In the heart of Manhattan, national chains including J.C. Penney, Kate Spade, Subway and Le Pain Quotidien have shuttered branches for good. Many other large brands, like Victoria's Secret and the Gap, have kept their high-profile locations closed in Manhattan, while reopening in other states.
Michael Weinstein, the chief executive of Ark Restaurants, who owns Bryant Park Grill & Cafe and 19 other restaurants, said he will never open another restaurant in New York.
Of Ark Restaurants' five Manhattan restaurants, only two have reopened, while its properties in Florida — where the virus is far worse — have expanded outdoor seating with tents and tables into their parking lots, serving almost as many guests as they had indoors.
"There's no reason to do business in New York," Mr. Weinstein said. "I can do the same volume in Florida in the same square feet as I would have in New York, with my expenses being much less. The idea was that branding and locations were important, but the expense of being in this city has overtaken the marketing group that says you have to be there."
Even as the city has contained the virus and slowly reopens, there are ominous signs that some national brands are starting to abandon New York. The city is home to many flagship stores, chains and high-profile restaurants that tolerated astronomical rents and other costs because of New York's global cachet and the reliable onslaught of tourists and commuters.
But New York today looks nothing like it did just a few months ago.
In Manhattan's major retail corridors, from SoHo to Fifth Avenue to Madison Avenue, once packed sidewalks are now nearly empty. A fraction of the usual army of office workers goes into work every day, and many wealthy residents have left the city for second homes.
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"In the prime real estate areas, all the stores rely on having half international tourists and half local tourists or those from the local neighborhoods," said Thiago Hueb, a founder of a jewelry company who had decided to close his flagship store on Madison Avenue before the pandemic struck because of high rents.
Now brokers are calling him trying to lure him back to the block, but Mr. Hueb, whose jewelry is sold in 80 department stores nationwide, is not interested.
"The avenue is no longer what it used to be," he said.
Some popular chains, like Shake Shack and Chipotle, report that their stores in New York were performing worse than others elsewhere, investment analysts said. A few dozen Subway locations have closed in New York City in recent months. Le Pain Quotidien has permanently closed several of its 27 stores in the city and plans to leave others closed until more people return to the streets, said Andrew Stern, co-chief executive of the chain's parent, Aurify Brands.
A Gap Store near Rockefeller Center has stayed closed and has not paid its $264,000 monthly rent. Two T.G.I. Friday's in prime locations, one near Rockefeller Center and another in Times Square, have remained closed while its restaurants elsewhere in the country have reopened.
Shake Shack reported on July 30 that it had experienced a 40 percent decline in revenue in the second quarter and that its stores in big cities like New York "were most impacted by the Covid-19 outbreak."
They eventually reopened to serve takeout and deliveries, but they did not rebound as well as the company's suburban locations that have drive-up windows where customers can avoid all but the briefest interaction, Ms. Regan said.
"The drive-through is the channel that consumers feel most comfortable with," she said.
Like Shake Shack, Chipotle told investors that its stores in the Northeast, including New York, were underperforming the rest of the chain, said Nick Setyan, an analyst with Wedbush Securities in Los Angeles.
The main reason. Mr. Setyan said, is that "people just aren't going to work" in much of Manhattan.
Sad to hear. I really hope this doesn't become the new normal in the city.
Retail Chains Abandon Manhattan: ‘It’s Unsustainable’ (Published 2020)
Some national chains, both retail and restaurants, are closing outlets in New York City, which are struggling more than their branches elsewhere.
