Virgin Closes 2 More Megastores
March 2, 2009 · Posted in Business
The six-unit Virgin Megastore chain will close two more stores, the Union Square location in New York City at the end of May and the Market St. store in San Francisco at the end of April, sources say. As previously reported, the company announced that its Times Square store will close in April.
In August 2007, the Virgin Entertainment Group North America was acquired by two real estate companies – the Related Cos. and Vornado. Since then, the chain has been reduced from 11 units – with the industry awaiting word of the fate of the three remaining stores in Denver, Los Angeles, and Orlando, Fla.
These stores are just a few more casualties in the massive contraction of retail consumer spending in the US, the End of Consumerism.
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More mid to high-end retailers, such as Best Buy, Gap or Neiman Marcus will have to close down stores nationwide or at least trim down their existing stores. I expect that in 2009 commercial real estate will finally be recognized by the wide public as the disaster it is. Amercia doesn’t need any more Malls. Companies with high exposure to commercial retail properties will suffer. Stocks of Simon Properties Group (SPG) and Federal Realty Trust (FRT) will follow General Growth Properties (GGP) and tumble.
…more bad news for commercial real estate as already mentioned in Holiday Retail Sales Down. The impact of Macy’s closing down just 1 location will be devastating for anyone who rents out the space. Multiply that by 10.
It cannot be pointed out often enough what a devastating disaster still awaits the commercial property industry. It will make the current residential real estate bust look like a soft landing.