The dying mall in downtown San Francisco has lost its fifth store in a month after Madewell announced it would flee the ailing mall.
The clothing and accessories store said on its website that it would close its store on Monday.
Madewell follows its sister brand J. Crew as well as Adidas, Lucky Brand and Aldo, all of which have closed or plan to do so in the coming days.
The mall — now 75 percent empty — has lost a staggering $1 billion in value since 2016 as the beleaguered city struggles with rampant homelessness and rising crime. Comparable shopping centers typically operate at 93% capacity.
Nordstrom was the mall's anchor tenant, occupying 312,000 feet of multistory space in the mall. The August 2023 closure sent shockwaves through the large, upscale shopping center previously owned by Westfield.
The mall still has a large Bloomingdales – but all eyes are now on this retail giant to see if it closes up shop too.
The clothing and accessories store said on its website that it would close the mall location shown here on Monday
Shoppers leave the Westfield San Francisco Center on April 13, 2022 in San Francisco, California
Since then, retail stores have quickly exited the distressed mall, with businesses citing weak sales, declining foot traffic and downtown San Francisco's notoriously high rates of crime and drug use.
The shopping center is located in the crisis area of Union Square in the center of downtown, where businesses and tourists have been fleeing since the pandemic. San Francisco's tech-based economy means many locals continue to work from home – and the downtown area is now overrun with homeless people, drug addicts and related crime.
Pictures and videos taken at the once-bustling mall show it completely empty, with shuttered stores and little to no customers.
Its owners Westfield and partner Brookfield Properties lost control of the 5 million-square-foot retail and office complex to lenders last June and defaulted on a $558 million loan.
“For more than 20 years, Westfield has proudly and successfully operated the San Francisco Center, during which time it has invested significantly in the vitality of the property,” the company said at the time.
“Given the difficult operating conditions in downtown San Francisco, which have resulted in declines in sales, occupancy and foot traffic, we have made the difficult decision to begin the process of transferring management of the mall to our lender for appointment. “The insolvency administrator will take over the future management of the property.'
Gregg Williams of Trident Pacific, an Orange County real estate firm, was appointed receiver with the authority to collect rent and sell or liquidate the property.
Westfield and Brookfield, which stopped making mortgage payments last year, is now worth just $290 million, down 75 percent from seven years ago
According to Real Deal, the property's lenders have since advised the bankruptcy trustee to sell the mall to pay off the debt.
It opened with Nordstrom in 1988 and doubled in size in 2006 with a large, glitzy expansion that included Bloomingdale's as an anchor.
The mall collapse is part of a larger disaster affecting retailers across the city.
Nearly 100 retailers in downtown San Francisco have closed since the start of the pandemic, a decline of more than 50 percent.
Among the high-profile closures is accounting firm KPMG, which will move out of its namesake $400 million building.
The consulting and accounting giant first leased space in the 25-story office tower when the building opened in 2002. His name hangs above the entrance to the skyscraper where the company currently occupies more than 100,000 square meters.
KPMG originally acquired 90,000 square feet at 55 Second St. in a 10-year deal, marking the second-largest office deal of 2003.
Since then, its footprint has expanded to nearly a third of the 35,000 square foot building, which is why it is commonly known as “The KPMG Building.”
According to the San Francisco Chronicle, the company is now considering ending its two-decade relationship with the building. It is the latest tenant to move out of the city center.
Homeless people are pictured in San Francisco, California, USA on December 23, 2023
The shopping center is located in the crisis area of Union Square in the center of downtown, where businesses and tourists have been fleeing since the pandemic
In the first five months of 2023, preliminary reports show there were 346 overdose deaths in the city – an increase of more than 40 percent compared to the same period in 2022.
Economists have warned that the city is entering an “urban doom loop” – a vicious cycle of interconnected trends and forces that is driving cities toward economic and social ruin.
High theft has proven to be a problem in the area lately, and a downtown Walgreens decided to chain its freezers to stop shoplifters.
Retail stalwart Old Navy announced the closure of its flagship store in the area last month.
Anthropologie and Office Depot also made the same decisions.
These stores joined the growing list of stores that have left the coastal city, including H&M, Marshall's, Gap and Banana Republic.
A disturbing recent report showed that 95 retailers in downtown San Francisco have closed since the start of the COVID pandemic, a decline of more than 50 percent.
Of the 203 retailers that opened in the city's Union Square area in 2019, only 107 are still in operation, a 47 percent decline in just a few years hit by the pandemic.