by Wolf Richter, Wolf Street:

Brick & Mortar Meltdown reaches “Crown Jewel in American retailing.”

Brick and mortar stores face a tough environment. Retail is shifting to online operations. E-commerce sales have surged at an annual rate of about 15% in recent years. But sales at department stores and smaller stores are deteriorating. Malls have hit hard times. Retail bankruptcies have formed a horrific litany. And the signs are visible everywhere.

So here is the excerpt of an essay with haunting, beautiful photos of this meltdown as seen from the sidewalk on Manhattan’s glorious Madison Avenue, “Crown Jewel in American retailing.” The essay, “Walking the Avenue with a Camera,” was originally published on New York Social Diary, a great place to read about the goings-on in New York City.

Here in New York we are experiencing a de-accessioning of retail space for retail businesses. We are seeing more store vacancies than I can ever recall in the last six decades. The City is a changing system socioeconomically. Neighborhoods come and go. In the past twenty years there has been a trend for restoration and revitalizing the communities. You can see it in all the boroughs, especially when it comes to housing. Brooklyn and Queens and Upper Manhattan, including Harlem are good examples of this progress. Although it has got more, much more expensive for the average working person, just to provide a roof over one’s head. In the 1960s when I came here out of college the rule of thumb for rental expense was one week’s salary a month. I know people today who are paying more than 50% of their monthly for shelter.

What is staring at us now are commercial vacancies. It looks like failure. Failure to succeed with one’s business. Madison Avenue, the Crown Jewel in American retailing for many decades (it was originally an upscale neighborhood of townhouses a century ago), is now looking like the guy you run into on the street panhandling who is missing a lot of teeth.

Many people are talking about it, but only in passing (“did you notice …?). Others say it’s because everyone shops on Amazon. And doesn’t go to the store anymore. I recall riding home in a taxi one night more than ten years ago, with Vera Wang and a couple others. We were riding up Madison Avenue heading into the Seventies when one of passengers remarked to Vera that she must be making a fortune in her shop in the Hotel Carlyle building on Madison and 77th Street. Vera said then that nobody with a shop on Madison Avenue made any money because the rents were so high. They justified the rent for the prestige it brought their (expensive) product.

This current vacancy trend is unusual and it’s going on all over the city and here in Manhattan from south to north from east to west. Last week we asked Pierre Crosby, a new photographer, if he’d photograph all the vacancies on Madison Avenue from 57th Street to 92nd Street, just to get an idea of the magnitude of the problem. Pierre covered the avenue this past Sunday afternoon when the city was quieter, from 57th to the low 90s. We told him to photograph all the empty storefronts as well as some of the businesses that are still operating. Vera Wang, coincidentally vacated her space (where she was located for decades) last week. In the 33 blocks (a mile and a half), Pierre found 50 vacancies.

What does it all mean? There are some sensible, practical guesses and then there is the unknown. That great palatial mansion that the Vanderbilts built in the last decades of the 19th century for what would be hundreds of millions in today’s dollars, was sold by Mrs. Vanderbilt Belmont forty years later in 1932, for $20,000. That doesn’t seem like a comparable situation to ours on Madison Avenue but it does serve to remind that value varies, even with wild volatility at times. Are we there yet?

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