New York Retailers Eye Diverse Areas For Expansion
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1 March 28, 2016 New York Retailers Eye Diverse Areas For Expansion By Nikara Johns A rendering of the Neiman Marcus slated to open at Hudson Yards in Courtesy Image. It s been a rocky road for many New York retailers during the past few months, but storeowners large and small continue to make major statements in the city with new locations and expanded square footage. While Manhattan has long been a retail mecca, there are several new pockets of opportunity emerging. High-end players are marching uptown on Madison Avenue, and the corridor from 70th to 79th streets has become designer shoe row for hot up-and-comers such as Aquazzura and Gianvito Rossi, who recently opened alongside such luxury mainstays as Christian Louboutin and Giuseppe Zanotti.
2 About six miles south, downtown Manhattan continues to see a steady resurgence, with Saks Fifth Avenue prepping to debut in Brookfield Place this fall. The upcoming Westfield World Trade Center complex has lured Vince Camuto, Stuart Weitzman and others. Even as these diverse areas, as well as Midtown and Fifth Avenue, become more popular, other parts of the city, including Soho, are feeling pressure as higher rents and more vacancies spark anxiety. The department-store sector also is feeling the pressure, but that isn t deterring the biggest players from planting flags in the Big Apple. Nordstrom and Neiman Marcus will both unveil inaugural New York locations in the next few years, dramatically reshaping the landscape. There s no question that these retailers are betting on increased tourist traffic to drive sales. The numbers are working in their favor a record-high 59.7 million visitors are expected to hit the city, according to NYC & Co. but it remains to be seen whether they will be buying footwear and other fashion items based on recent trends. Retailers are complaining about foot traffic, but the visitor bureau is saying tourism is up. People who are here aren t necessarily shopping, said Karen Bellantoni, vice chairman at RKF, a commercial real estate firm. But this is the best shopping city in the world. It s not going away. Madison Avenue While the corridor has always been a hot spot for luxury, footwear retailers are expanding farther north like never before. After Gianvito Rossi set up shop on Madison and 75th Street last summer and Christian Louboutin significantly expanded the size of his boutique (which happens to be a few doors down from Rossi), Aquazzura will open its first New York door a block away this spring. Louis Leeman also debuted its Manhattan digs on 67th and Madison, while Giuseppe Zanotti just this month doubled the size of its location at 806 Madison Ave.
3 Giuseppe Zanotti s expanded flagship store on Madison Avenue. Courtesy of brand. We started our U.S. retail business in this same location in 2001, and this is our second expansion of our original space. This store is our most expensive per square foot lease, but we believe this is where we belong, said Alain Baume, president of Vicini USA. The Upper East Side clientele is extremely refined and fashion-savvy and prefers to shop uptown. Since the beginning, we believed that Madison Avenue was the best place to approach that type of [customer]. Neighbor Sonia Rykiel opened its first freestanding store in the U.S. in February. The Upper East Side has had a history with Sonia Rykiel for quite some time; in some ways, it is the New York counterpart of [Paris ] Saint-Germain-des-Prés, said Lola Rykiel, public relations director for the brand. Rental rates on Madison Avenue range from $1,000 to $1,850 per square foot, according to retail brokers. Madison Avenue continues to march forward. The push is north, said Faith Hope Consolo, chairman of The Retail Group at Douglas Elliman. It s a well-heeled residential area. People shop during good times and bad times.
4 Aquazzura s Edgardo Osorio, who makes the neighborhood s Mark hotel his home when he s in the city, said, This is the most prestigious address a brand can have in New York. It s a shopping destination for tourists, and it is very close to where many of our local customers live. When I was looking to open our first New York location, there was no second option. The high-end co-tenancy among retailers makes for a great statement, according to Bellantoni: They like to be near one another. Lower Manhattan As one of the city s fastest growing locations, Lower Manhattan has become a much bigger player on the retail scene during the past few years and the area is buzzing with activity. While some players have bemoaned the lack of traffic at Brookfield Place which currently houses 300,000 square feet of retail the center should get a boost when Saks Fifth Avenue opens in early fall. Marc Metrick, president of Saks, said, Downtown Manhattan is on a fast track to becoming the epicenter for luxury in New York. We felt this development represents so much of what the Saks evolution is about. Cementing our leadership position [here] remains paramount, and this opportunity was great. It s definitely an area that has had a resurgence and vibrancy going on about it, said Amira Yunis, EVP of CBRE Retail Services Group. When it debuts later this year, Westfield World Trade Center will be home to 365,000 square feet of retail, including Vince Camuto, Stuart Weitzman, Dune London, Aldo, John Varvatos, Under Armour and H&M. Rents in Brookfield Place and Westfield World Trade Center range from $350 to $500 per square foot. A rendering of Westfield World Trade Center mall in Lower Manhattan. Courtesy of Dbox Inc.
5 This is an exciting retail development opportunity with a massive transit hub connecting all five boroughs, said Ed Ferrell, president and chief merchandising officer at Camuto Group. The formula of a major center, along with high traffic, was a logical choice. Bellantoni said all the right ingredients are in place for Westfield to be a big shopping draw: People are moving down there, offices are [relocating] there, so it s a desirable area to live and shop. Fifth Avenue and Midtown As an unrivaled shopping street, Fifth Avenue remains a popular destination for leasing activity. Fifth Avenue, even in not-so-good times, has always retained its value, said Consolo. Late last year, Adidas leased more than 30,000 square feet of space on three floors at 565 Fifth Ave. Coach and Victoria s Secret will also make their way to the Upper Fifth Avenue shopping area, 49th through 60th streets, which continues to command the highest asking retail rental rate in the world at nearly $3,500 per square foot, according to a report by brokerage Cushman & Wakefield Inc. To celebrate Coach s 75th anniversary, the brand will bow a flagship store at 685 Fifth Ave. In addition, a Stuart Weitzman flagship store will debut adjacent to the shop. Both are expected to open this fall. An illustration of Manhattan. Bodil Jane. On East 57th, between Lexington and Park avenues, is the newly opened Saks Off 5th, which debuted on March 3.
6 The appeal is the varied traffic, said Consolo: They get the mass-market shopper, the luxury shopper. They get all age groups and all economic levels. There s something for everyone. While Upper Fifth Avenue remains hot, new retailers are starting to push below 42nd Street, Yunis explained. The market is also seeing a specific interest from athleisure and athletic brands looking for space. Said Bellantoni, Clustering of like-minded retailers is key to a neighborhood. One highly anticipated store debut comes from Nordstrom in 2018, along with its reported plans to open a stand-alone men s store near Columbus Circle. Its first NYC Nordstrom is located on 225 W. 57th St. This is Billionaires Row, said Consolo. It s going to be almost as valuable as 57th Street East. There s commercial development, convergence and a huge cross section. Want More?
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