Tuesday, April 23, 2019

Kate Spade closes at Bethesda Row as the rich continue to flee MoCo

Kate Spade New York closed at Bethesda Row Monday, yet more evidence that high-tax Montgomery County no longer possesses the concentration of ultra-wealthy residents to sustain such high-end boutiques anymore. The closure put a harsh, laser-beam spotlight firmly on Montgomery County, as there are no media reports or corporate announcements of Kate Spade stores closing elsewhere in the country.

Despite the localized nature of MoCo's moribund economy and dwindling "1%," Kate Spade the company didn't come off well in the closure Monday, either. I first heard that the Bethesda Row store would be closing from a reader who shops there on Sunday night. She had received an online notification that the store would be closing, which did not give a closing date. When I attempted to get a comment from the corporate office of Kate Spade early Monday morning, the handbag brand was clearly in denial.

The company would not answer emails all day Monday. A Kate Spade representative in an online chat feature on their website said she had no indication the Bethesda Row store was going to close.  I then called their store at Bethesda Row. Over several attempts, no one answered the phone, which kept ringing and ringing. Meanwhile, pressing 1 during the call would still prompt a voice recording of a chipper employee reciting their street address and operating hours.

Finally, I went to the store in person. It turned out the company had been pretending all day that the store was still open for business, when in fact - while they were telling me this - local contractors were removing the sign from the storefront and covering the boutique's windows. This was misleading to both customers and journalists.
Inside Kate Spade Monday
While Bethesda Row isn't yet becoming Skid Row like the once-touted "Montgomery County's Rodeo Drive" in Chevy Chase, the departure of Kate Spade is a major "check engine light" event. With new retail tenants like LensCrafters in the works for Bethesda Row, it's clear that the market is moving downscale, as the rich continue to flee Montgomery for lower-tax jurisdictions in the region.

Revenues for the County government continue to decline, even as property taxes have increased each year, and taxes are now at a record high for Montgomery County taxpayers. This is an obvious indication that the uppermost tier of the tax base has been sharply reduced. We are now in a downward spiral, where no matter how much you jack up taxes, you are going to get less and less revenue over time. And we have an ongoing structural budget shortfall, as far out as the projections go.

If things seem bleak now, with Montgomery at rock bottom in the region by every economic development statistical indicator, imagine what will happen if the country falls into a recession in the next few years. As I've warned since 2010, we can't go on like this. We must grow our lagging commercial business sector, to recover all of that lost revenue we are currently ceding to booming job centers in Northern Virginia. We need more boardrooms, not more bedrooms. And we must lower our Draconian taxes to levels competitive with rival jurisdictions, so that the wealthiest part of our tax base can begin to return and supply the revenue we need. Finally, we must cut spending drastically, before the County goes bankrupt, which could easily happen now if we have another Great Recession.

Montgomery County Public Schools, as we learned again during a classic Friday "bad-news" dump by MCPS, are continuing to sharply decline along with graduation rates. Our archaic County government liquor monopoly is causing us to lose massive amounts of liquor sales and nightlife revenue to D.C. and Virginia. Our incompetent County Council and their Nighttime Economy initiative ended up tanking the nighttime economy in the County with record numbers of nightspot closures, which caused other businesses to slash late-night hours, and left streets quiet and dark in urban areas after 9 or 10 PM. And our belligerent, radical County Council, pursuing a far-left ideological "War on Cars," continues to oppose completion of our master plan highway system, Express Lanes, and a long-planned new Potomac River crossing.

As a result, Montgomery County hasn't attracted a major corporate headquarters in over two decades. We are in real trouble, folks. Can enough residents wake up in time to stop the Montgomery County cartel before they take us over the financial cliff? Or will we just keep going the way we've been going, badly managing a decline, slouching towards disaster?

54 comments:

Anonymous said...

Kate Spade's latest earnings report, issued Friday, wasn't great. They swapped designers recently b/c sales were down across the board. They are shifting toward outlet stores and away from regular retail stores--count stores on their site and watch opening announcements and that's clear.

Anna said...

Home sales are robust in the area, so if they're really leaving for good, others must be taking their places.

All this complaining is sour grapes.

Robert Dyer said...

5:42: Not true. While Kate Spade's performance declined after the brand was sold several years ago, there are no publicly-announced store closures besides the Bethesda store's abrupt closure.

5:43: Who do you believe? An anonymous troll, or every major federal economic statistic showing rock bottom performance by MoCo, and the specific dollar amounts in millions that fleeing residents have taken with them to each surrounding lower-tax jurisdiction?

