Marshalls on East Market is closing and will be replaced by another national chain

The Marshalls department store at 1044 Market St. in Philadelphia announced its imminent closure this week, leaving an over 25,000-square-foot vacancy.

But representatives of the building owner say that it won’t be empty for long after its Jan. 14 closure.

“We’re very close to signing a national tenant to replace them,” said Ken Bleznak, executive vice president with CBRE. “Our expectations are that that lease will be signed in January. It’s a retailer we have in Philadelphia, and they’re staying in the city and relocating.”

The closure of the Marshalls comes at a time of flux on East Market Street, where the office sector has not recovered from the pandemic, and the Fashion District Mall is struggling to attract shoppers.

Representatives of TJX, the company that owns Marshalls and several other retail brands like T.J. Maxx, would not comment on the reasons for the closure. They would say only that it is part of their constant analysis of sales and cost data.

“This is not part of a ‘larger wave of closures,’ ” said Erika Tower, vice president of communications for TJX. “We have grown our Marshalls store base this year.”

Tower said that 1,148 Marshalls stores were operating at the end of January 2022 and 1,171 at the end of October 2022.

She also noted that shoppers can go to the Marshalls in South Philadelphia, near John’s Roast Pork, or the T.J. Maxx across the street from the soon-to-be shuttered location.

Some observers of Philadelphia’s retail landscape were surprised by the decision to close the Marshalls on East Market.

“A Marshalls typically works anywhere,” said Larry Steinberg, commercial leasing agent with Colliers. “It’s hard to believe that they’re closing that big store. There’s a rumor that they’re going to replace it with another one of their brands. But right now, nobody really knows.”

But some Center City observers say that one place a Marshalls may not be primed to succeed is directly across the street from a new T.J. Maxx. When that brand opened in the Fashion District, there was not enough business for both, and the newer store ended up with far more of the sales. As the lease came to an end in the Marshalls space, it made sense to close the lower-performing outlet.

“They’re owned by the same company, that’s the right take on what’s going on,” said Paul Levy, head of the Center City District. “The larger issue is that the slow return to work has created a significant challenge for retail on the street. Contrast that with Walnut and Chestnut that are strongly rebounding because they have a mix of residential, office, and hospitality.”

Tower declined to confirm that interpretation.

The Marshall’s closure comes during an uncertain moment for Center City retail. Several large chains have closed prominent locations in recent months, including Starbucks, Wawa, Rite Aid, and H&M. Others are downsizing, like Barnes & Noble.

Although the overall retail occupancy numbers are strong, with independent businesses and restaurants flourishing, large spaces have proven more difficult to fill.

While Bleznak of CBRE could not comment further on the Marshall’s closure or what might be coming to the space, he warned against an overly gloomy interpretation of what it meant for Center City.

“I work all over the country and urban markets are a mess right now,” Bleznak said. “For some reason Philly became one of the national punching bags. But Philly is doing better than most, and it’s not much worse than the best.”