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MILWAUKEE — Elissa Elser remembers driving two to six hours from here to the suburbs of Chicago or Detroit for trendy, brand-name shopping. A decade later, Elser, now the owner of Hers boutique in Milwaukee’s Historic Third Ward warehouse district, can’t keep designer Louis Verdad’s clothing in stock.

“I only ordered a few things when we opened last April, because I wasn’t sure if Milwaukee would understand the line,” she said of the designer’s linen jacket with princess sleeves and black cotton skirt with ivory petticoat, which sell for $250 and $300, respectively. “But they were the first to go.”

Hers boutique represents part of the city’s transition from its blue-collar roots, epitomized in that television ode to the 1950s, “Laverne and Shirley,” to a hip metropolis that has been receiving more attention for architect Santiago Calatrava’s $100 million addition to the Milwaukee Art Museum than the city’s breweries and cheesehead hats.

“It’s not so much about having a negative image as having no image now,” said Bret Mayborne, economic research director for the Metropolitan Milwaukee Association of Commerce (MMAC). “We’re in the process of producing what that will be, like — today’s promotional materials start with the museum instead of a brewery.”

Milwaukee has been synonymous with an industrious spirit since its origins as an Indian settlement. The city’s name is derived from an Indian term for “gathering place,” and in the 19th century European immigrants developed it into a bustling trade region. The city claimed four major breweries in its heyday, and its economy helped build strong ethnic neighborhoods, ornate architecture, and a thriving cultural and entertainment scene. 

Milwaukee’s manufacturing jobs sector, about 17 percent of the city’s employment picture in 2003, according to the MMAC, rates higher than the national average of 11.2 percent for U.S. metropolitan areas. Harley-Davidson motorcycles and Briggs & Stratton, a producer of small gasoline engines, still serve as pillars of Milwaukee manufacturing. But much like the rest of the nation, there’s a shift toward service-based companies, such as Kohl’s Department Stores, headquartered in the suburb of Menomonee Falls, Wis., and Northwestern Mutual, a Milwaukee-based insurance and financial services provider.

This story first appeared in the December 27, 2004 issue of WWD.  Subscribe Today.

Of the city’s four major breweries, only Miller Brewing Co. remains. While manufacturing jobs declined to about 136,000 last year from 167,000 in 1999, the most recent figures for service positions total more than 650,000. From statistics compiled by the U.S. Department of Commerce’s Bureau of Economic Analysis and by the U.S. Department of Housing and Urban Development, the MMAC concludes per capita personal income in Milwaukee rose 22.5 percent from 1997 through 2002, and median family income increased almost 12 percent from 1999 through 2004 to $57,000. Retailers and restaurateurs have courted this new work force with its desire for high-end goods and services.

The city’s two upscale malls have already addressed the transition. Bayshore Mall, in the North Shore area, plans a $267 million renovation and expansion that will return the 50-year-old enclosed structure to its original open-air concept and will include almost one million additional square feet for retail and dining. Completion is slated for 2006, though no anchors or specialty stores have been announced. To the west, where farmland is being replaced by housing developments, Mayfair Mall in the suburb of Wauwautosa, Wis., underwent a 2001 redesign with an extra 90,000 square feet of retail space. At the request of retailers, 125,000 additional square feet will be developed over the next few years.

Yet no project shows off how the city has evolved better than the Third Ward, the gentrified warehouse neighborhood south of downtown that is notable for its late 19th-century and early 20th-century architecture, its residential component, proximity to hotels, and prime location between Lake Michigan and the Milwaukee River. Realizing the potential, property owners in 1976 established the Historic Third Ward Association, followed by the city’s second Business Improvement District in 1987. Entrepreneurs who relocated to other markets have been impressed by the results.

“I never thought I’d move back home, but I couldn’t believe how up-and-coming this place is,” said Sarah Brucker, a neighborhood resident and the owner of Blush beauty store. Departing as soon as she turned 18, Brucker worked as a makeup stylist in Los Angeles for eight years before opening her Third Ward business in October.

“Big loft windows create the perfect light for applying makeup,” said Brucker, who instructs customers on how to use high-end brands like Laura Mercier. She rings up sales of the line’s Secret Brightener for $30 and Foundation Primer at $29. Customers are also snapping up 15 Diptyque candles per week, Miller Harris fragrances and Tweezerman Fast Lash eyelash extensions. Women from as far as Appleton, Wis., a two-hour drive north of Milwaukee, have become regulars, while Brucker drums up more buzz through events like Pretty Tuesdays at a nearby piano bar, where girlfriends sip Champagne and have their makeup done. ”Each weekend’s sales get crazier,” she said, projecting total sales of more than $300,000 in 2005.

Elser became familiar with the Third Ward through her husband, who owned a home there. Finding other shopping districts saturated, the former Barneys New York saleswoman and Marshall Field’s personal shopper chose a 2,000-square-foot loft. “We were lucky to secure something that small,” she said.

Shoppers, who want instant access to contemporary lines featured on red carpets and in magazines, heard about the store through word of mouth before it even opened. Top-selling items are Farinaz blouses in a variety of styles; fabrics and details from ruching to sleeve buttons, and Rebecca Taylor bubble skirts in silk taffeta paired with lace wraps in matching pastels. “I must have reordered the skirt three times,” said Elser, predicting total store sales of more than $500,000 in 2005.