We are literally behind little counties like Culpeper and Rappahannock. Humiliating!

Anonymous said...

The company's founder and namesake died last June. Cause of death was "suicide of hanging", at the age of 55. :(

Anonymous said...

When I saw that today's article was running way past its deadline of 5:00 AM Dyer Time, I knew there was some precious Argle-Bargle in store. And I was not disappointed.

Anonymous said...

How are you so certain that local economic factors are the primary reason for these closures, rather than an under-performing brand, or consumer preferences shifting from brick and mortar to online retailers? I'm not exactly seeing blocks of vacant retail spaces in downtown Bethesda...

Robert Dyer said...

5:49: Very sad, but for anyone who is unaware, she had not been involved with the Kate Spade company for several years; she sold it long before her untimely death.

Robert Dyer said...

6:01: I'm certain because there are no other reports of Kate Spade store closures around the country, currently or planned.

You might want to turn down some different streets, as there are many long-vacant storefronts around downtown Bethesda.

Anonymous said...

Why no mention of the landlord, Federal Realty? You mentioned two of their properties in Bethesda Row - Kate Spade and the LensCrafters coming to where Lebanese Taverna used to be.

Federal Realty is probably just marking time with their one-story buildings on the south side of Bethesda Avenue and their two-story building at the corner of Woodmont and Bethesda Avenue, until they can build much larger buildings there.

Robert Dyer said...

6:10: I wouldn't call high-end stores like Kate Spade and Williams Sonoma as "just marking time." Moreover, their actual plan for the next phase of Bethesda Row leaves those Bethesda Avenue shops in place, and builds behind and above them on the surface parking lot back there.

Anonymous said...

Isn't Williams-Sonoma where the "nightspot" Parker's used to be, one of the "16 nightspots closed by Hans Riemer's #WarOnTheNight?

Anonymous said...

I find it entertaining when Dyer manages to shoehorn every single store closing into his inane "moribund economy" narrative, yet fails to mention the economy when a store opens. Sometimes I really wonder if he actually believes some of the nonsense he writes or is just trolling.

Robert Dyer said...

6:22: Yep. And your point is?

6:36: Stores open in good times and bad. But we've had a net loss of retail jobs since 2000, according to the Maryland Retailers Association.

Just more of your crazy, Saul Alinsky "hey, look over there!" argle bargle.

All the federal stats back up my assessment of our economy as moribund, and our budget deficit speaks for itself.

Anonymous said...

Dyer's original claim:

"Montgomery County has suffered a net loss of more than 2100 retail jobs since 2000, according to the Maryland Retailers Association."

Looks like Northern Virginia did in one year, what it took Montgomery County nearly 20 years to do.

Anonymous said...

Robert Dyer: "Montgomery County has suffered a net loss of more than 2,100 retail jobs since 2000, according to the Maryland Retailers Association."

Northern Virginia
Employment Change by Sector
July 2017-July 2018

Retail Trade: DOWN 1,900 jobs

https://www.fairfaxcounty.gov/budget/sites/budget/files/assets/indicators/2018/10.pdf
(Page 6 of 6)

Looks like Northern Virginia did in one year, what it took Montgomery County nearly 20 years to do.

Robert Dyer said...

7:17: What a moron! You don't even understand the difference between a job loss, and a net loss of jobs. How many jobs were CREATED in Northern Virginia in the last two years, five years, ten years, twenty years?

(Hint: in any time period this century, NoVa created many times the number of jobs as MoCo.)

Your premise is totally #FakeNews.

Remember, Fairfax alone and D.C. EACH created a net gain of 3000 business enterprises this decade. Over the same decade, Montgomery County had a net gain of only 6. Six!

Humiliating!

Anonymous said...

Losing retail jobs isn't necessarily a bad thing. Stores have gone to a lot more automation lately, particilarly self checkouts. I'm sure things like MoCo's asinine $15/hr minimum wage have increased that change.

Robert Dyer said...

7:22: No doubt about the minimum wage impact - touchscreen ordering at fast casual and fast food restaurants is now almost as ubiquitous as the "Going Out of Business!" signs in windows around the County.

Also, a $1.00 small fries is now over $2.30, and a ONE PATTY Quarter Pounder with cheese deluxe was $5.98. Prices have clearly skyrocketed after the "fight for $15."

Anonymous said...

Fine Dinning With Bobby D. LOL

Anonymous said...

"a ONE PATTY Quarter Pounder with cheese deluxe was $5.98."

