WWD.com/globe-news/retail-features/catering-to-billionaires-hedge-fund-cash-fuels-greenwich-retail-boom-489228/
View Slideshow

GREENWICH, Conn. — This wealthy New York City suburb of 62,000 where hedge funds reign is becoming a mecca of fashion retailing.

This story first appeared in the July 24, 2007 issue of WWD.  Subscribe Today.

With the average price of a single-family home at $2.3 million, according to RealtyTimes, Greenwich has long attracted upscale retailers with its understated affluence. But as the town becomes the hedge fund capital of the U.S., more fashion retailers are moving in to tap into that wealth and cater to new customers with more overtly lavish tastes.

More than 100 hedge funds have headquarters in Greenwich, including ESL Investments and the Tudor Group, whose respective founders, Edward Lampert, who is also chairman of Sears Holdings Corp., and Paul Tudor Jones, both work and live in the community. Steven Cohen, the self-made billionaire who founded and manages SAC Capital Partners, resides in Greenwich, along with Cohen protege Level Global Investors’ David Ganek and his wife, Danielle. There’s also Lehman Brothers Holdings chairman Richard S. Fuld Jr. and his wife, Kathleen, who are avid art collectors. On Monday, there was a report that the Yankees’ Alex Rodriguez is eyeing a $25 million estate.

The demographics make Greenwich much sought-after, even as retail rents spiral. Calypso is said to have expressed interest in a space next door to Dighton Rhode, which arrived in the fall, and Zara is to unveil a two-level store at 225 Greenwich Avenue this fall.

“People who travel to Europe, whose kids travel to Europe, live in Greenwich,” said Jeffrey Paisner, executive managing director of Lansco Corp., who represented Zara. “They’re much more exposed to fashion. Greenwich was much WASP-ier before. It’s kind of what happened to East Hampton [N.Y.]. There’s all this new money out there now. Zara is going to attract younger customers. It’s going to be a revelation for a lot of people in Greenwich who thought they only needed to go to Gucci and Prada.”

The tenant lineup is changing on the main drag, Greenwich Avenue. “Commercial stores don’t do so well,” said Diana Chace, senior director at Robert K. Futterman & Assoc. “We’re seeing the demand for high-quality products.”

Pier 1, the Door Store, KB Toys and Sam Goody all closed in the last three years. Newer retailers include Rugby, Scoop, Malia Mills, Sephora and Vineyard Vines.

Traditionally, fashion boutiques clustered at the top of Greenwich Avenue, but the demand for space has forced retailers to consider the lower part of the thoroughfare, where many antiques stores are located. Given the demand, Chace believes the antiques shops will be redeveloped.

Greenwich consumers — the median household income is more than $100,000 — are demanding and willing to pay for the best, said Lisa Moskowitz, owner of J.L. Rocks, a jewelry boutique at 18 Greenwich Avenue.

“There’s been a tremendous influx of young, affluent, fast-track, high-profile money people from Manhattan,” she said. “The women are very dedicated to their children, but spend a great amount of time playing tennis, dining and meeting with their book clubs. They have a lot of money to spend. They’re much more fashion-forward and daring than the older crowd.”

Moskowitz has noticed similarities between the residents of Greenwich and those of Beverly Hills, where she lived. “It’s consumption, consumption, consumption,” she said. “[Customers] don’t need an occasion in order to buy something. The only difference is that in Beverly Hills, married women are free to spend unlimited amounts of money. Sometimes in Greenwich the women go through this sort of protocol where they have to get permission from their husbands. It’s a quasi-Texas attitude. They have the role of homemaker with a lot of money.”

Salon owner Warren-Tricomi’s Greenwich outpost stays open seven days a week to keep up with the demand for “done” hair. “We have clients who come in daily,” said Joel Warren, a partner in the salon. “It sounds a little opulent and over-the-top, but people work hard and make a lot of money and deserve to be taken care of. People like to feel finished. That carefree feeling doesn’t exist [in Greenwich]. Carefree hair doesn’t go with the lifestyle.”

Some clients prefer to take advantage of the at-home services. “Clients have salons in their houses with sinks, chairs and mirrors,” Warren said. “Why not? People have bowling alleys and movie theaters in their homes.”

Those aren’t the only amenities Greenwich residents have in their manses. In addition to grottos and English-style pubs, Betsy Campbell, a broker at Sotheby’s Realty, said, “Wine cellars and tasting rooms, home theaters and gyms have become a huge thing. The people moving to Greenwich understand tradition, but want their homes to reflect what’s in style today. They want to put their touch on a brand new [construction].”

Jennafer Loporchio, owner of Dighton Rhode on Lewis Street, just off Greenwich Avenue, said: “My clients are 35- to 45-year-old women who don’t want a preppy or conservative look. They like to look put together, they like complete outfits and they want the best quality.”

