The landscape of New York’s Fifth Avenue is changing, with iconic American brands like Lord & Taylor, FAO Schwarz, and Gap shuttering their large, flagship stores. But it’s not all bad news. In their wake, newer, hipper brands are coming in.
Take Lord & Taylor, for instance. The department store has been a fixture on Fifth Avenue for 104 years, its windows full of glamorous mannequins in ball gowns. The store officially closed its doors for the last time this week. But in its place, WeWork is moving in, converting the sales floors into trendy offices for freelancers, startups, and hip companies. WeWork reportedly paid $850 million to acquire Lord & Taylor’s building.
Across the street, luxury marijuana dispensary MedMen has moved in. The new location has been described at the Apple Store for weed, and features elegant wood paneling and wood tables with iPads where you can select the tinctures and vaporizer pens you want to try.
Commercial rentals on Fifth Avenue cost between $500 and $1,000 per square foot, which makes it among the most expensive real estate in the world. This would make MedMen’s 2,000-square-foot store worth between $1 million and $2 million a month.
The changing face of Fifth Avenue is a sign of how retail is being transformed. Many older retailers have failed to keep up with the needs and desires of new consumers. With online shopping, consumers don’t need to go to stores to make a purchase. Newer startups realize this, which is why they focused on wooing customers into stores with fun experiences and beautiful design. At the MedMen store, for instance, shop assistants are on hand to offer you champagne and avocado toast in case you get the munchies.
E-commerce has also made enormous stores unnecessary, since many customers will make their final purchases online, meaning retailers don’t need to waste precious retail space storing inventory. Lord & Taylor’s gargantuan building is a relic of a previous age of retail. It makes sense that it is more valuable as a coworking space where a new generation of entrepreneurs can rent a table, and hatch up creative new ideas to ensure the future of retail remains bright.