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Retail chains and restaurants have left an “unsustainable” New York City in recent months due to the coronavirus pandemic, according to a New York Times report; however, officials say they may not know the extent of the losses until the fall.
New York Gov. Andrew Cuomo lobbied to reduce the geographic footprint of the inhabitants as the centerpiece of his pandemic containment policy, restricting the three-state area so that New Yorkers would be discouraged from going even to neighboring states. Cuomo’s policy, along with a statewide blockade, has managed to flatten the curve, while New York was the national hot spot for the virus in the United States.
However, relief in pedestrian traffic due to lack of tourism and increased telework has produced a market environment that apparently cannot maintain the same revenue source point for companies of any extension. More than 420 corporations, adding Hertz, Lord and Taylor, J Crew and others, have already filed for bankruptcy by 2020, and more will remain as things stand.
JULY RETAIL SALES SLIGHTLY BELOW EXPECTATIONS
Because of pandemic containment policies, some have noticed up to 85% relief in their earnings, according to the New York Times. The Bryant Park Grill-Café has been forced to move from an indoor capacity of 1,000 seats to a terrace-only service, reducing profits to about $12,000 a day, a fraction of its usual or consistent meals.
“There’s no explanation for why doing business in New York,” Michael Weinstein, executive leader of Ark Restaurants, Bryant Park Grill’s parent company, told the Times. “I can do the same volume in Florida on the same square footage as in New York, my expenses are much lower.”
As a result of these competitive cuts, national chains such as J.C. Penney, Kate Spade, Subway and Le Pain Quotidien have closed branches permanently. Prestigious places have closed while they were still operating in other states, largely due to rental needs in the city.
CORONAVIRUS COULD BRING BANKRUPTIONS TO THE WORST LEVELS IN 10 YEARS
“We have two hours for lunch and 2:30 for dinner to earn our money,” said Jay Gentile, chief operating officer of Veggie Grill. “We paid a very high rent. It’s unbearable.”
New York City Mayor Bill de Blasio is aware of the situation, having taken steps to verify the recovery of companies.
“In reaction to COVID-19, we have activated resources to establish new lines of origin and paints with corporations to produce fabrics we’ve never had before and have provided assistance and technical assistance to our small businesses,” said City Council spokeswoman Julia Arredondo. on FOX Business. “New York City’s businesses are strong, creative, innovative, resilient, and are stepping up their efforts to build their long-term here.”
Arredondo highlighted recent successes, such as Facebook’s signing of a 730,000-square-foot lease in Midtown Manhattan or Steiner Studios’ commitment to build a 500,000-square-foot production studio as a component of the city’s Made in New York campus.
Large corporations are better able to take over the profit crisis, New York Chamber of Commerce President Mark Jaffe told FOX Business. He said many small businesses are in trouble and have closed permanently due to trade cuts, and others are expected to close in the near future.
HOW IMPORTANT IS THE NEXT STIMULUS PACKAGE FOR THE MARKET?
“For many small businesses, this scenario breaks them,” Jaffe said. “Politicians have suggested to others stay home, without replacing their income, and they have been paid more to stay home. By our calculations, anyone earning less than $50,000 a year benefited best from unemployment relief.”
Jaffe stated that the total number of abandoned instances is “significant”, the Chamber of Commerce does not yet have a definitive statistic to refer to.
“People are still deciding,” Jaffe said. “We can’t even get school unions to settle down if they’re going to open schools.”
CORONAVIRUS HAS LEFT THESE RESTAURANT CHAINS WITH A HIGHER LIKELIHOOD OF NON-COMPLIANCE
“They say, “We have 3 weeks to open schools.” For a small business, 3 weeks is a life,” he said.
Jaffe said the House will conduct an investigation in September to get a complete picture of the damage that closures and restrictions have caused to the city’s economy.
The New York State Department of Labor also told FOX Business that it has no knowledge of business outings in recent months, and will have it after the next quarterly report.
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On the department’s website, state employment and wage knowledge is only measured until the end of 2019, which means that the full picture at the state point, in terms of loss of income source in any state city and point, may not be transparent until 2021.
Governor Cuomo did not reject requests for comment.
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