LONDON — Move over LVMH and Kering — Chanel is grabbing its own slice of New Bond Street.
Despite new social distancing and quarantine measures; a dearth of international visitors, and plans by the U.K. government to wipe out tax-free shopping for tourists next year, Chanel has made a punchy offer of 310 million pounds to purchase the site of its flagship at 159 New Bond Street.
The Times of London first reported the deal on Tuesday, and said that SEB, the Swedish pension fund that currently owns the property, was originally asking for offers around 240 million pounds.
A Chanel spokesperson declined to comment on the reported sale, and the price. “The current owner of the building has placed it up for sale. We have put in an offer for the site, but the final transaction has not been confirmed,” the person said.
It is understood that a European high net worth individual had offered 35 million pounds more than Chanel, but was not in a position to complete the deal as quickly as the luxury brand. Chanel will be buying the freehold, meaning that once the deal is confirmed, it will own the property outright.
Chanel opened its New Bond Street store in 2013 and at the time, it was the brand’s largest unit in the world. Located across the street from Louis Vuitton’s London flagship and next door to Dior, the store spans 12,600 square feet over three floors. It was designed by Peter Marino and is filled with new artwork inspired by Coco Chanel’s lifestyle, and the symbols of the brand.
Back in 2013, Bruno Pavlovsky, president of fashion and president of Chanel SAS, said it took nearly two decades to find the perfect location, and a space that was the right size. A smaller Chanel store was previously located on nearby Old Bond Street.
Chanel is the latest big luxury player to plow its money into New Bond Street.
According to Matt Farrell, managing director of Trophaeum Asset Management — which owns most of Albemarle Street, properties on New Bond Street and chunks of prime space around London — the appeal of New Bond is its small scale.
“There is fierce competition to own trophy assets on Bond Street. There is a limited amount of space on the street, the buildings are small, and not high-rise. Plus, they’re listed,” which means they are heritage assets protected by law, he said.
Right now, New Bond is even more in demand than Old Bond Street, which is the lower end of the stretch between Oxford Street and Piccadilly. Although there are fashion stores on Old Bond, such as Prada, Alexander McQueen, Stella McCartney and Tod’s, the street is dominated by high-end jewelers, and tends to get less footfall than its neighbor.
New Bond Street is already the most expensive shopping thoroughfare in Europe and the third most-expensive worldwide, after Hong Kong’s Causeway Bay and upper Fifth Avenue in Manhattan. According to Cushman & Wakefield’s annual survey of the most-expensive shopping streets, rents on New Bond were $1,714 per square foot per year in the second quarter of 2019.
Celine will open shop next door to fellow LVMH brand Loewe, which is located at 41-42 New Bond Street, and its luxury neighbors will include Ermenegildo Zegna, Alaïa, Smythson, Chloé, Ralph Lauren and Delvaux.
Earlier this year Brunello Cucinelli moved onto New Bond Street, while Versace is set to open a unit in what is now the Bally flagship, on the corner of New Bond and Maddox streets. The new Versace store, which is set to open later this year, will span 7,244 square feet and will offer a full selection of men’s and women’s ready-to-wear and accessories over three floors.
Kering-owned Balenciaga is preparing to move into the current Russell & Bromley shoe store space on the corner of New Bond and Conduit streets.
Canali, meanwhile, has signed a new 10-year lease for a site on the corner of New Bond and Brook streets that will span 5,014 square feet over three floors.
In February, Trophaeum purchased a 15,000-square-foot retail block on New Bond Street from a firm controlled by the banker Joseph Safra.
Trophaeum paid 130 million pounds for the building, which houses Halcyon Gallery on the ground floor, and said the location has great potential for a future fashion maison.