Dighton Rhode, which sells Balenciaga, Proenza Schouler, Behnaz Sarafpour, Marni, Thakoon, Michon Schur, Peter Som and Ports 1961, is painted in a sophisticated color scheme of cream, mustard yellow and chocolate brown. White suede couches and stools trimmed in brown piping define the seating area, urns rest on white columns and yellow curtains frame brown-walled dressing rooms.

“We try to buy the collections as fashion-forward as we can,” she said. “We carried about eight to 10 strict runway looks last season. We buy very deep into a collection so we represent the designer well.”

Loporchio’s customers have little time to research new designers. “The 35- to 45-year-olds don’t have time to go shopping in the city anymore,” she said. “They’re really involved with their kids. They like to be introduced to new designers….They work out wearing jewelry with their hair and makeup done.”

Loporchio, who studied the Greenwich market for three years before opening her business, expects to do $1.2 million in the first year in 1,200 square feet of selling space. “Our average price point is $1,200,” she said, adding that there’s been no price resistance and expansion may be in the offing.

Scoop’s business in Greenwich is also growing. Next year co-owner Stefani Greenfield hopes to move men’s out of the existing store at 85 Greenwich Avenue and open separate units for men’s and kids. “We believed in Greenwich years ago,” Greenfield said. “We didn’t wait for the boom. Greenwich is an exquisite-looking town. There are no traffic lights, it’s calm and serene and our store faces a gorgeous park. It’s suburban, but it has more of an urban mentality. It used to be perceived as this preppy little town where everyone wore monogrammed sweaters. It’s now very diverse in terms of fashion.”

Scoop’s customers are “well-educated and polished,” Greenfield said. “These women are not running around in sweatpants and they’re not walking around like fashion victims. This is about luxury head-to-toe wardrobing.”

Rents on Greenwich Avenue have been rising steadily in the last decade. Futterman’s Chace said prime locations fetch $80 to $100 a square foot. Rents have doubled since 1995 when Saks Fifth Avenue opened its 35,000-square-foot store at 205 Greenwich Avenue and the asking prices were $40 a square foot. “Only the pure vertical retailers are able to pay these rents,” said one local merchant.

Richard’s, at 59 Greenwich Avenue, has been catering to the sartorial needs of the community since the Fifties. In the last few years, co-president Robert Mitchell has noticed the rise of the “sport luxe movement, labels such as Brunello Cucinelli and Loro Piana.”

Designer ready-to-wear is another mainstay of the business. “We’ve always had strong Dolce & Gabbana and Chloe businesses. Michael Kors seems to have found a sweet spot between the classic and modern woman, which is appealing to women in Greenwich.” Other bestsellers include Giorgio Armani, Ralph Lauren, Escada, Prada, Gucci and Puccinelli.

Richard’s, which does about $2,000 a square foot in 25,000 square feet of selling space, has dramatically increased its shoe and handbag offerings. The retailer last year added Gucci and Prada handbag shops and renovated its entire handbag department. Mitchell said the business’ growth was propelled partly by the closing of family-owned Grossman’s, a shoe and handbag store on Greenwich Avenue.

“The new people coming to Greenwich are playing into our strengths of being designer-oriented and brand-conscious,” Mitchell said.

The charm of Greenwich wasn’t lost on Tory Burch, who opened an eponymous store at 225 Greenwich Avenue in December. “Women are really chic out there,” she said.

Many of Burch’s customers live in Manhattan and own weekend homes in Greenwich. “Our store is doing incredibly well, much better than we thought,” she said. “Weekends are busier, but it’s busy during the week….We ended up doing in the first three months the volume we projected for the entire year.”

Rtw and footwear are strong and anything with an animal print is snapped up, Burch said, adding the Tory Burch collection for girls sold out.

Greenwich customers haven’t entirely lost their taste for preppy styles. Vineyard Vines, at 145 Greenwich Avenue, which specializes in nautical striped sweaters, gingham dresses, Bermuda shorts and seersucker golf skirts, is popular, but some female residents said they shop there for their husbands and not themselves. Lacoste, a pillar of preppy style, opened a store in Greenwich last month.

“Our shopper is approaching life in a younger sense,” said Billie Messina, manager of Saks in Greenwich. “The typical Saks customer is modern, upscale, trendy and status-conscious in a very subtle way. Our store assortment has changed considerably in the past five years. We cater to a very designer-focused shopper.” At the top of the list are Chanel, Prada, Gucci, Dolce & Gabbana, Ralph Lauren, Akris/Akris Punto and Moschino, she said.

Knoyzz, which looks like a funky bazaar overflowing with brands such as True Religion, Rock & Republic, Hanky Panky, Junkfood and Blue Cult, attracts teens and their moms.

“Greenwich completed the circle for us,” said owner Richard Moskowitz. “We’re in upscale enclaves such as Westport, Conn., and Rye Brook, N.Y.” Knoyzz, which cranks up the music, “is about the experience. The customers…don’t want to be taken advantage of. We felt there was a need for our store there.”

View Slideshow