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Posted Feb 27, 2009, 7:01 AM
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Join Date: Jul 2007
Location: Seattle, WA/San Francisco, CA/Jackson Hole, WY
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http://www.sfgate.com/cgi-bin/articl...business&tsp=1
Quote:
Union Square area losing its Virgin-ity
Victoria Colliver, Chronicle Staff Writer
Thursday, February 26, 2009
(02-26) 20:27 PST -- The Virgin Megastore in San Francisco will shut its doors in late April, adding a large vacancy at Stockton and Market streets to a growing number of empty storefronts around Union Square, the retail heart of the city.
The music and video retailer, which opened its estimated 45,000-square-foot store 14 years ago, will start liquidation sales sometime next month, company officials confirmed today.
Union Square is still considered one of the country's most vibrant shopping districts and a destination for international tourists. But one of the worst holiday shopping seasons in recent memory, low consumer confidence and an overall dismal economic scene have made retail among the hardest-hit sectors of the economy.
"It's a tough time. It's probably as tough a time I've seen since I've been in business here," said Ken Brownell, partner in Blatteis & Schnur, a retail brokerage firm that manages and owns some buildings in Union Square.
But he remained optimistic. "In San Francisco's history, the retail comes back sooner than the rest of country. We're the last ones to get hit and first to come out of it," he said. And the economic downturn has opened up opportunities for retailers to readjust their rents and for new businesses to come into the area, he added.
The landscape, however, paints a different picture.
The closure late last year of Shoe Pavilion left an empty storefront at 838 Market St. The Escada boutique, formerly at 259 Post St., and Ann Taylor, at 240 Post St., closed a couple of years ago, and their spaces remain vacant. The former Disney Store at 400 Post St., which shut its doors last year, has yet to be filled.
In addition, a number of retailers are considering downsizing or not renewing their leases once they expire. Those include Talbots at 126 Post St., Mango at 117 Post St. and Rockport at 165 Post St., which wants to sublease a portion of its space.
Rite Aid Corp. announced earlier this month that it was pulling out of San Francisco, selling all seven of its stores to Walgreen Co. Since Walgreen already has a nearby store on Market Street, the future of the Rite Aid at 779 Market St. is in doubt.
But all is not bleak. Amid the retail shakeup, there are newcomers to the area. Bulgari is on track to open a 13,600-square-foot store at 200 Stockton St. CB2, Crate & Barrel's lower-cost home-furnishing outlet opened in the fall. And a lease has just been signed for the former Sharper Image site in the 200 block of Post Street, though the brokers involved declined to reveal the new tenant.
Meanwhile, renovations are under way at 800 Market St., across from Virgin, to accommodate a new Diesel clothing store. BCBG just renewed its lease at 331 Powell St., and British designer Sir Paul Smith is planning to open his store at 46 Geary St. in the coming weeks.
As for Virgin Megastore, it had been affected in part by a shift in music-buying habits to digital downloads - the same trend that led to the demise of such mainstays as Tower Records in 2006. In recent years, however, Virgin diversified its offerings to include DVDs, clothing and accessories.
The Virgin Megastore in New York's Times Square also will close and will make way for trendy clothing retailer Forever 21. The company said Thursday it also would close its store in New York's Union Square.
The closures of the San Francisco and New York locations will leave just three Virgin retail stores - in Hollywood, Denver, Colo., and Orlando, Fla. - from a peak of 23 stores in 2002.
Part of the empire started by Sir Richard Branson, Virgin Megastores were sold to the Related Companies and Vornado Realty Trust in 2007. At that time, the company operated 11 stores. Officials from Related Companies did not return calls for comment, and a Vornado representative referred all calls to Virgin.
"It's sad Virgin is going, but nobody is really surprised," said Vikki Johnson, principal in the San Francisco real estate firm Johnson Hoke Ltd. But, Johnson said, the site has a future because that corner of Market Street is a far more attractive location than when Virgin Megastore opened in 1995.
San Francisco resident Mark Nichols stopped by the Virgin Megastore today after trying to take advantage of book sales in the final days of the iconic Stacey's Bookstore, which is closing up shop at 581 Market St. after 85 years in business.
Nichols, 50, was unaware of Virgin's pending closure. "That's pretty sad," he said of the news, adding that he planned to return for the going-out-of-business sales. "I think we're getting the repercussions of the economy. The dominos are falling."
E-mail Victoria Colliver at vcolliver@sfchronicle.com.
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Ok, the only thing new that I found out from this article was that Rite Aid had sold their SF stores to Walgreens. Most of the Rite Aids that I can think of in SF are practically right across the street from an existing Walgreens. It will be interesting to see what happens to those places (I'm guessing that some will close - either the Rite Aid or the Walgreens across the street).
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Too bad we've already got our multi-story Forever 21 a block away...
Old Navy has its gaudy lights, and Diesel will have its sleek renovation, I'd like to see something prominent and bright there. (Adidas could bring a giant David Beckham poster :p) Actually now that I think of it, wasn't there already like a Colt or Falcon ad on the upper floors? haha
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