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Letter From Chicago: Indie City

One of the holiday bestsellers at Chicago's p.45, the pioneering specialty store on North Damen Avenue, wasn't the latest 'it' bag or designer dress.

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One of the holiday bestsellers at Chicago’s p.45, the pioneering specialty store that opened more than a decade ago on North Damen Avenue in the trendy Bucktown neighborhood, wasn’t the latest ‘it’ bag or designer dress.

It was a $32 black T-shirt bearing the profile of President-elect Barack Obama, with the word “change” on the back.


When the store, one of the city’s first to carry Rebecca Taylor and 3.1 Philip Lim, displayed the shirts during last fall’s election debates, customers rushed to buy them. When Obama won, p.45 owner Tricia Tunstall revised the shirt, designed by New York-based Illightenment, to say “yes we did” on the back.

For Chicago, as well as the rest of the country, Tunstall now looks to the city’s hometown hero to give further retail incentive.

“I think he’ll give people a sense of encouragement and confidence,” said Tunstall, who campaigned for Obama with local fundraisers and canvassed votes in Indiana. “I hope and I think we’ll have a surge.”

At least she and other local retailers can hope. After dodging some of the economic doldrums this summer, Windy City merchants joined the rest of the country, smacked by the plunging stock market and a particularly cold and snowy December. In fact, almost 22 inches of snow fell in Chicago last month, making it the seventh snowiest on record, according to the National Weather Service.

“It’s consistent with what’s going on in the rest of the country, which is horrific,” said Keven Wilder, owner of Wilder Inc., a retail consulting firm in Chicago. “This is an unprecedented recession.”

“With the economy and the weather, we kind of got a double whammy,” added Tunstall, who made no profit on the $32 women’s and $35 men’s Obama T-shirts, of which she sold about 400. The retailer countered the economy by tempering her buy, reducing the amount of higher-priced items and working with designers to create lower-priced pieces or, in some cases, buying on consignment.

While some national and international retailers launched units in Chicago (Michael Kors came to Michigan Avenue this fall with a second store planned, and jewelry designer Helen Ficalora unveiled a boutique along North Halsted Street in Lincoln Park, among other openings), other brands closed or relocated, including Betsey Johnson, which moved to Water Tower Place on Michigan Avenue after shuttering its North Halsted Street store in Lincoln Park.

“It’s a flight to safety,” Wilder said. “She was really smart to do that. She wasn’t willing to take a risk and we’re going to see more and more of that. There’s going to be a sameness across the retail landscape, and that’s going to be sad. We’re entering an era of entrenchment.”

Wilder looks to Obama for a lift: “I’m praying for Obama. So much depends upon him coming into office. No one knows if we’ve hit bottom yet. The bottom may come around in March when the second wave of foreclosures hits later in the year, but so much of it has to do with confidence.”

Even Chicago designer Maria Pinto, the incoming First Lady’s designer of choice, is playing her cards carefully. “We’re holding our own,” said Pinto, who opened her first store in the city this summer. “We don’t have a history to compare it to, but we’re trying to be as resourceful as possible.”

Pinto, who sold 10 gowns for the Inauguration (and is on the short list to craft Michelle Obama’s dress) said the new president could lessen fears by his presence alone.

“To hear his voice every day on the news,” she said, “he’s not going to fix everything, but he’ll create the optimism.”

One promising spot in Chicago’s retail environment appears to be State Street, where Anthropologie signed to open a 12,000-square-foot store at Block 37, a long-troubled project across from Macy’s on State Street that sat vacant for years. Now, Joseph Freed & Associates is developing the 400,000-square-foot project, with 280,000 square feet of leased space, to open this fall. Anthropologie will join Zara, Puma, Club Monaco, Lululemon, Aveda and Steve Madden in the 50-percent-leased Block 37.

Discounters like Loehmann’s and Nordstrom Rack are “success stories” along State Street, also home to Old Navy, a new 18,000-square-foot, three-level Ulta cosmetics store and H&M, said Andy Bulson, vice president for the Oakbrook Terrace-based Mid-America Real Estate Corp.

“It’s much more animated down there,” Wilder noted, pointing to the colleges in the State Street/downtown Loop area. “You have so many students downtown.”

Not to mention the estimated half million who descend upon the Loop each day. “It’s really going to be a happening place,” Wilder said. “The question is who’s going to go in first.”

In the meantime, specialty stores are getting creative.

In the new year, Tunstall will reach to out-of-town customers, who provided a boost in sales this holiday, and market to and entice more tourists. Wilder complimented the West Lake Street women’s boutique Koros, which offers a “wardrobe stretch” service to help clients reposition current pieces. “Small retailers need to look at what other services they can provide until this blows over in 2009, or worst case, in 2010,” Wilder said.

Peter Gill, spokesman for the Illinois Retail Merchants Association, said some stores implemented “bundling” — offering products free with purchase, to make room for spring merchandise.

While Gill considered 2008 “a pretty dismal year for most retailers,” some stores in the teen market performed well. “Teens don’t have the stock market to worry about,” he said. “It’s really about having the right styles and expressing themselves. You have to have the right product at the right time.”

And while Chicago retail overall may be down, it’s far from out.

With Obama, “It will get better,” Andy Bulson said, “but it will take time. The pressure on our business is very acute. It will take a couple of years. There’s so much vacancy, and a lot of that needs to be absorbed. But that comes after five years of huge expansion. That’s not sustainable. Everyone needs to readjust their expectations.”

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