"ONE PATTY" of a Quarter Pounder (4 oz.) weighs 2.5 times as much as the patties used in all the other burgers (1.6 oz.). You get 25% more beef in a Quarter Pounder than you do in a Big Mac.

Anonymous said...

Basic arithmetic?

Sorcery!

Anna said...

The WSJ had a recent article about Tapestry missing their holiday benchmark. Coach's sales gained slightly and Kate Spade's declined a pretty fair amount (15% maybe? something like that. Coach gain was single digit and KS loss was double digits.)

Robert Dyer said...

7:44: No kidding - but the price is significantly higher than what a single-patty Quarter Pounder with cheese used to go for in recent years. Massive price hikes passing the "free lunch" $15 minimum wage onto us, the customers.

8:00: Kate spade has faded compared to years past, but what makes the Bethesda closure point to local issues is that it is the only Kate Spade store in the nation to close, as far as I can find.

Anonymous said...

Expect several more high profile nightlife closures in Bethesda and the county in general.

Folks on Reddit already report Buffalo Wild Wings is closing in Rockville Town Square.

In Bethesda, anyone who has been in some of the long time bars on a weekend night know empty they are. Some old favorites will be shuttering for sure.

Anonymous said...

8:18 AM Stay tuned for some of Bethesda's venerable bars to be shuttering.

Anonymous said...

Saith Dyer: "What a moron! You don't even understand the difference between a job loss, and a net loss of jobs. How many jobs were CREATED in Northern Virginia in the last two years, five years, ten years, twenty years?"

And you can't analyze statistics for shit.

You cited the loss of RETAIL jobs for Montgomery County, for a 19-year period.

I responded with the loss of RETAIL jobs for Northern Virginia, for a single year, which nearly equaled the loss over 19 years for Montgomery County.

You responded by moving the goalposts to ALL jobs for Northern Virginia.

Northern Virginia LOST 1,900 retail jobs in just one year (July 2017-18).

They created (net) 13,700 jobs OVERALL. That means that if not for the loss of 1,900 retail jobs, the net gain in jobs would have been 15,600. Meaning that the loss of the retail jobs reduced the overall gain in jobs by 12%.

Robert Dyer said...

8:36: In other words, just as I said, Northern VA enjoyed a net GAIN of 13700 retail jobs during that period.

In contrast, we lost more than we gained since 2000, a net loss of over 2100 retail jobs according to the Maryland Retailers Association.

Northern VA crushed Montgomery County, as usual. They had a massive net gain, and we suffered a net LOSS.

Robert Dyer said...

8:51: True facts: Kaldi's posted an ad online to auction off equipment and furniture, an ad which stated clearly the restaurant was "closing its doors forever."

The only error was Kaldi's. They posted the ad. They misspoke about the status of their own business. They take all the blame.

Now you need to hire an ex-con to get you ready for federal prison - 2 years for each instance of harassing and threatening me. You're going to the Big House, "ya big baby."

Anonymous said...

"In other words, just as I said, Northern VA enjoyed a net GAIN of 13700 retail jobs during that period."

My God, Dyer, you are such a fucking idiot. 13,700 is the number for the net gain in jobs for ALL sectors between in Northern Virginia between June 2017 and June 2018.

The RETAIL sector LOST 1,900 jobs in Northern Virginia between June 2017 and June 2018.

Just stay the hell away from anything that has a number in it. You're completely incapable of numerical analysis or even basic arithmetic.

Robert Dyer said...

8:59: Nope, that's you, moron. A loss isn't a "net loss." A loss is just how many you lost. You have to put it up against how many jobs they created/gained in order to determine if they had a NET loss or NET gain.

Ultimately the question is moot, as in recent years, both Loudoun and Fairfax each ALWAYS outpace us in jobs created each and every year. Bigly.

Anonymous said...

9:08am "Anna" you're a troll and have exposed who you are several times by talking about meetings and such you've attended. Why you post as a woman is up to you.

Anna said...

9:12AM you know very well that's a lie.

“When the debate is lost, slander becomes the tool of the loser.” - Socrates

Anonymous said...

If you reference meetings with a small set of attendees then cross reference with who are the men that resent Dyer, you come up with the guy who posts as "Anna" and other aliases here.
Not that hard. I just hope his employer is eventually contacted with all of this inflammatory stuff.

Anonymous said...

9:20AM MoCo economy so moribund that even self proclaimed Bethesda blogs are based in Northern VA.

Anonymous said...

Speaking of moribund, the Council has stopped talking about White Flint- I guess they've realized it won't be our county's "downtown" or even Tysons Lite.

