list of the state’s largest employers.
Let insolvent businesses go broke including banks and governments. They’re broke because they’re inefficient or there’s no demand for their services, or both.