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NEW YORK — Gucci, Tiffany and Prada, say hello to your new neighbors: Abercrombie & Fitch, Zara and possibly Mango.
The purveyors of fast fashion and jeans and tops to the 18- to 22-year-old crowd are the latest (relatively) low-priced retailers to muscle their way onto Fifth Avenue, a street better known for its luxury brands.
When A&F opens next year at 720 Fifth Avenue, the thoroughfare stands to lose Fendi, one of its longtime luxe tenants. “We’ll definitely maintain a presence in New York,” said a Fendi spokeswoman, but she declined to say where.
For A&F, meanwhile, the address is a coup.
“We looked at locations all over the city,” said Mike Jeffries, the retailer’s chairman and chief executive officer. “It’s been an ongoing search. We looked at other Fifth Avenue stores and some on Madison Avenue. We had our sights set on Fifth Avenue.”
The company will pay a price for such visibility. Rents on Fifth Avenue rose 10.9 percent between March 2003, when the asking price was $646 a square foot, to March 2004, when the asking price was $717 a square foot, according to the Real Estate Board of New York. Jeffries declined to project a sales volume for the store, but said, “We have to make a lot of money.”
A&F, which will occupy the lower level, first, second and third stories of the building — a total of 17,000 square feet — is following a strategy set by its high-end predecessors in the late Nineties.
That was when Prada, Versace and Ferragamo opened large flagships on Fifth Avenue at a time when they were asserting their independence from specialty chains and establishing their own retail networks. Then, as now, a Fifth Avenue flagship was viewed as a giant billboard announcing a brand to the local shoppers and international tourists who clog the thoroughfare’s prime stretch between 49th and 59th Streets.
But in this “masstige” world, when Isaac Mizrahi designs for Target, Sam’s Club sells expensive diamonds and Oscar de la Renta launches a moderately priced collection, Fifth Avenue is becoming more of a polyglot street than ever. Nonluxury companies have started to understand the value a high-profile flagship on Fifth Avenue brings to their brand. This is especially true of firms that are consciously trying to elevate their image, such as A&F and Zara, which is soon to open a flagship on the avenue in the former Façonnable space between 54th and 55th Streets.
This story first appeared in the August 19, 2004 issue of WWD. Subscribe Today.
“The luxury customer has become the contemporary customer,” said Laura Pomerantz, a principal of PBS Realty, who represented A&F. “Retail companies do things that are related to adjacencies. A&F opening a store on Fifth Avenue will be a catalyst for other lower-priced companies to go there.”
In addition to Zara’s 10,000-square-foot flagship and Sean “P. Diddy” Combs’ Sean John store due to open on Fifth Avenue this fall, chains such as Mango and American Eagle Outfitters are reportedly in the market for locations on the street.
“Fifth Avenue is really bifurcated,” said Richard Hodos, president of HGCD + Stephanou. “It has really gone to both extremes. You can find some of the same characteristics on Oxford and Regent Streets in London.”
The street has morphed several times in the last decade. H&M in 2000 planted its flag on Fifth Avenue and 51st Street, and Liz Claiborne in 2003 turned its store on Fifth Avenue and 52nd Street into the first U.S. unit of Mexx, a Netherlands-based company it acquired in 2001. Other populist stores on the avenue include Gap, the NBA Store, Sephora and Banana Republic.
Over the last decade, the Fifth Avenue Association has been instrumental in shooing away faux antique shops, carpet merchants and electronic stores with perennial “Going Out of Business” sales, which were considered blemishes amid the long stretch of elegant boutiques and department stores like Saks Fifth Avenue.
“It took a lot of work to get rid of the GOB stores,” said Tom Cusik, president of the association. “There has been improvement over a long period of time.”
Airline offices for United, Alitalia and Lufthansa also closed, making way for more stores.
The avenue in the early Nineties attracted entertainment retailers such as Disney Store, Warner Bros. Studio Store and Coca-Cola. That trend, however, proved short-lived as many entertainment retailers imploded. Coca-Cola and Warner Bros. have since closed their Fifth Avenue locations and Disney has divested its retail arm to Children’s Place.
Cusik said Louis Vuitton’s latest gambit, the purchase of the former Warner Bros. store at 1 East 57th Street on the corner of Fifth Avenue, is an example of the avenue’s continued viability as high-price fashion terrain.
He cited Bottega Veneta, which took over a Club Monaco store at 699 Fifth Avenue and the upcoming Pucci boutique in the St. Regis Hotel on Fifth Avenue and 55th Street as evidence of luxury’s firm grasp on the shopping street.
“In the last seven years about 10 to 15 new stores opened and an overwhelming number of them have been high-end retailers,” Cusik said.
With several spaces reportedly in play, the future direction of Fifth Avenue remains to be seen.
Not everybody thinks populist-priced stores are something to bemoan. “The way people buy fashion has changed,” said Jeffries. “They’ll buy a Gucci jacket and A&F jeans. That’s why we think we’re the perfect fit for Fifth Avenue.”