Accessories move just as quickly, with brooches, pearl jewelry by Elyssa B. Design and Beth Frank’s western-inspired belts in the lead. Isabella Fiore is the store’s most popular handbag line, though young women favor Laura Merkin’s convertible, metallic clutches. “I can sell a $600 bag, but it has to be special. Kate Spade’s black basics didn’t do well,” she said. 

Discovering that novelty T-shirts also outsell basics, Elser carries more exclusive, emerging lines, along with Fal and Grassroots, to wear with Oliver Twist medium-rise denim. Tom K. Nguyen’s suits, such as multicolored, metallic pinstripes with a pleated peplum, appeal to professionals seeking some zing. “They don’t want traditional looks from Banana Republic or Ann Taylor,” she said. 

Elser’s thrilled with Robert Rodriguez’s velvet blazer, rhinestone-embellished blouse and cashmere sweater. Trunk shows like this fall’s event for Sampson Martin maternity tanks — maternity wear makes up 15 percent of apparel — also introduce new merchandise.

Neither Carrie Arrouet nor Stephanie Sherman had retail backgrounds, but they didn’t like watching local dollars flow to Chicago. In October 2003, they debuted Lela, a 1,200-square-foot store combining consignment, contemporary labels — including Mica and Trina Turk — and selected new designers. “We contacted both clothing companies featured on ‘The Apprentice,’ but only Mel en Stel decided to show with us,” said Arrouet, who also carries Chicago-based Doris Ruth’s feminine, ruffled styles for $140 to $420.

“She won Gen Art’s Fresh Faces in Fashion and presented her spring 2005 collection, themed ‘Candyland,’ at Dylan’s Candy Bar in New York,” Arrouet said.

The partners also are big fans of Scarlet’s retro coats. Retailing from $250 to $450, they’re known for vintage cuts, silk linings and quality workmanship. Jewelry favors locals, too, including Renee Fensin’s abstract designs in beaded, twisted wire and Stella Style’s blend of old materials and modern styles. Brooches, ponchos and chokers top fall accessories. “Vintage Gucci or Prada bags also disappear in a day,” said Arrouet, who devotes 50 percent of merchandise to used clothing and accessories.

Hoping to discover the next Zac Posen, she reports that sales already exceed the business plan and will jump 20 percent in 2005 to $250,000. “This area is so ripe for our vision,” Arrouet said. Her partner, Sherman, added, “Our goal was to pioneer a fashion district when we started, and that’s exactly what happened.”

J. Bird Boutique is the Third Ward’s newest women’s apparel store. From the start, owners Jennifer Hemberger and Robert Leschke benefited from a street-level location in a residential building with 125 units. Hemberger said many have already stopped by for Blujeanious low-rise denim, Hanky Panky lingerie and Design History T-shirts.

The former jewelry sales manager decided to bring to her hometown the boutique culture she experienced on business trips to New York, California and Atlanta. “Milwaukee had many stores catering to bridge collections, but nothing really for the edgy, price-conscious market,” said Hemberger, describing Chicago-based Lara Miller’s cotton sweaters, averaging $200, as a good middle-of-the-road example. “It can be worn as a cowl neck or flipped over to make a bateau.”

Total sales for 2005 are expected to reach $350,000, Hemberger said. Industrial, chic decor juxtaposes polished concrete floors and exposed ducts with crystal chandeliers, shag carpets and a midcentury curved love seat. The inviting atmosphere suits events like shopping nights, bridal showers and stylist seminars on tips from storage to updating wardrobes. Hemberger reports neighborhood organizations also excel at promotions.

Nancy O’Keefe, executive director of the Historic Third Ward Association, predicts the number of events and attendees will skyrocket when the Milwaukee Public Market, a collection of independent organic food vendors, opens in 2005. “They expect 20,000 visitors per week,” she said, listing two theaters, a design school and an advertising museum as other attractions.

The 10 tons of snow shipped in for a snowboard festival hosted by Moda 3, a snow, skate and streetwear store launched in June 2004, also caught the attention of 1,500 revelers. “Passion is what drives this store,” said Moda 3 owner and West Coast transplant Christian Deaton, projecting sales of $500,000 in 2005. “I want to bring New York ambiance to this town.”

His roomy, minimalist setup showcasing perfectly assorted gear would be the envy of many an urban skateboard or snowboard retailer. Deaton and manager Eric Kuester are most surprised by the response from women. “This category tends to have a larger male audience, but half our business comes from women,” said Kuester, who orders women’s apparel from Triple Five Soul, Puma and Roxy. “Even thirtysomething women buy Gravis iPod holders and messenger bags, Nixon watches with wide bands and Hurley sunglasses, too.”

Items retail from $60 for sunglasses to $100 for tracksuits to $150 for handbags manufactured from discarded skateboards. Deaton plans to shop WWDMAGIC next year for women’s streetwear and more feminine collections. 

Though the Third Ward is also the go-to place for progressive cuisine — diners can’t get enough of Nanakusa Japanese Restaurant’s golden scallop maki roll or Sauce’s small plates and pineapple-kiwi martinis — a new batch of pioneers is edging south into less developed neighborhoods.

“It’s the ripple effect,” said O’Keefe, speaking of business owners such as Areka Ikeler, who designs Fashion Ninja, a collection of deconstructed, reinterpreted vintage clothing, and teaches sewing. “I opened here because it’s where I grew up and it was affordable,” Ikeler said. “But now trendy restaurants, bars and shops are moving in. It’s starting to become a district.”

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