Scoop closes SoHo flagship

It's a sad time for New York fashionistas, on Friday May 6, Scoop closed their 10,000-square-foot SoHo flagship store at 473 Broadway. They are currently in the process of reevaluating other stores.

This is a red flag for the current retail environment. The retailer has been challenged with high rents and large footprints. Many of their leases were signed when the vacancy rates were lower, but rents have increased significantly since.

According to WWD, Scoop has 16 remaining stores, and business isn't doing poorly, as they have achieved margins of excess 46 percent in sales of more 1000 dollars per square foot on average. However, Scoop still can't manage to keep up with the retail rents.

The company has ruled out bankruptcy proceedings, but they are considering liquidation. Scoop executives have declined to comment on this story

Scoop first opened in 1996, and at the time it was one of the few retailers to offer contemporary brands. Since then, they have seen major competition from department stores like Nordstrom and Macy's, and specialty stores like Intermix.

In 2007, Scoop was acquired by Ron Burkle's Yucaipa Cos. Burkle has a mixed record of retail success and failures. He's had stakes in American Apparel, which he sold in 2011. He's had more successful endeavors with stakes in Sean John and Zac Posen.

The future of Scoop might lie in its ability to shrink its square footage and find more affordable leases. A challenge as retail rents, especially in Manhattan, continue to rise.