The popular Spanish-based retailer had wanted to expand beyond its 10,000 square feet at 1715-17 Walnut St. because it had been performing “extremely well” in that location, but Center City-based commercial real estate company MSC Retail could not accommodate the request, said Douglas Green, a managing principal at MSC.
Green did not know the exact date that Zara closed, but said the company’s lease was up at the end of March.
“They wanted a significant expansion that we couldn’t accommodate,” Green said. As far as he knows, “they’re exploring other options in the city.”
Zara opened a flagship store in a 26,540-square-foot space at the King of Prussia Mall, owned by Simon Property Group, in fall 2018. It also opened a similar-sized store at the Cherry Hill Mall in September 2017. The company said the large King of Prussia location is “absorbing the smaller location on Walnut street and tripling our commercial space in Pennsylvania."
“The new flagship location allows us to offer an improved experience to our Philadelphia customers through a larger space and more modern shopping experience, fully integrated also with Zara.com,” company spokesperson Amaya Guillermo wrote in an email.
Despite the rise of online shopping, Walnut and Chestnut Streets, from Broad to 20th Street, are “prime retail corridors” with 95.5 percent occupancy, according to the Center City District’s 2018 report. But Philadelphia’s shopping streets are expanding east of Broad Street with large-scale projects such as Pennsylvania Real Estate Investment Trust’s and Macerich’s Fashion District plan to turn the former Gallery at Market East into a shopping and entertainment center.
Zara is not a tenant that PREIT is expecting at the September 2019 opening of the Fashion District, which PREIT chief executive officer Joseph Coradino said on a February earnings call is “85 percent committed.”