Report: Manhattan retail rents plunging
New York City A seven-year boom in Manhattan’s retail rent costs has finally run its course. Rental costs plunged 11% since fall 2008, a drop that puts asking rents down to approximately $115 per square foot, according to the Real Estate Board of New York’s annual spring report.
The study, released Thursday, covers all of Manhattan’s neighborhoods, including the city’s prime retail regions. Understandably, these areas took the strongest hits. For example, the asking rents in the Flatiron District dropped 29% to $285 a sq. ft., and Broadway between West 72nd and West 86th Streets dipped 24% to $293. This neighborhood commanded $384 last spring, the study said.
Even the busy Herald Square area between Fifth and Seventh Avenues took a 23% slide to $508.
“Declines in asking rents have just begun to be reported, although the retail market has been feeling the effects of the recession for some time,” REBNY president Steven Spinola said in a statement.
Lower rents could open the door to new tenants that were previously intimidated by high rates. Discount retailers, including Nordstrom’s Rack outlet chain, Marshall’s and T.J. Maxx could be among the first to take advantage of the lower asking prices, according to an article in Crain’s New York Business.
JCPenney beats April comps guidance, raises 1Q earnings outlook
PLANO, Texas JCPenney reported that comparable-store sales decreased 6.6% for the four weeks ended May 2, better than the company’s guidance for sales to decrease 9% to 12% and compared to a 1.7% decrease last year. Total sales in April decreased 5%.
Sales during the month benefited from the shift of Easter into the April reporting period this year, partially offset by the loss of one selling day. The top performing merchandise divisions during the month were women’s and children’s apparel, reflecting a strong customer response to the company’s spring apparel offerings. Fine jewelry experienced the weakest sales during the month. Geographically, the best performing region of the country was the Southwest, while the Central region experienced the weakest results.
Management’s guidance for the four-week period ending May 30, is for a 9% to 12% decrease in comparable-store sales, compared to a 4.4% decrease in last year’s May period.
Based on better-than-expected sales results in the April period, operational efficiencies achieved through process improvements and a consistent focus on expense control, management expects earnings for the first quarter to be in a range of 9 cents to 11 cents per share.
Children’s Place sees increase in April, 1Q sales
SECAUCUS, N.J. The Children’s Place Retail Stores announced net sales of $135 million for the four-week period ended May 2, a 5% increase compared to net sales of $128.7 million for the four-week period ended May 3, 2008. Comparable-retail sales, which include online sales, increased 5% in April on top of a 17% increase for the same period last year. During April 2009, comparable-store sales increased 4% in the United States and declined 4% in Canada, and online sales increased 40%.
For the first quarter ended May 2, net sales increased slightly to $401.9 million. Comparable-retail sales, which include online sales, increased 1% during the first quarter of 2009 on top of a 6% increase during the first quarter of last year. For the first quarter of 2009, comparable-store sales declined 1% in the United States and declined 3% in Canada, and online sales increased 42%.
The company is estimating that earnings per share from continuing operations for the first quarter of 2009 will be in the range of 75 cents to 80 cents.