Despite continuing economic and consumer worries, there’s still plenty of demand for top-notch retail real estate in New York.
“Retail rents are now well above their all-time highs, approaching $3,000 per square foot on [upper] Fifth Avenue and $2,000 per square foot in Times Square,” said David Greenbaum, president of Vornado Realty Trust’s New York division, on a conference call detailing the company’s third-quarter results. “The [New York] retail market is very strong, driven by the continued growth in tourism, which is expected to reach 52 million visitors this year.”
Rents on Fifth Avenue from 42nd Street to 51st Street have almost doubled over the last year, said Greenbaum. Vornado has also seen retail strength on Madison Avenue and in Times Square.
And the high-cost stores that pack into these prime spots are not just show pieces, he said.
“Some of our retailers…approached sales per square foot of $6,000, $7,000 and $8,000 a foot on some small stores,” Greenbaum said. “I don’t think these things are just ‘advertisements and branding.’ I think companies today, and especially a number of the fast retailers that do their own production, these stores really are making money for them.”
Although Vornado has been trimming its portfolio as of late, it’s holding onto its investment in J.C. Penney Co. Inc. The company teamed up with activist investor William Ackman and amassed a combined 26 percent stake in the retailer in October 2010. The chain is now being reinvented as a specialty department store under the guidance of chief executive officer Ron Johnson.
Vornado’s adjusted funds from operations were basically flat at $744.4 million for the nine months ended Sept. 30, but the company has taken a hit on its Penney’s position. The real estate firm logged a mark-to-market loss of $53.3 million on its Penney’s holdings for the nine months.
Steven Roth, chairman of Vornado and a Penney’s board member, said, “This year, which is the transition year, is a difficult year [for the retailer]. It’s actually no secret that it’s proving out to be more difficult than the management team thought….We remain committed to the investment.”
Vornado beneficially controls 23.4 million shares of Penney’s, or 10.7 percent of the company’s stock. Shares of Penney’s slipped 2.3 percent to $23.70 Friday — down from the roughly $28 the stock was trading at before Vornado and Ackman’s initial investment was made public.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion