Madewell’s exit comes after the recent closures of Adidas and J. Crew, Lucky Brand and Aldo, with the value of the empty shopping center falling 75% from $1.2 billion to $290 million in eight years.
- Madewell has announced it is pulling out of the beleaguered San Francisco mall, making it the fifth store to leave in the past month
- The company follows the likes of Adidas and J. Crew, Lucky Brand and Aldo who have left or are scheduled to leave the mall this week.
- It comes after the shopping center has lost a staggering $1 billion in value since 2016, as the city battles rampant homelessness and rising crime.
The moribund mall in downtown San Francisco has lost its fifth store in a month, after Madewell announced plans to escape the struggling mall.
The clothing and accessories store said on its website that it would close its indoor location on Monday.
Madewell follows its sister brand J. Crew, as well as Adidas, Lucky Brand and Aldo, all of which have closed or plan to close their doors in the coming days.
The shopping center — which is now 75 percent empty — has lost $1 billion in value since 2016, as the beleaguered city battles rampant homelessness and rising criminal activity. The occupancy rate in similar shopping centers usually reaches 93%.
Nordstrom was the mall’s anchor tenant and occupied 312,000 square feet of multi-story space in the mall. Its closure in August 2023 sent shockwaves through the large upscale shopping center formerly owned by Westfield.
The mall still has a large Bloomingdales store – but all eyes are now on this retail giant to see if it will close its store as well.
Since then, retailers have rushed to vacate the failing mall, with businesses citing weak sales, diminished foot traffic, and poor levels of crime and drug use in downtown San Francisco.
The mall is located in the troubled Union Square area downtown, which has seen businesses and tourists flee since the outbreak of the pandemic. San Francisco’s tech-driven economy means many locals continue to work from home, with the city center now overcrowded with homeless people, drug users and associated crime.
Photos and videos taken inside the once-vibrant mall show it drained of life, with closed stores and few or no customers.
Its owners Westfield and partner Brookfield Properties lost control of the 5 million square foot retail and office complex to lenders in June last year, defaulting on $558 million in loans.
“For more than 20 years, Westfield has proudly and successfully managed San Francisco Center, investing significantly during that time in the vitality of the property,” the company said at the time.
“Due to the difficult operating conditions in downtown San Francisco, which have resulted in a decline in sales, occupancy and traffic, we have made the difficult decision to begin the process of transferring management of the shopping center to our lender to allow them to appoint a receiver to operate the property in the future.
Greg Williams of Trident Pacific, an Orange County real estate firm, was appointed as receiver with the ability to collect rent and sell or liquidate the property.
The property’s lenders have since advised the receiver to sell the mall in order to pay off the debt, according to the Real Deal.
It opened in 1988 with Nordstrom, then doubled in size in 2006 with a large, attractive extension that included a Bloomingdale’s as its anchor.
The mall’s collapse is consistent with a broader disaster affecting retailers throughout this part of the city.
Nearly 100 retailers in downtown San Francisco have closed their doors since the start of the pandemic, a decline of more than 50 percent.
One notable closure includes accounting firm KPMG, which is set to move out of its $400 million namesake building.
The consulting and accounting giant first leased space in the 25-story office tower when the building opened in 2002. Its name hangs above the entrance to the skyscraper where the company currently occupies more than 100,000 square feet.
KPMG originally acquired 90,000 square feet at 55 Second St. on a 10-year contract, marking the second-largest office deal in 2003.
It has since expanded to include nearly a third of the 380,000-square-foot building, leading it to be widely known as the “KPMG Building.”
The company is now considering ending its two-decade relationship with the building, according to the San Francisco Chronicle. It’s the latest tenant looking to move out of the downtown area.
In the first five months of 2023, preliminary reports show there were 346 overdose deaths in the city — an increase of more than 40 percent from the same period in 2022.
Economists have warned that the city is headed toward an “urban death cycle” — a vicious cycle of interconnected trends and forces that send cities into economic and social ruin.
High rates of theft have proven to be a problem in the area recently, with a downtown Walgreens store deciding to chain up their refrigerators to stop shoplifters.
Retail powerhouse Old Navy announced it would close its flagship store in the area last month.
Anthropologie and Office Depot also made the same decisions.
They join a growing list of stores leaving the coastal city, including H&M, Marshall’s, Gap and Banana Republic.
An alarming recent report showed that 95 downtown San Francisco retailers have closed their doors since the start of the coronavirus pandemic, a decline of more than 50 percent.
Of the 203 retailers that opened in 2019 in the city’s Union Square area, only 107 are still in business, a 47 percent decline in the few years the pandemic has swept through.
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