From Portuguese sardines to Japanese toys, Times Square bundles at international retailers
On a recent afternoon, the newly opened store, which combines neatly lined shelves of flat, library-like boxes, seemed out of place near the flagship M&M’s, Hershey’s and Krispy Kreme stores in Times Square.
However, the wonderful world of Portuguese sardines, which didn’t even sell the sweet American dessert, stopped curious tourists. The store, the first of its kind in the United States, offers luxury fish souvenir cases ranging in price from $15 to $44 apiece.
As Times Square, Manhattan’s iconic tourist and entertainment hub, continues to recover from its ghost town days and the fallout from the pandemic, many new retail locations often reflect the cosmopolitan makeup of foot traffic the area is known for.
The idea of Times Square as a “crossroads of the world” is not new, of course, but the pandemic and resulting drop in rents have helped enable a variety of companies to test an outpost on the site. The influence of foreign retailers has grown so large that the Times Square Alliance, a business improvement group that represents the area, has begun to measure it.
Sardine Shop is just one foreign brand that has opened there since the pandemic; The list includes the Filipino fast food restaurant Jollibee, Arabian Oud perfumes, and the Chinese department store chain Miniso. For tourists who don’t care about sardines as their favorite seafood, famous British chef Gordon Ramsay has his namesake Fish & Chips restaurant in the neighborhood.
Tamashii Nations, described as Japan’s premier collectibles brand owned by toy and video game giant Bandai Namco, recently signed a lease for 1,324 square feet in… 1500 Broadway between 43rd and 44th Streets, according to brokerage firm CBRE, which represents the owner.
The improvement has been gradual, and there is no guarantee that it will last. But the region is finding, for the time being, that it has a global reach that helps with demand.
International visitors are big business in New York, and although they account for only 0.1% of the city’s land area, Times Square generates 15% of its economic output, according to the Times Square Alliance.
These foreign travelers generally spend about twice as much per visit as the average international visitor to the United States. That’s according to New York State Comptroller Thomas DiNapoli’s office, citing data from global travel and tourism analytics firm Tourism Economics.
Visitors from China recorded record spending for three consecutive years between 2017 and 2019, with each traveler from that country spending an average of $3,000, nearly 60% higher than the average for all international visitors.
“Why not sardines?” Tom Harris, president of the Times Square Alliance, said in an interview. “Times Square has something for everyone. We’ve seen an increase in international business.”
There is no other store in Times Square quite like the wonderful World of Portuguese Sardines, with its brightly colored boxes arranged from floor to ceiling in a circus-like atmosphere.
About a quarter of Times Square’s retail businesses are international, Harris said, adding that the alliance did not have similar tracking before the pandemic. He said newcomers, both local and foreign, are “taking advantage” of the existing market, including the area’s decline in rental demand like many other parts of the city.
Harris told CoStar News that landlords and brokers “have become more realistic in their asking price which has caused deals to close.” They “started making deals.”
In fact, more stores have opened in Times Square than have closed since the pandemic began, Harris said. With the recent debut of popular Brooklyn ice cream vendor Van Leeuwen 2 Times Square, Which also houses the wonderful world of Portuguese sardines, 180 new retail stores have opened, one more than the 179 that closed, he said.
The Times Square Alliance is tracking leases in the area from 40th Street to 53rd Street and between Sixth Avenue and Eighth Avenue, Harris said. The group also monitors the so-called Restaurant Row on 46th Street between Eighth and Ninth Avenues.
“International companies have demonstrated a strong track record in Times Square, resulting in momentum for rental volume and demand within the submarket – a great indicator of overall stability in the area,” said Gabriel Staab, an associate at Newmark who represented Comore Corp. The operator of the sardine shop at the intersection of 48th Street and Broadway said in a statement.
CBRE’s Henry Rossignol, who represented the landlord in the Tamashii Nations lease, said in a separate statement that Times Square is the “ideal location” to bring the collectibles brand to the New York market in an “initial short-term deal” due to the brand’s “growing popularity and international presence.” Commercial.
