By  on July 19, 2010

CHICAGO — Oak Street, long a mainstay of luxury here, is undergoing one of its most significant transitions in decades.

In the fallout from the recession, stores such as Yves Saint Laurent, Ultimo, Frette, Chasalla and Me & Ro have closed, creating more vacancies than at any time in about 30 years, real estate brokers said.

“It certainly looks dejected at this moment,” said Bruce Kaplan, who specializes in retail as senior vice president for CB Richard Ellis, Inc. “I’m sure if you’re shopping on the street you’re wondering what’s going on. It looks worse than what it really is.”

Those empty storefronts, however, are creating opportunities for other global fashion brands as well as local retailers who are taking advantage of lower rents. Hermès has vacated its 3,000-square-foot Oak Street store just off Michigan Avenue to move west, more than doubling its space to 7,000-square-feet at Oak and Rush streets.

This fall, more international retailers, including Moncler, Italian jeweler Pomellato, Vince and Bonpoint, a high-end French children’s brand that sells girls embroidered cotton dresses for $220, are to open. They will take their place among neighbors such as Prada, Barneys New York, Jimmy Choo and Tod’s. “Oak Street is going to get made over,” Kaplan said.

With its exclusive neighborhood feel, Oak Street is not only known for its luxury retail but also for fine jewelry with Graff, Harry Winston, David Yurman, Judith Ripka, Trabert & Hoeffer and Lester Lampert.

For Hermès, staying on the street was important, said Robert Chavez, president and chief executive officer of Hermès USA. “It’s the right ambiance for us. It’s like a little neighborhood. It’s very cozy and calm. Our clients like that.”

Hermès first opened on Oak Street in 1989 in a converted townhouse just off Michigan Avenue. “At that time, the key weight of the street was there,” Chavez said, noting that now the hub of Oak Street activity is at the west end of the block at the corner of Oak and Rush streets, where Barneys New York, Prada and the new Hermès are located.

The new shops, Moncler, Pomellato and Bonpoint, are at this end of Oak Street. Loro Piana is also moving west on Oak Street to more desirable, street-level space. Most of the new tenants will fill the closed Barneys New York and its former Chelsea Passage housewares space.

Barneys moved into a new 90,000-square-foot space last year, doubling its size. Historically, luxury brands jockeyed over hard-to-find square footage on the street where much retail space is in multi-floor converted town houses, leading many retailers to wait years for the right sized street-level location.


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