BANGKOK — More than 3 million square feet of new retail space is opening in Bangkok in the next two years, as the luxury brand market expands in the city center and community malls serving the mid-market sprout in the suburbs.
“It’s a retail revolution,” said James Pitchon, executive director of CB Richard Ellis Research & Consulting in Bangkok. “Twenty years ago, Bangkok retailing was just department stores and shop houses. It’s evolving in multiple directions. We’re seeing the death of the shop house.”
Much of downtown Bangkok’s retail construction borders the Skytrain, which zips shoppers in air-conditioned comfort through the city center above the clogged streets. Ragged, moldy buildings along the public transportation route at Sukhumvit Road are being torn down and replaced by luxury hotels attached to high-rise shopping centers.
One of the biggest projects is going up next to Central Chitlom, the flagship department store of Central Retail Corp., the largest retailer in Thailand. A $326 million, eight-story shopping center, and a 30-floor, six-star Park Hyatt Hotel are being built on 35 acres the retailer bought from the British Embassy. The complex will include 753,000 square feet of retail space, and 30 percent of that is expected to feature local designers from Thailand’s emerging design segment. Central Chitlom next door is under renovation and will connect to the new complex via a sky bridge.
The center, expected to open in 2013, is designed to appeal to the Asian market and not just Thailand, said managing director Chart Chirathivat. It’s part of a concerted effort by Thai retailers to compete against the upscale shopping districts in Singapore and Hong Kong.
“Thai retailers want to attract more tourists and shoppers from Asia, those people who would visit Hong Kong and Singapore,” said Suttatip Peerasub, a retail analyst at Kim Eng Securities. “Their target is high-end Thai people and high-end tourists. We still haven’t reached capacity for high-end shopping.”
One of the biggest drawbacks to the expansion of Bangkok’s luxury shopping is a 30 percent tax on luxury imports. In the midst of the worst flooding the country has experienced in decades, retailers have appealed to the government to repeal the levy. Calling the tax “quite restrictive,” Pitchon wouldn’t predict whether the government will respond to the luxury retailers.
With some 19 million visitors a year — 4.5 million of whom are from the nine ASEAN countries — Bangkok is well placed to position itself as a retail destination. The Thai capital is the third most popular destination in the world for international travelers, behind London, which ranks first, and second-place Paris, according to a May 2011 report by MasterCard Worldwide. The report shows that Bangkok ranks fourth in the world for visitor spending at an annual $14.4 billion. It follows London, which tops the list at $25.6 billion, New York City at $20.3 billion and Paris at $14.6 billion. Other cities in the top 10 are Frankfurt, Sydney, Los Angeles, Madrid, Singapore and Hong Kong. RELATED STORY: Luxury Booms in Latin America >>
Hotel occupancy rates in downtown Bangkok were 57 percent in the second quarter of 2011, according to a study by CB Richard Ellis Consulting. There are more than 30,000 hotel rooms downtown, with 10,000 more expected to open by 2014.
“There is growing interest in Thailand,” Pitchon said.
Luxury retailers first consider Singapore and Hong Kong, he said, but are increasingly considering Bangkok as its market becomes more sophisticated.
Bangkok’s high-end market is also growing as younger Thais want to live downtown. According to a 2011 report by CB Richard Ellis, there are 307,000 apartments and condominiums downtown, and this prosperous young generation is looking for places to shop. A Dean & Deluca gourmet food store is opening on the ground floor of a 34-floor office and five-star hotel building at the busy intersection of Witthayu and Sukhumvit. The intersection is blocks from the American Embassy and is surrounded by luxury apartment buildings. The Japanese retailer Uniqlo just opened its first Bangkok outlet at nearby CentralWorld, at 30,000 square feet its biggest in Southeast Asia. It plans to have 100 Uniqlo outlets in Thailand by 2020. Farther out of the city, on Bang Na-trat Road, Ikea just opened the first of three planned Bangkok outlets. Opening during the flooding, the retailer donated its $660,000 promotional budget to relief efforts.
Central Retailing and its sister company Central Pattana are planning to spend about $3 billion in the next year on new projects, many of which will be community malls in rural Thailand. Those projects include a one-million-square-foot mall in Surathani, a southern province in Thailand; renovations at a center in Udon Thani, in Thailand’s northeast; two new malls in Chiang Mai; rebuilding CentralWorld, the downtown mall that was burned by antigovernment protesters in May 2010, and a one-million-square-foot mall in Phitsanulok, in northern Thailand. Also, the one-million-square-foot shopping center CentralPlaza Grand Rama 9 is set to open next month in Bangkok, and a renovated Central Department Store at Lat Phrao just reopened after a $30 million renovation.
Farther down Sukhumvit Road, at the busy intersection of the Skytrain and Bangkok’s underground metro, is the new mall Terminal 21. Targeted at the 100,000 commuters who pass through the intersection daily, the six-floor mall has 600 shops. Each floor of the mall, designed to resemble an airport, represents an international city. Paris is on the mezzanine, and upper floors resemble travel landmarks in London, San Francisco, Tokyo, Istanbul and Hollywood.
Terminal 21, which cost $186 million, has 377,000 square feet of retail space, and management expects about 50,000 visitors daily. Terminal 21 executive director Prasert Sriuranpong said 80 percent of the center’s shoppers will be Thai people, but the airport theme is likely to attract tourists, as well. The mall focuses on fashion, food and movie theaters.
“For fashion, our concept is mix and match, and our shoppers will go to the big and small shops we have,” he said.
Another 10 blocks down Sukhumvit Road, construction of a 500,000-square-foot shopping center across from the upscale Emporium Mall has begun. The center, also slated to be a luxury shopping center, is to open by 2015.
MBK Plc, which operates MBK shopping center, a variety mall in Bangkok’s retail district targeting budget shoppers, also is expanding and plans to spend about $13 million in the next two years on new retailing, office and hotel developments, said vice president Sakchai Suthipipat.
“There is still room to grow in Bangkok,” Suthipipat said.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)