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NEW YORK — Downtown is on the rebound.
This story first appeared in the September 11, 2002 issue of WWD. Subscribe Today.
In the aftermath of Sept. 11, retail neighborhoods south of Houston Street experienced a dramatic falloff in business. Their proximity to Ground Zero, the acrid stench of smoke that hung in the air for miles, not to mention the police barricades and the devastating hole in the downtown skyline, significantly contributed to the decline of foot traffic and a subsequent loss of sales.
In the year since, while some retailers have closed up shop and moved out of the neighborhood and countless retail spaces remain empty, an impressive list of high-profile apparel companies have moved into SoHo, including Prada, Salvatore Ferragamo, Burberry, Tommy Hilfiger, Anne Klein, Adidas, Apple, Barneys Co-op and Y&Kei. Others such as Agent Provocateur, La Perla, Custo Barcelona and Miss Sixty are opening stores there in the next several months, while the meat-packing district and TriBeCa are also seeing more fashion retailers open.
Despite the comings and goings, the vacancies and the bad press, owners of hip boutiques in SoHo say business is good.
“Frankly, business has been great,” said Sarah Easley, co-owner of Kirna Zabete. “We’re very lucky. The City and the State of New York have been extremely helpful in doing things that you wouldn’t necessarily think would be that beneficial. But just the ‘tax-free below Houston Street’ days really increased traffic. Little boosts along the way like that have really helped our business.”
Easley added that while she and her partner, Beth Buccini, didn’t receive a rent break or any insurance help, the loyalty of their customers helped their business immeasurably.
Stefani Greenfield, co-owner of the Scoop boutiques, said that while there was a dip in business immediately after Sept. 11, “as soon as [then-Mayor Rudy] Giuliani said ‘go shopping,’ they came.” For fall, Scoop’s business is up 25 to 35 percent in all of their stores. Greenfield attributes the boost not only to the store’s product mix and loyal customers but also the influx of major retailers on Broadway — where Scoop is located — like Prada and Puma. Meanwhile, the retailer is preparing another branch in the meat-packing district, as previously reported.
Clearly confident about SoHo as a viable retailing neighborhood, David Katzav, owner of Big Drop stores, opened another one in June at 425 West Broadway — his second in SoHo.
“A lot of people thought I was crazy to open another store around the corner from my original store, but I live and work downtown and believe SoHo is the place to shop and be entertained,” Katzav said.
While retailers generally are loathe to admit when business is bad, boutique owners in TriBeCa say they’ve found it rather dismal in the last few months, but are hopeful fall shopping will give their businesses a boost.
Nikki Butler, the owner of Nikki B., an accessories store on Harrison Street, saw business pick up through the holidays and the first quarter of this year. However, the summer has been very slow. “The Sept. 11 anniversary has set us back as well, and I expect the whole month to be slow. But by October, we should be back to where we were last year, if not up,” Butler said.
The TriBeCa Issey Miyake store remains well-trafficked, thanks in part to a series of cultural events held there regularly, like artistic exhibitions and music, which draw crowds. Summer, though, has been slow for the retailer. “We received a lot of press (after the store opened last October) and people were interested in seeing the store that had braved the whole ordeal,” said a spokeswoman for Miyake. “There were also a lot of downtown initiatives at the time to bring traffic to the area and that definitely helped. We’ve been hit a bit harder since, but then all of retail is much slower in the summer.”
LoftWorks @ Lafayette, a discount clothing retailer which opened in July on Lafayette Street just south of Canal, has been slow as well. Lana Choy, co-founder and president of the store, expects a lift in sales after this week. “I think the anniversary will affect business because, let’s face it, shopping is secondary to what has happened and to what people are feeling,” Choy said.
Overall, real estate sources said that while luxury tenants aren’t flocking to SoHo with the same verve as they were before Sept. 11, interest in the area is picking up.
“Business seems to be rebounding a little, it’s still off, but not like it was,” said Andrew Goldberg, senior managing director at Insignia/ESG. “Overall we’re seeing more people wanting to go back downtown.”
“The tide is turning,” agreed Jeffrey C. Paisner, senior managing director at The Lansco Corp. “Some of the most recent deals there are more in tune with the demographic and appropriate price points of that area. Some of the luxury brands that came to SoHo never found the right merchandise and price-point mix suitable for the SoHo customer.”
“I think for the right tenant, who is on the market, SoHo is more of a bridge marketplace,” said Caroline Banker, executive vice president at Insignia Douglas Elliman. “It is not a Chanel market. It’s just not. The customer in SoHo, by and large, is not buying Chanel. They’re looking for something more value-oriented.”
Proof of that is in the packed stores of moderately priced retailers like Adidas and Puma, according to Banker.
Smaller, entrepreneurial tenants, however are now looking to the quiet, low-key sprawl of TriBeCa. Steven Alan, owner of the eponymous boutique on Wooster Street, has just opened another store in TriBeCa at 103 Franklin St. because he found the rents in SoHo too expensive. “There is access by every train. I enjoy walking around down here because it is a very calming area,” Alan said. “It reminds me of Portobello Road in London. There isn’t a lot of hustle and bustle like a lot of Midtown and downtown, which are filled with chain stores.”
As Banker said: “I’m finding that where there had never previously been a retail market, out of the ashes a new retail market is actually developing in TriBeCa.”