By  on November 28, 2005

The Shops at Columbus Circle might be the city's first successful vertical mall.

NEW YORK — Like any high-profile and ambitious project, the Shops at Columbus Circle had its share of critics, a chorus who said New Yorkers would never take to shopping and dining in a vertical mall.

And they had history to back their theory: Herald Center on Sixth Avenue and West 33rd Street failed as a luxury venue and is now populated by Daffy's, Payless Shoes, Mrs. Field's and a Division of Motor Vehicles outpost. Manhattan Mall, one block south, has struggled with the departures of anchor tenants A&S and Stern's.

Naysayers also were ready to stick a fork into the Shops' highly touted dining component, which attracted some of the brightest culinary lights in the U.S., including Thomas Keller, Jean-Georges Vongerichten, Masa Takayama and Gray Kunz. But Chicago's well-known chef, Charlie Trotter, never opened his planned restaurant and Vongerichten's V may be closing after receiving tepid reviews.

"We're working with Jean-Georges to remain open through the end of the year," said Kenneth Himmel, president and chief executive officer of Related Urban Realty. "Thomas Keller will open Bouchon, his California French brasserie, and there will be another brasserie cafe. We're hoping to decide on the chef by the end of the year."

While the high-profile restaurateurs were regrouping, something remarkable happened at Shops: retail tenants posted sales averaging $1,200 a square foot.

Only a few elite U.S. shopping centers boast sales of more than $1,000 a square foot. Included in this fraternity is Las Vegas' Forum Shops, believed to be one of the most productive malls in the country; the Americana Manhasset in Manhasset, N.Y., and the Ala Moana Center and 2100 Kalkalahua Avenue, both in Honolulu, which have tapped into the demand for luxury products from locals and Asian tourists.

The Shops, a four-level mall on the site of the former Colosseum on Columbus Circle situated at the southern end of Central Park, has always had a hard time convincing observers of its success. "I don't know why everyone in New York had this terrible aversion to vertical retail," Himmel said, noting that retailers at the Shops are trending 30 percent ahead of last year's sales."We did $1,000 per square foot in our first 12 months," Himmel said. "Now, close to the end of the second year, as a center we're comping 20 percent over 2004 to $1,200 a foot and we're finding that our strength is in fashion."

Hugo Boss has seen "significant double-digit increase over the previous year," said Tony Lucia, president and ceo of Hugo Boss USA. J. Crew, which opened with sales of $1,200 a square foot, is 15 percent ahead of last year. Stuart Weitzman's sales are up 30 percent, the company said.

Sisley's owner, Iraklis Karabasis, was so encouraged by the store's performance he opened a Benetton unit in October. "Sisley has consistently performed well," a spokesman said. "Benetton is way above expectations. We're very pleased with the reaction from shoppers."

Meanwhile, Esprit has seen sales jump 40 percent over 2004 for men's and 60 percent for women's. At Montmarte, sales are up 33 percent compared with last year, said district manager Hannah Held. "We're very happy," she added. "The traffic is picking up."

"We're underassorted in women's apparel," said Himmel, who described the tenant mix as "a step above typical specialty stores without being full-fledged luxury. Part of it is interpreting the mix of tenants so we're not competing with Madison Avenue. We don't want to become a regional mall, but it's a little early to be thinking about Gucci or Louis Vuitton. We're catering to an entry-level luxe market."

There's been no retail turnover at the Shops, but that doesn't mean there isn't room for improvement. "We'll look selectively to make some editing decisions," Himmel said. "The leases run for 10 years, but there's always the ability to improve on a mix."

While he declined to discuss potential tenants, the center's wish list is said to include Max Mara, Emporio Armani, Swarovski and Mont Blanc, real estate sources said.

The Shops' operators initially expected to see a disproportionately large male clientele, but it didn't materialize. Rather, the beauty category has been a strong performer with Sephora registering almost $3,000 a square foot in sales.After a tepid start, J.W. Cooper is taking off, owner Todd Rauchwerger said. The accessories shop, which sells belt buckles priced from $200 to $15,000, is trending 40 percent ahead of last year.

"People in New York are giving the center more of a chance than when it first opened," Rauchwerger said. "They weren't into it at first — a mall in New York. But it's not a typical mall with major department stores like in other parts of the country."

Rauchwerger's Columbus Circle store is performing on par with a unit at the upscale Bal Harbour Shops. "I've sold $10,000 and $12,000 out of the New York store," he said. "We're selling $8,000 alligator boots. The center gets a mix of medium to high-end customers."

Other businesses also are thriving. At Whole Foods, a 59,000-square-foot specialty grocer, the almost 50 cash registers don't seem sufficient at lunch time. The massive Williams-Sonoma flagship, which occupies space on the ground floor and second level, is the top-performing unit in the company's chain.

Himmel believes the restaurants and other eateries have symbiotic relationships with the retailers, so consumers who graze at the Whole Foods salad bar or dine at Masa for $350 per person are the same people who shop at Benetton and Sephora.

Rauchwerger confirms this notion: "When the restaurants finally opened, sales improved. That's a big part of our customer base."

There still seems to be a large divide between the price of dining and the price of more populist clothing, but Himmel is satisfied with the results thus far. "A unique environment has been delivered," he said. "It's not a regional mall environment. Our success shows the strength of the immediate market we're in, the 10 blocks around us. The West Side is still understored."

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