By  on October 16, 2007

Luxury is the name of the game in an area with high household incomes and a taste for style.

WASHINGTON — The renaissance of the retail enclave straddling the border of Washington and Chevy Chase, Md., is thriving as new developments lure specialty retailers and customers.

The shopping area, which has about 1 million square feet of space, fashions itself as the Rodeo Drive of the East Coast and has been undergoing a major image overhaul for two years.

Anchored on one end by Saks Fifth Avenue, which opened in 1960, and on the other by Neiman Marcus, which bowed in 1978, the shopping district reached a new level of exclusivity when The Collection at Chevy Chase opened in October 2005, bringing to the area for the first time luxury retailers such as Christian Dior, Louis Vuitton, Tiffany & Co., Barneys Co-op, Cartier, MaxMara and Polo Ralph Lauren.

The Collection's 100,000 square feet of retail space, spanning two buildings, and another 100,000 square feet of "neighborhood" retail space became an instant draw for Washingtonians who often traveled to New York to shop because of the dearth of designer options in the metropolitan area.

"The ladies of Washington love to travel, whether it's to Miami or Paris, and when they can't get products they want here they go out of the market," said Paige Bishop of Bishop Emory, a consultant to The Chevy Chase Land Co., which owns and manages The Collection at Chevy Chase. "Now they are getting much more variety as far as the items they are choosing from."

That has translated into strong sales for the luxury stores, said Michele Cornwell, senior vice president of Chevy Chase Land Co. The company projected sales of $700 to $2,500 per square foot for the high-end luxury retailers in the Collection when it opened.

"Retailers told us they always look for three things in one place — tourism, high-end residential and dense office space," Cornwell said, noting that the Collection provided all three components.

Retailers continued to be lured to the area by an affluent population with an annual average income of $150,000, along with 19,000 daily commuters on the Metro subway system, 29,000 vehicles on Wisconsin Avenue and 24,700 vehicles on Western Avenue, according to the Ad Agency, a marketing research, advertising design and public relations firm representing several of the developments.Metro riders have access to the Mazza Gallerie, which offers Ann Taylor, Neiman Marcus and Filene's Basement, and the Chevy Chase Pavilion, with such stores as J. Crew, Ann Taylor Loft and Stein Mart underground.

The heart of the retail corridor encompasses about 2 to 3 square miles, said Chris Stewart, vice president and general manager of the Chevy Chase Pavilion.

Stewart said the average sales per square foot in the area, depending on the size of the soft goods retailer, ranges from $400 to more than $1,000.

The biggest project still under construction in the heart of the area is Wisconsin Place, which is owned by New England Development, Boston Properties and Archstone-Smith. It features 305,000 square feet of retail space, 432 luxury apartments and 290,000 square feet of office space.

Its anchor, a three-floor, 182,468-square-foot Bloomingdale's, opened to fanfare on Sept. 27, bringing more of the New York shopping experience to the region.

"The demographics were really calling out for retail," said Deborah Black, vice president of marketing and p.r. for Wisconsin Place. "It is a very affluent area with a great sense of taste and style, and they are really yearning for retail right in the heart of where they live and work."

The developers, who have only named two of the tenants — Bloomingdale's and Whole Foods Market — are in discussions with several specialty retailers and restaurants to fill another 75,000 square feet of space, dubbed The Shops at Wisconsin Place.

"New England Development is in discussions with retailers such as Stuart Weitzman, Eileen Fisher, Sephora, BCBG Max Azria, MAC, Talbots and Cole Haan," said Black.

She said some of the specialty retailers are slated to open in the spring, with the remainder expected to bow late next year or early 2009.

Mike Pratt, a principal with Washington-based Madison Retail Group, said he believes sales volume will continue to increase in the market once Wisconsin Place completes construction and is fully leased.

"It will draw people from wider areas," said Pratt. "The more critical mass on the specialty side and in bridge apparel, the more reason people will have to come to the market. A woman in Rockville, Md., or Baltimore might come to shop at Jimmy Choo, BCBG and Bloomingdale's and stop in at Neiman Marcus or Saks while she's there."Wisconsin Place and the Collection at Chevy Chase have acted as catalysts in spurring retailers with older stores to renovate.

Neiman Marcus underwent a renovation of its 130,000-square-foot store, which opened in Mazza Gallerie in 1978, from April to December 2006, partly in response to the new developments, said a spokeswoman for Neiman Marcus Group.

Retail growth in the area "precipitated the timing" of the renovation, she said. As part of the new look, Neiman Marcus installed five visual windows, replacing a flat external storefront. A large butterfly sculpture with reflective glass and light-emitting diode, or LED, color-changing lights was also commissioned by artist Lonnie Hanzon, who does work for Neiman Marcus across the country.

"We have never had a renovation of the Mazza Gallerie store as extensive as this one nor to the exterior like this one," said the spokeswoman, adding that the company did internal renovations two years ago when it also introduced an Hermès shop.

"With new luxury neighbors coming in, there has been an increase in foot traffic within the store, but particularly foot traffic on the street," the spokeswoman said. "It's always a sign of positive health when you see neighbors such as those coming into the area."

The Chevy Chase Pavilion has 150,000 square feet of retail space, 200,000 square feet of office space and an Embassy Suites Hotel, that recently underwent a renovation, said Stewart. Soft seating was added and the entire interior was painted.

"Over the years, we plan to invest more money in the Pavilion in an effort to reposition the asset to bring it more in line with some of the newer retail developments," Stewart said. "This market is about to blossom."

Retail and residential development continues to expand beyond the core shopping area.

Local developer Akridge has received approval from the city and is in the design phase of developing a "green" project on Wisconsin Avenue, said a spokeswoman.

The project, slated to break ground in mid-2008, encompasses 110,000 square feet, of which 13,000 square feet will be devoted to "neighborhood-serving restaurants and boutiques" and will include three to five retailers.The development will be built on a site that contains a used car lot, auto body repair shop and a flower store.

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