NEW YORK — The Plaza Retail Collection has marketed itself as an alternative for brands that want a Fifth Avenue address but can’t afford Fifth Avenue rents.
Asking rents on Fifth Avenue are $2,000-plus a square foot, up from $1,500 a square foot at this time last year, according to Cushman & Wakefield. That excludes all but the best-financed independent retailers and national chains.
Elad Properties, which bought the famed Plaza Hotel for $675 million in 2004 and has poured $400 million into its renovation, has achieved some success in terms of assembling a group of eclectic stores, many of them from overseas. Elad declined to discuss rents.
Industry sources said The Plaza is asking about $300 a square foot, depending on the location. The choicest spaces in the former hotel command higher prices. Space in the Edwardian Room, where Elad envisioned a collection of jewelers early on, is being offered for upward of $1,000 a square foot, said brokers with knowledge of the asking rents.
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Designers from Vera Wang to Ralph Lauren are said to have examined the crown moldings of the Edwardian Room, which draws the higher price because “it’s on Fifth Avenue and it’s a grand room that’s landmarked,” said a broker, who asked not to be identified. Neither designer signed a lease.
Although well-known names such as Rachel Roy, Kenneth Jay Lane and Gurka have leased space at The Plaza, much of the retail area’s 120,000 square feet will be occupied by companies new to the U.S.
“These are $40 million and $50 million brands in Europe,” said Andrew Hinkley, vice president of retail development for Elad. “These companies are coming in with huge advertising budgets, and they’re not planning on opening just one store. They’re planning rollouts.”
One example is Marlies Dekkers, a lingerie designer relatively unknown in the U.S. Dekkers, who has nine freestanding stores in cities such as Amsterdam, Berlin, Paris, Bangkok and Antwerp, Belgium, is opening a 1,400-square-foot shop at The Plaza.
The Dutch lingerie and swimwear designer also has a sundress collection. The brand is represented in 1,000 points of sale worldwide, including at retailers such as Galeries Lafayette and Le Bon Marché in France, Alsterhaus and Karstadt in Germany and Coin in Italy.
“Marlies Dekkers is a significant brand for us because it defines the concept of The Plaza Retail Collection,” said Anthony Nicola, general manager of The Plaza. “She understood our concept and goal of defining what a destination business should be in New York.”
Dekkers’ brand is described as sexy, modern and empowering. “She has a passion for fit and quality,” Nicola said. “Her customer is young to middle-aged and someone who is just as concerned with undergarments as the exterior. It’s not only about the style, but how it fits and feels. It’s as important a purchase as a pair of shoes and handbag.”
Arnold Perizonius, chief executive officer of Marlies Dekkers, said: “We have been interested in New York for quite some time. We were impressed by the look of the ‘new’ Plaza and the plans for the retail collection. We think that the prestige of The Plaza, the attractiveness of the location and the strength of the collection are excellent ingredients for success.”
The Plaza’s location, a prime spot on Fifth Avenue across from Central Park, is an asset, but its proximity to Bergdorf Goodman has posed leasing challenges in terms of distribution issues. Many of the world’s top luxury brands have their own stores on Fifth Avenue or Madison Avenue or are sold at Bergdorf’s.
Montblanc was to be part of the retail mix through a franchise, but there have been reports that the company’s flagship on Madison Avenue and 59th Street objected.
“Bergdorf Goodman has been difficult with everybody in terms of letting them have distribution at The Plaza,” said an industry source.
It is for this reason, in part, that The Plaza has pursued foreign brands. Arthur, the retailer of high-quality pajamas and beach wear with whimsical French patterns, will open a store at The Plaza. Arthur’s first U.S. store launched on Madison Avenue and 73rd Street in March.
Eton, a shirtmaker founded in Gånghester, Sweden, is entering the U.S. market with a shop at The Plaza. Some of the company’s shirts have wrinkle-free properties and others are made with exceptionally soft West Indian Sea Island cotton.
“Some companies coming from Europe are looking for credibility for their brands,” Elad’s Hinkley said. “If they say, ‘My first store is in The Plaza in New York,’ it lends a lot of credibility.”
Meanwhile, Domenico Vacca, whose tailored lines for men and women are manufactured in Italy, is said to be close to signing a lease. Vacca, who operates stores on Madison Avenue, Fifth Avenue, West Broadway in SoHo and Rodeo Drive in Beverly Hills, would lease 800 square feet.
The Plaza hopes to open at least part of its retail space by May 10, Hinkley said, noting that Gurka is under construction and Virtu is finished. With 85 percent of the retail space leased, The Plaza is working on filling holes in the assortment of stores, said general manager Nicola.
“Morgenthal Fredericks is finished and stocked and will be open for business this week,” he said. “Manrico cashmere started construction and will be finished by the end of April, The Plaza Boutique is starting construction.”
The Palm Court restaurant has been open since March 3 and the Oak Room and Oak Bar will be up and running by the end of the second quarter or beginning of the third quarter.
“We still have some spaces available,” Nicola said. “There are two categories we are still looking for and considering retailers, and that is women’s fashion. We have three spaces open for women’s fashion. We’re also still looking and having discussions with some freestanding beauty and skin care brands. We’re striving for that destination brand business to make sure we’re part of the shopping circuit. We’re sticking to the concept and haven’t wavered from where we want to be.”