NIKE TOWN IS EXPECTED TO TAKE GALERIES' SITE IN NEW YORK THIS FALL

Byline: Dianne M. PogodaWith contributions from Godfrey Deeny, Paris

NEW YORK--Au revoir, Galeries Lafayette. Hello, Nike.
Nike Town, the sports superstore, is expected to take over the 80,000-square-foot space occupied by Galeries in Trump Tower this fall, it was learned Monday. The move would add another high-profile player to the luxury corridor at Fifth Avenue and 57th Street, adding to the changing profile of one of retailing's most elite intersections.
Neither Donald Trump nor Nike
officials would confirm the deal Monday, and George Graf, president of Galeries here, did not return a call seeking comment. There have been numerous reports that the beleaguered Galeries would be closing soon and that Nike would replace it, the most recent of which was published in these columns on page one, Aug. 18.
In Paris, where Galeries is headquartered, president Georges Meyer said, "I have heard nothing about this. I'd better call New York. We are continuing with our store. Sure, one day we'll close, we have indicated that. Right now, we are looking for a solution, but nothing has been done as of today."
Asked if he knew anything about Nike taking space in Trump Tower, Meyer replied, "Trump Tower is a pretty big place. There should be room for Nike."
Until last fall, the area around Fifth Avenue and 57th Street was noted exclusively for its luxury image, characterized by establishments such as Bergdorf Goodman, Tiffany, Chanel and Bulgari. Then, in October, the Warner Bros. Studio Store opened and became a mecca for mobs of tourists who were drawn by the store's larger-than-life cartoon characters and its carnival-like atmosphere of fun.
The three-level store, Warner's flagship, has been bringing in the crowds ever since, but it has also dramatically changed the character of the street.
Now, Nike--whose superstores, with their basketball courts and sound effects of cheering crowds have become magnets for sports aficionados of all income levels--is poised to spring upon the scene.
"Warner Bros. may have changed the type of crowd a bit, but it hasn't hurt our business," Stephen Elkin, chairman of Bergdorf Goodman, said Monday. "It's a positive for the people who are interested in both our type of product and theirs. Nike will certainly bring more traffic, whether it will be people interested in our product, too, is hard to say.
"The street seems to be thriving," he added. "Nike and Warner might have some dilutionary effect to some of the European shops, but they [Nike and Warner Bros.] are at the top of their fields. They are quality stores, and quality next to quality, even if it isn't the same, is still good."
If the Nike Town in Chicago is any indication, New Yorkers can anticipate traffic jams on 57th Street. Nike is Chicago's biggest tourist attraction, attracting some 4.4 million visitors a year, or about 12,000 a day, according to the sporting goods giant. By comparison, Chicago's Sears Tower--the tallest building in the U.S.--gets about 1.3 million visitors a year, according to the mayor's office.
Nike opened there two years ago in a 68,000-square-foot space that was a Saks Fifth Avenue, with such features as a basketball court, a video theater, an aquarium and audiovisual cues like the sounds of roaring fans or of a tennis ball being whacked.
Nike operates three other Nike Town stores, in Portland, Ore.; Newport Beach, Calif., and Atlanta. It has plans for units in Seattle and San Francisco, and its agenda calls for 10 to 15 units by the end of the decade.
Galeries is expected to be out by early November. At about that time, Nike will start its construction at the site. It could not be learned when Nike will be ready to open.
As reported, Galeries is said to be paying between $30 million and $35 million to get out of its Trump Tower lease, which expires in 2008. The store pays $8 million annually in rent to Trump.
Galeries has battled for three years to achieve profitability here. It opened in September 1991 with much fanfare in the site previously occupied by Bonwit Teller. Some observers said the layout had always been a difficult one for a store, despite its high-profile location. But Galeries failed to generate the crowds and business for its all-French merchandise.
It had a net loss of $18.3 million last year, on flat sales of about $20 million, according to data reported at the company's annual meeting in Paris in May.
"Galeries itself was doing well," said retail consultant Kurt Barnard. "It was killed by the exorbitant rent. George Graf did a wonderful job in turning around that store, and I saw it as a launching point for three to six stores across the U.S."

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