The Best Buy store in the East River Plaza in Harlem will be among 50 outlets the troubled electronics retailer will close, the company has announced.
Retail rivals are already in the wings eying the nearly 50,000 s/f foot store space, according to owner Blumenfeld Development Group.
But Best Buy has its mind on ironing out the details of a roll-out for 100 smaller format Best Buy Mobile stores in a bid to level the playing field with online and discount retailers.
Best Buy announced Monday that its Harlem store was one of 50 closings among its 1,102 big box stores across the United States. It has six large format stores in Manhattan and another six in the four outer boroughs.
East River Plaza is operated by Forest City Enterprises and owned by Blumenfeld Development Group and Forest City Ratner. In addition to the 49,666 s/f Best Buy, the plaza is home to a Costco, Target, Marshalls, Old Navy and other stores, and has an attached 1,248-car parking garage.
A Blumenfeld representative said a number of parties are “enthusiastic” about the Best Buy space.
Retail brokers agree that the East River Plaza location is qualitatively different from Best Buy’s other large Manhattan stores — which include storefronts in Union Square and on the Upper East Side, and on Broadway in SoHo and Midtown.
“That’s a tweener market,” Jeffrey Roseman, executive vice president at Newmark Knight Frank Retail, said of East River Plaza. “It’s in between the Upper East Side and Queens and Westchester and Long Island. People are driving there. It mirrors a suburban center more than an urban streetscape.”
The vacancy that results from Best Buy’s departure may not appeal to many retailers already established in New York, said Robin Abrams, executive vice president at The Lansco Corporation. It might, however, provide a good entry to the city for a traditionally suburban chain.
“It could be a little more affordable for a retailer who wanted to take a shot trying something in New York, maybe Kohl’s or one of the smaller department stores,” she said. “It would be a little less scary and less outside their prototypical norm.”
Abrams also noted East River Plaza’s lack of foot traffic compared to Best Buy’s other Manhattan stores. “It’s a bit more destination,” she said.
Roseman said he expected the company’s New York stores would outlast other locations. “New York is profitable. They do business in New York and people buy electronics in New York,” he said. “If you look at Virgin Records, they held on to their last stores in Union Square for a long time after people were buying music on iTunes.”
Best Buy’s big-box stores range in size from 20,000 to 50,000 s/f, according to the company, which has cited competition from online and discount retailers in its decision to move away from larger-format stores and focus on its smaller mobile phone storefronts, which average 1,200 s/f.
Currently the company operates just under 200 mobile stores, with three in New York City — two in Manhattan and one in Staten Island. “Curating is the new word in retail, and I think people are figuring out it’s better to have fewer items in the stores that produce the best revenue and the best margins,” said Chase Wells, executive vice president at Northwest Atlantic Real Estate Services.
If Best Buy does give up any of its other Manhattan boxes, however, brokers seem confident there are retailers who would be eager to fill the space.
Best Buy is rolling our its new smaller format store while closing 50 big box sites
“Best Buy has great, great strong fabulous locations in New York,” Abrams said.
A vacancy of 30,000 or 40,000 s/f in a prime Manhattan location would appeal to a number of daily needs and soft goods retailers, said Wells. He and Abrams both pointed to the recent Manhattan successes of clothing stores with large, vertical footprints, including Zara, Uniqulo and DSW.
“I think there’s lots of pent-up demand [for large spaces in Manhattan] because there are retailers who have been opening up and it’s been going well,” Abrams said.