After the lawsuit regarding fakes, Valentino comes to court for a lease. In the context of limitations imposed by the pandemic, New York is too expensive. And so the brand wants to get rid of the onerous lease (expiring in 2029) of its four-storey boutique on Fifth Avenue. Valentino turns to the judge to free the space at the end of the year. But real estate implications of the pandemic involve many luxury routes around the world, starting with Hong Kong.
New York is too expensive
“It is impossible to manage the boutique as initially foreseen in the lease – writes Valentino Usa in the documents filed last Sunday to the Supreme Court in Manhattan -. The pandemic substantially hindered the business, making the premises impractical, and the business no longer feasible”. As reported in the New York Post, the owner of the property is 693 Fifth Owner. Valentino turned to the judge because the requests to renegotiate the contract were rejected by the owner, according to which the Coronavirus crisis is not among the causes attributable to the modification of existing agreements.
The pandemic forced many companies to review their retail network. Some decided to close their stores, others are trying to reduce the payables on the balance sheet. Others again, such as H&M, Urban Outfitters and Burlington Stores, as Footwear News writes, have decided not to pay the rent for the lockdown period. And there are many lawsuit, such as those involving Gap and even the NBA, the American basketball league, for the missed payment of the store’s rent on Fifth Avenue.
The worst city is certainly Hong Kong which, in addition to the pandemic, has to deal with protests. South China Morning Post takes Russell Street as an example, located in Causeway Bay in Hong Kong. The street has lost many high-end tenants, replaced by low-price retailers who pay a much lower rent than their predecessors. A venue that hosted Tissot watches is now home to a cell phone accessory retailer who pays only 6% of what the previous Swiss renter paid. The newspaper itself confirms the closure of the Prada store, one of the 6 brands, out of 27, that have already said goodbye to Russell Street.