As fashion brand Michael Kors closes, major retailers continue to leave downtown San Francisco. This is further damaging the city's economy.
The company announced last week that it would close its San Francisco Center Mall store.
A sign posted at the store's entrance informed customers of the upcoming closure and directed them to the nearest Michael Kors store in Santa Clara, about 72 miles away. According to SF Gate.
A sign posted on the glass door on the ground floor of Michael Kors said, “This is not goodbye.”
“Michael Kors San Francisco has been a pleasure to share the best with you.”
The closure is part of a broader trend affecting San Francisco Center Mall, a 1.5 million-square-foot shopping center that has seen a series of high-profile retail exits over the past year.
Notably, the Adidas store that was a few doors down from Michael Kors closed in January 2024.
Other large retailers that have pulled out of the mall include Nordstrom, American Eagle, J. Crew, Hollister, Madewell, Lucky Brands and the Lego Store.
San Francisco Center was once valued at $1.2 billion in 2016, but its value plummeted to $290 million last year after loan defaults and the departure of major tenants such as Nordstrom.
Owners Brookfield and Unibail Rodamco Westfield have suspended payments on a $558 million commercial mortgage-backed securities loan, prompting the lender to seek a court-appointed receiver.
The property is currently under management management and managed by Trident Pacific Real Estate Group, which is responsible for operations, leasing, and rent collection.
These exits have led to increased vacancy rates within malls, reflecting the challenges facing retailers in the region.
As of January of last year, San Francisco Center Mall's vacancy rate was reportedly over 50%.
Its ripple effects extend far beyond the San Francisco center.
The Union Square shopping district, a historically vibrant retail hub, has also been affected.
Macy's announced plans to close its Union Square flagship store in March 2024, which will significantly increase the area's vacancy rate from 22% to an estimated 34.5%.
At the same time, Walgreens announced plans to close 12 stores in San Francisco by late February 2025, citing increasing regulatory and financial pressures that hinder its ability to cover operating costs.
The move is part of Walgreens CEO Tim Wentworth's larger strategy to close 1,200 stores nationwide over three years as part of a $1 billion cost-cutting program.
While San Francisco is suffering from an increase in commercial vacancies, security concerns such as theft and homelessness are also on the rise, further discouraging both consumers and businesses and contributing to the city's economic instability. This is the cause.
The city has also been hurt by the tech industry's shift to remote work, reducing office occupancy, weakening the city's financial base and impacting local businesses that rely on commuter traffic.
The newspaper has contacted Michael Kors and San Francisco Center Mall for comment.
