Lou Martins is angry, frustrated, and disappointed but not surprised that the first Target store to open in Manhattan — in his New York City neighborhood — is closing in October.
Target this week cited large-scale theft and safety concerns for employees and customers for its decision to close nine stores in New York, San Francisco, Seattle and Portand.
“I’ve seen shoplifting happening in that mall, in Target. I’ve seen cops chasing people carrying bags of products out of the mall,” said Martins, who lives and works a block-and-a-half away from the the East River Plaza shopping center in New York City’s East Harlem neighborhood. That’s the area where the 174,000 square-foot big box Target has anchored the mall since it opened in 2010. The facility also has a Costco, Aldi and Burlington stores.
Martins and his wife Maria Gonzalez Arrieta own and manage Bistro Casa Azul, a restaurant on Pleasant Avenue and East 118th Street, a stone’s throw from the entrance of the mall. There’s no doubt that losing Target will be a blow to the community, he said.
“Having Target here helped revitalize East Harlem with hundreds of new jobs, customers and more services to our area. Now we’re going to have an empty box here,” he said. “Older residents depended on the Target for their essentials. They’re going to have to go further away to shop. It’s not easy for them.”
A domino effect?
He’s especially concerned that Target’s departure will create a troubling domino effect. “We’ve had drugstores closing here, too, because of shoplifting. What if other stores leave? I can feel it. People here are worried about crime getting worse, from shoplifting to more violent crime. As a community, we cannot allow this to continue.”
The retail industry said it is grappling with a particular type of store theft that is more dangerous than petty shoplifting, called “organized retail crime” or ORC. This isn’t a crime of need where an individual grabs an item or two, such as baby formula or food. It’s more insidious, and costly, according to companies and law enforcement.
ORC theft involves groups of people repeatedly targeting stores that carry higher-value merchandise like electronics, sporting goods, cosmetics, clothing, handbags and shoes. They steal large quantities of products and then resell them in secondary marketplaces, such as eBay, OfferUp and Facebook Marketplace or even back into the legitimate supply chain, according to law enforcement.
Target blamed ORC for the nine store closures, saying “we cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance.”
Leaving a gap
Alex Abreu shares Martins concerns.
Like Martins, Abreu is intimately familiar with East Harlem. “I know how this neighborhood was before Target came and how it changed after,” he said, noting he lived in the area from 2011 to 2017 and is currently a property manager for several residential and commercial buildings in the area.
“This was a very quiet neighborhood, nothing really to attract people to come here,” he said
It also lacked essential community lifelines, such as large and affordable supermarkets and small businesses.
Target came along with the East River Plaza mall, which previously was a dormant factory, according to The New York Times. Its arrival immediately boosted the neighborhood in several ways, Abreu said.
“We used Target in our marketing when apartments were being sold. One of the biggest attractions was that there’s a Target here,” he said. “Co-ops would list Target specifically to boost appeal. It brought up the value of whatever was being sold.”
“It was the most convenient thing in the world for the residents to have this big Target. There was nothing like it in the whole area,” Abreu said.
Crime is a problem
But crime, and what he’s observed of it, has gone up, he said. According to the most recent crime statistics from the New York Police Department’s 25th precinct, which covers the East Harlem area where the mall is located, shoplifting (classified as petit larceny, or theft of property valued at $1,000 or less) has jumped 47% over the past two years.
“You kind of turn a blind eye to it because it’s become commonplace,” he said. “We’re losing pharmacies in East Harlem because of shoplifting. We’ve lost a [Rite Aide], a Walgreens. The community is so angry.”
Business leaders, too, are expressing alarm after Target became the latest retailer to blame crime for pulling the plug on stores.
“The US Chamber is deeply concerned with increasing reports of stores closing in communities across the country due to large-scale theft and looting,” said Tom Wickman, senior vice president of state and local policy at the US Chamber of Commerce. “No store should have to close because of theft.”
The Chamber of Commerce said it is pushing for new legislation to close loopholes that let people sell stolen products and it is “calling on prosecutors to do their jobs and hold criminals accountable.”
“We call on policymakers to tackle this problem head-on before it gets further out of control,” Wickman said.
“Abuelitas were crying”
Xavier Santiago, board chair of Community Board 11, a neighborhood organization with volunteer members serving East Harlem, is absorbing the community’s anxiety about Target leaving.
“I personally saw people sobbing when they got the news. Abuelitas [grannies] who have been shopping at the Target since the day it opened in 2010 were crying,” he said. “If you don’t have the need for multiple paper towels or large containers of produce, Target fills that need to provide affordable and reliable groceries. It breaks my heart.”
Other than the residents, local businesses also rely on the foot traffic that Target generates, he said.
Santiago said he and other board members have witnessed organized retail crime occur, “where I’ve seen people run out and later in the day seeing [the] same goods with the Target tags attached selling on 116th street.”
“After speaking with the 25th precinct, if the police are able to apprehend them, they will be out within the hour or the next day,” he said. “We need laws to change to address these crimes.”
Communities consider next steps
Mark Cohen, director of retail studies and an adjunct professor at Columbia University’s business school, said communities will be on edge now, waiting for the other shoe to drop.
“Other stores in the mall could look to renegotiate their lease terms citing diminished foot traffic,” he said. While Target cited crime as the predominant reason to close the store, it’s not clear whether the stores were already under-performing or reaching their revenue goals. Target did not comment on this or provide data on theft at the stores.
Target previously said it was expecting to lose $500 million this year due to rising theft.
“The East Harlem store could have been doing very high volume in sales but still losing money because of theft,” Cohen said.
And finding a replacement tenant may not be easy, or quick, said Venkatesh Shankar, professor of marketing and ecommerce at Texas A&M University’s Mays Business School.
“These types of vacant commercial spaces are allocated for a specific purpose. It’s not easy to repurpose them for something else,” Shankar said.
Blumenfeld Development Group, the developer of East River Plaza, in a statement to CNN, pushed back aggressively against Target’s explanation for why it was pulling out of the East Harlem location.
The company said while organized retail crime “needs to be addressed as it harms the fabric of every retail center (corridor) in the city, it should not be used as an excuse by Target to mask business decisions designed to shift to a smaller store format or justify losses.”
Across the country, the mayor of Portland expressed his disappointment about the three Target stores closing, which the retailer also blamed on organized retail crime.
“It is disheartening to learn that Target has made the decision to close stores here in Portland and in other major cities nationwide,” Mayor Ted Wheeler said in a statement to CNN.
But shoplifting has jumped significantly in the city. Shoplifting offenses in Portland have spiked 53.9% from January to August this year compared to the same period a year ago, according to the latest data sent to CNN by the Portland Police Bureau.
“Every day, I hear directly from Portlanders who are concerned about workplace safety - perspectives that I take very seriously,” he said. “As we continue making strides to re-staff the Portland Police Bureau and partner on targeted retail theft missions, we are also implementing increased safety measures like enhanced lighting and foot patrols to create safer public spaces for everyone.”
–CNN’s Matt Egan contributed to this story
