At an invite-only party in March 2019, surrounded by a marching band, tap dancers, a-capella singers and a who’s-who of New York’s real estate elite, HFZ Capital’s Ziel Feldman told a reporter that Related Companies had breathed new life into the West Side of Manhattan with the grand opening of the seven-level Hudson Yards mall.
“Hats off to them for being able to actually open and in a challenging retail environment,” he said. “Everything looks beautiful.”
But the outlook for Related’s crown retail jewel dimmed considerably Thursday, when Neiman Marcus announced in court filings that its flagship store in Hudson Yards would be shuttered for good.
The struggling retailer also plans to close three other locations – a 92,000-square-foot store in Fort Lauderdale, Florida; a 53,000-square-foot store in Palm Beach, Florida; and a 125,000-square-foot shop in Bellevue, Washington.
The Dallas Morning News first reported the closures.
“We have carefully analyzed all of the changes that have occurred in the retail environment as a result of COVID-19,” Amber Seikaly, Neiman Marcus vice president, said in a statement. “Customers are and will continue to shop differently than they did prior to the pandemic.”
“A physical location in Hudson Yards is no longer an ideal space for us given the preponderance of restaurants and future office space in that mall,” she added.
The closure of the New York store, which served as the anchor tenant of the Hudson Yards mall, is a blow for developers Related and Oxford Properties, and comes just 16 months after the mall opened. The developers reportedly covered the costs for the retailer to build out the 190,000 square-foot location, and agreed to an arrangement that involved Neiman Marcus paying a portion of sales in exchange for rent.
Neiman Marcus sought Chapter 11 bankruptcy protection in May, with CEO Geoffroy van Raemdonck stating that the coronavirus pandemic had put “inexorable pressure” on his business. The retailer is among several to file for bankruptcy since the pandemic hit, including J Crew and Brooks Brothers.
Although Neiman Marcus said it planned to emerge from bankruptcy by fall — and mass store closures were not part of the plan — Related began to shop around the site as a potential office location.
Reached for comment about the latest announcement, a representative for Related said in a statement that it was “unfortunate that Neiman Marcus was unable to achieve the success that other retailers have found at Hudson Yards,” adding that “This opens up a great opportunity to create incredibly attractive office space with the largest floor plates available in New York City, a private ground floor entrance, and 18 foot high ceilings.”
A marketing document obtained by The Real Deal showed that the space, which spans over three floors, is being pitched as a “campus for innovation at the heart of NYC’s most exciting new neighborhood.”
In her statement, Seikaly said that rather than keeping the Hudson Yards location open, the retailer was “purposefully focusing on the unique relationships we already have with our loyal luxury customers at Bergdorf Goodman, and we will continue to serve our Neiman Marcus customers through our digital selling channel and our other tristate-area Neiman Marcus stores.”