NEW YORK — With the Qatari royal family’s deep pockets behind it, Valentino is making a major statement for current momentum and future growth — its largest flagship yet, set to open next year at 693 Fifth Avenue here in the old Takashimaya Building.
This story first appeared in the May 7, 2013 issue of WWD. Subscribe Today.
The new store, at 20,000 square feet with three floors of selling space as well as a basement, is the culmination of three years of sales increases for the brand, and marks a new chapter of expansion, with freestanding stores set to open in such cities as San Francisco, Las Vegas and Shanghai.
“It’s a very exciting period,” chief executive officer Stefano Sassi told WWD on Monday.
“In three years, we saw sales grow around 70 percent,” the ceo said. “The brand is growing fast. The first three months of this year, it was even accelerating, and we were increasing sales in the first quarter by 23 percent. Retailwise, in our own network, [increases have] been around 40 percent, especially with the very fast development of accessories, which are growing dramatically, both in shoes and bags.”
The Fifth Avenue store, when it opens next summer, will have a large focus on accessories.
The deal signals a significant push for the brand under the ownership of Mayhoola for Investments, a group controlled by the royal family of Qatar, which acquired the Valentino Fashion Group SpA last July.
Qatar, the tiny but increasingly powerful peninsula on the Persian Gulf that is rich in oil and natural gas resources, has recently been on a major spending spree, adding some of the world’s most prominent properties to its portfolio. These include Harrods, One Hyde Park and The Shard in London, as well as significant chunks of Place Vendôme and Printemps in Paris. Although it has reportedly intensified its quest to invest in U.S. real estate, there are no indications that Qatar will buy the former Takashimaya Building on Fifth Avenue, which New York real estate developer Thor Equities acquired for a reported $142 million in 2010. Valentino signed a 15-year lease for the space which, according to sources, is considered to be Manhattan’s largest retail real estate deal of the year so far. Valentino will take four floors of the 20-story building, which was originally designed by John Burgee Architects.
The Fifth Avenue deal kicks off a new phase of expansion for the fashion house, and the investment by Mayhoola will particularly fuel freestanding retail.
“We believe there is a big opportunity with the Qatar shareholders we now have,” Sassi noted, pointing to new store locations, some of them at the world’s top retail locations, as a key focus “to provide the full experience of all of Valentino today. The major target is talking to the consumer.”
The Takashimaya Building — a prominent tower between 54th and 55th Streets — fit the bill.
“In fashion today, everybody has a very loud voice and we need to use the same approach,” Sassi said. “It means we have to increase in terms of visibility, in the distribution of Valentino, and the Fifth Avenue store is one of the best things we can do because it’s such an iconic location.”
The new Valentino store will also serve the fashion house beyond just sales.
“It will have a strong communication effect for consumers,” Sassi said. “We want to state what Valentino is today. It’s also a business opportunity, especially for our accessories business, which is developing fast and becoming a huge business opportunity. We want to communicate the level of our ambition to the fashion world and fashion community. The Qatari shareholders are very committed to our success story.”
Since the 20-year-old building does not have landmark status, Valentino will be able to change the facade; British architect David Chipperfield is being charged with developing the entire store look with creative directors Maria Grazia Chiuri and Pierpaolo Piccioli. The look will be based on recent concept stores in Milan and Paris but adapted to the dimensions of the new space.
“We want to realize a very strong facade that is a sign of our presence there, and we have the opportunity to do that,” Sassi said. “How big, how tall, we don’t know yet.…We just started to work on it, but the more impressive it is, the better.”
Even before the Fifth Avenue store is unveiled, Valentino will roll out a string of stores.
Next month, the company will open a 5,295-square-foot store in a townhouse at 821 Madison Avenue with three selling floors and another floor devoted to a VIP salon. The company will also open its first accessories-only store in the U.S., a 750-square-foot unit at The Forum Shops at Caesars in Las Vegas this July. Simultaneously, Valentino will open a 3,000-square-foot store at Las Vegas’ Shops at Crystals.
In November, the company will add a 7,000-square-foot unit in San Francisco at 105 Grant Street, on the corner of Geary Street. It will be the first U.S. store to carry the complete men’s collection, with a separate entrance for the those floors. The company is said to be eyeing a unit in Aspen, Colo., as well.
While Sassi didn’t disclose growth projections for the U.S., he said, “Our ambition for brand development is quite high, and I think we still have a lot of opportunities to develop, especially looking at our competitors. In ready-to-wear, we already have a very good positioning in the market. In accessories, we still have a big opportunity.”
The U.S. isn’t the only region of growth. In November, Valentino will open a 7,535-square-foot store at Shanghai’s IAPM mall. Asia, said Sassi, is the fastest-growing region for the brand, although the U.S. is still the largest market.