Wonderful hole in the ground instead of the mall (walking tour needed?). The folks in the surrounding neighborhoods (like Randolph Hills) were fleeced and those responsible all packed up and left.

Anonymous said...

"Speaking of moribund, the Council has stopped talking about White Flint- I guess they've realized it won't be our county's "downtown" or even Tysons Lite."

Pike & Rose is chopped liver?

Anonymous said...

9:28 AM There was a verifiable source. Not just making stuff up out of whole cloth like other mall walker blogs.

Anonymous said...

9:29 AM Apparently Amazon thought so...

Has anyone done an analysis of how big of a screwup our HQ2 proposal was? Politically, the Council needed a win at White Flint, but it was a terrible choice when we have Wheaton, Silver Spring and Bethesda all better choices.

White Flint is utterly suburban and gridlocked.

Anonymous said...

9:40 AM Sears was FURIOUS. [Mallwalker blog of your choice] could have avoided this by calling them.

Anonymous said...

"A lengthy federal investigation has blamed faulty gas venting equipment as the likely cause of a 2016 explosion that leveled a Silver Spring apartment building, killing seven people and injuring 68 others.

"During a Tuesday meeting in Washington, a four-person National Transportation Safety Board panel outlined the history and probable cause of the explosion at the Flower Branch apartment complex, capping a nearly three-year investigation.

"A disconnected pipe bypassed a safety feature intended to ventilate gas from the basement to the outside, according to the report.

"NTSB staff said Washington Gas, the Virginia-based company that provided services to the 14 apartments on Arliss Road, was responsible for maintaining the vent line that likely caused the explosion."

Oops...there goes another one of Dyer's treasured narratives.

Anonymous said...

Robert, its a damn shame your aren't rich!

Anonymous said...

9:52 AM Sears was claimed to be closing a year before it did (Dyer broke the story on the real closure date)

Kaldi's posted an auction ad claiming they were closing

Tastee Diner was selling, but Woodmont Grill wasn't which meant no Tastee sale (confirmed by Marriott spox at a public meeting)

Roald said...

I love what Dyer is doing for MoCo with his reports

Great constituent service too.

Robert Dyer said...

9:48: Sounds like a Mueller report summary - let's see the actual report, and if it gives Robert Dyer a roadmap to impeach the County Council. RESIST!

Anonymous said...

And even if Dyer had been elected to the Council, as one Council member out of eight, he'd have a heck of a time trying to impeach the rest of them all by himself.

Anonymous said...

You Dyer-haters sound like a conversation in a Psycho Ward. Get the fuck out if you hate the man so much.

Anonymous said...

An interesting article how Unibail, the new owner of Westfield (and Montgomery Mall), are proactively kicking out the lowest performing tenants every year. They boot the bottom 10% each year to encourage a better mix of tenants. They seem to believe a vacant, available or coming soon sign in a storefront is better than an underperforming tenant that reduces the quality of the mall, and begs for rent reductions to hang on. They also believe in more mixed use developments, like the modifications that are proposed at the now closed Sears Store at the Montgomery Mall, adding open air retail, winter gardens, hotels, dense residential and other mixed uses that simulate an urban downtown.

This behavior might explain some of the retail and restaurant churn we are seeing at the mall.

A very worthwhile read:

https://www.bisnow.com/london/news/retail/the-worlds-second-biggest-retail-owner-is-kicking-tenants-out-98588

Anonymous said...

11:06 Wow, that's a really dumb idea. Just "management trying to look busy". Playing musical chairs on the deck of the Titanic, to mix metaphors.

But looking at the mall map they appear to have more than just 10% of stores vacant - it seems closer to 30% overall, and higher than that for the first floor by itself.

Anonymous said...

12:42 PM WTOP's coverage of the MoCo elections last year was non existent.
Not a real news source. I'm sorry. Stick to weather and traffic on the 9s.

Rugby said...

1:10PM I hope you secretly love Robert Dyer.

It would suck to have to spending all day posting "hey what about what I posted on my mystery shopper Wix site" here if you really hated him.

Oscar said...

I’m a small truck business and I was told by police that Montgomery county doesn’t want small businesses here and that’s why they are getting rid of all commercial vehicles out of the streets even in the commercial areas very disappointing since our taxes are really high as well.

Anonymous said...

"Oscar"

"On Blogger since April 2019"

Anonymous said...

Dyer, how could the folks at jeni’s miss the obvious signs? You better warn them.

Victoria D. said...

Thank you for clarifying. The comment this is in response to was off-topic and unnecessary.