Times Square isn’t the only one that has seen a change in demand for tenants, driven in part by falling rents. The overall retail market in Manhattan has shown signs of improvement, but rents remain “well below pre-pandemic peaks,” the industry lobby group the Real Estate Council of New York said in a report published in July.
REBNY said spring rental demand was at least 30% below the peak in 13 of the 17 Manhattan retail corridors it tracks. “More landlords are accepting that 2016 and 2017 rent levels are not on the horizon,” she said.
In fact, in Times Square at Broadway and Seventh Avenue between 42nd and 47th Streets, the average price per square foot this spring, based on seven availability, fell about 12% to $980 from $1,112 a year earlier, and was down nearly 60% from overall the prices. – An all-time high of $2,413 in the spring of 2015, according to a REBNY study.
The opening of Portuguese Sardine World and other stores reflects the transformation of Times Square, just as the broader retail market has changed in the age of Amazon and the rise of online shopping. Consumers have increasingly turned to what is often called experiential retail, where interacting with products in physical spaces is an attraction, industry analysts said.
“There has been a shift” in Times Square because of “the Amazon factor,” Harris told CoStar News. The retail market has adapted to this. We are seeing more food (traders). People want to come for the experience. We have a lot of unique offers for that. We have an experimental retail business.
The REBNY study echoed the point that food and beverage retailers have been “active” in Times Square as it noted that the fashion and entertainment sector remains “lagging” as the area still faces challenges “filling some of the larger spaces.”
However, Times Square has shown a rebound when it comes to attracting visitors. Average weekly pedestrian traffic has recovered to only 10% to 15% below pre-pandemic levels, with some days exceeding it, Harris told CoStar News.
For example, the week that ended August 13 averaged about 340,000 people per day, down about 15% from 2019, a coalition spokesperson told CoStar News in an email, adding that there were also a number of days when Traffic exceeded 400,000 people. The average traffic in Times Square in 2019 was 365,000 per day, the spokesman said.
While total traffic may still be below double digits, the alliance said retail spending in Times Square in the second quarter was $785 million, just 5% below the comparable 2019 level. Hotel spending has outperformed pre-pandemic by 1%, while restaurant spending is just 2% lower and merchandise spending is just shy of 0.3%.
International spending, which has been hurt by the slow return of tourists from China due to travel restrictions in that country, fell 3% to $161 million in the second quarter from its level in 2019 but was up 14% from the 2022 level, according to the alliance. Canadian tourists spent 24 per cent more than before the pandemic, “supporting” weak Chinese spending, the coalition said.
“Historically, international travelers come in, stay longer and spend more,” Harris said. “Some parts of international travel are missing. We are seeing a slow return of people from China.
New York City Tourism + Conventions, the tourism arm formerly known as NYC & Co., expects the city to attract 63.3 million visitors this year, just 5% below the 2019 level of 66.6 million. By next year, the number is expected to exceed the pre-pandemic level, rising to 69.6 million. The number of international passengers is expected to reach 11 million by the end of this year, 10% below the 2019 level of 13.5 million. This number is also expected to reach 2019 next year.
“The return of mass outbound travel from China to the United States is very welcome news,” Fred Dixon, president and CEO of NYC Tourism + Conventions, said in a recent statement, referring to news of China lifting the national ban. “This is a critical step forward in the market’s eventual comeback.”
While tourists from China have not yet fully returned, Miniso, a Chinese retailer that sells toys, trinkets and other merchandise, has seen the benefit of embracing Times Square since opening its store earlier this year. With more than 5,500 global locations, Miniso said recently 5 Times Square The store “shattered” its previous sales records and set new records for first-day and first-month sales among its fleet.
The chain, which is described as a lifestyle brand, said it is on track to have more than 100 stores in the United States across 28 states by the end of this year.
In addition to Stubb, Newmark Vice Chairman Ariel Schuster and Senior Managing Director Ross Berkowitz have represented the wonderful world of Portuguese sardines in the Times Square lease. Maki Yamamoto of ARBA-L New York represented Tamashii Nations in the lease negotiations. Along with Rossignol, CBRE’s Anthony Stanford worked with Tamares Real Estate Holdings on that deal.