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After 25 years, the Kmart on Astor Place shut its doors last week. If you spent any number of those years in lower Manhattan, you might feel wistful about its closing. If you live anywhere else, you might feel confused.
The Astor Place Kmart had become something of a downtown institution. Some have described the location as “haunted.” Others said it was the only place one could feel truly “normal.” Sentimentality aside, the 154,000-square-foot megastore was a historic retail powerhouse, and whatever becomes of the space could point to the state of the department store.
The fall
The Kmart was located on 8th Street and Broadway, situated in the former John Wanamaker New York flagship building, one of Manhattan’s legendary department store structures. When it opened in 1996, the Astor Place location was one of 2,000+ Kmarts throughout America. Now, fewer than 40 Kmarts remain in the US.
- Kmart’s parent firm, Transformco, announced it was closing the Penn Plaza store last February.
- There are now only two Kmarts in New York City, located in the Bronx. (Transformco did not comment on the Astor Place closure.)
Warning signs: “Kmart’s relationship with many of its longtime vendors has evaporated,” department store historian Michael Lisicky wrote in March. “It has led to empty shelves and unusual selections of off-brand merchandise...Kmart is no longer a profitable and dependable outlet for suppliers.”
- Product deliveries and foot traffic to the Astor Place Kmart had slowed in recent months, employees told Lisicky.
But the store was already on thin ice. In 2018, the three-story business shrank to fit two levels. Kmart had failed to pay its bills for years, Lisicky reported.
“In many cases, the real estate underlying [department] stores may be more valuable than the stores themselves,” David Wilk, director of the real estate program at Temple University’s Fox School of Business, told Retail Brew. “That's another strategy for department stores, to come up with a monetization strategy for their real estate.”
The future
Kmart’s fate may look bleak, but the Astor Place space is ripe with opportunities. “Physical retail is not dead. In the urban market, there’s a real place for it,” Kearney’s Michael Brown told Retail Brew—especially for online brands now expanding into brick and mortar.
- “Good space is good space,” Brown said. “If the concept lived [its] life expectancy, the traffic is still going to be there, so we just need to revive them.”
Less is more: As for the fate of the traditional department store? “There will be a place for department stores, but a much more reduced physical footprint in the future,” Brown said. “Less physical space, but still integrated with their e-commerce businesses.”—JG