MEXICO CITY — “It’s difficult to find a store like this in the world, in terms of its brand offering and depth.”

So said Carlos Salcido, marketing director of Grupo El Palacio de Hierro, which unveiled its new, 645,830-square-foot flagship here Thursday with a gala event. Located in the city’s posh Polanco quarter, the four-story building will also house Latin American flagships for Louis Vuitton, Prada, Gucci and Dior, among other brands looking to court Mexico’s growing number of well-heeled shoppers.

“This is our flagship store and their flagship store,” Salcido said, adding that it will also be Mexico and Latin America’s largest luxury department store. More than 10 major high-end brands, including jewelers Tiffany & Co. and Bulgari, will also operate large boutiques in the outlet, which the retailer is calling El Palacio de los Palacios [“The Palace of the Palaces”] in an ad blitz.

With a $300 million cash injection to enlarge the older store, the new Polanco flagship is the biggest store investment in the retailer’s 125-year history.

“If we were crazy, I think the brands would have told us,” Salcido said, insisting that Mexico’s growing yet volatile economy can support luxury consumption on a much grander scale.

“We did many studies but what we really trust is our own stores’ performance,” Salcido said. “In the past 10 to 12 years, luxury has been growing 12 to 18 percent a year on a same-store basis.”

Mexico’s middle class is also growing, consuming more upmarket brands amid a credit boom while the soaring U.S. dollar is prompting more people to buy locally, instead of jetting to Miami or New York.

In Polanco, rich Mexicans will also be able to snap up limited-edition items and shop a broader selection. “Many luxury-store managers save limited-edition items for their top clients but when you are a Mexican abroad, they don’t know you,” said El Palacio communications director Francoise Lavertu. “Store managers will now have those items for Mexicans who want to buy them here.”

Because many shops-in-stores in the new Palacio are flagships for the region, “You may have a bigger offer than you have in Houston, Phoenix or Miami,” added Salcido. In the case of Louis Vuitton or Tiffany, the merchandise array may be similar to that found in Las Vegas, Rodeo Drive or on Fifth Avenue, he added.

Salcido, who headed LVMH Mexico before joining El Palacio, declined to provide a revenue forecast for the store, which is located a stone’s throw from Mexico’s most expensive Masaryk shopping street, but said it will become the 14-strong chain’s main working horse.

The new store comes as El Palacio poached Juan Carlos Escribano from Spain’s Grupo Cortefiel in August to take over as the retailer’s director-general from Jose Maria Blanco Alonso, who retired.

The transformed building’s ground level carries luxury and beauty brands in a mall-like setup in which all stores have an open facade. Women’s and kidswear retail on the second story, followed by men’s, technology and gourmet foods on the third. Home decor also sits on the third level.

Overall, the new building will stock 500 brands, with many international ones (such as Chanel or Miu Miu) debuting in the department store or in the Mexican market.

Mexican architects Sordo Madaleno led a gutting project to keep part of the older red-brick pyramid structure (which houses El Palacio owner Grupo Bal’s enlarged headquarters) to blend with the neighborhoods’ architecture but fit with its importance as a high-end shopping destination. A mall-like ground floor boasting window facades was built to enable brands like Prada and Gucci — which built three shops-in-shops — to entice shoppers to their independent boutiques. TPG Architects designed the ground- and first-floor interiors, while the second- and third-floor interiors were designed by Gensler.

This is perhaps the biggest symbol of the transformation, differentiating Polanco from the likes of Saks Fifth Avenue, Le Bon Marché or Selfridges, said Salcido. “Selfridges is more of a department store while our ground floor is more of a luxury mall,” Salcido said. He conceded Polanco is like a “Mexican Selfridges” but more devoted to Mexican shoppers.

According to Salcido, El Palacio scoured the world for design ideas. “We noticed many Asian stores use the store-in-store concept while in the U.S. there is a lot of wholesale. We wanted to have a mix of both.”

The store has imported Italian calacatta marble and porcellanato tile making up much of the structure comprising 3.4 million tons of steel and 65,000 tons of aluminum. A digital stained-glass dome sits atop the building, which also features several sculptures, lamps and other decorative items to pay homage to Mexico City’s main tourism landmarks and neighborhoods.

Straddling a whole block of pricey Polanco real-estate, the ground floor houses more than 110,000 square feet of luxury retail compared to about 30,000 square feet for the chain’s other Santa Fe flagship in Mexico’s capital, Salcido said. It boasts two main entrances and atriums bisected by a main corridor themed on Avenida Reforma, Mexico City’s answer to Park Avenue, and boasting lamps and decorative items resembling landmarks such as El Angel and La Diana statutes.

Despite the mall-like set up, the shops’ open facades allow brands and customers to interact freely, similar to a department store, Salcido said, as he pointed to multibranded sections stocking fine jewelry and watches.

Hublot and Breitling are new arrivals while the spaces will also see enlarged counters for Michael Kors and other brands. In jewelry, Cartier has an expanded boutique while Spanish jewelry chain Aristocrazy will retail for the first time. There is a also a high-end bag and leather goods area nearby featuring a Givenchy corner and new counters for Chloé.

In the beauty section, enlarged to almost 12,000 square feet from about 8,000 previously, Carolina Herrera fragrances will have its second global counter after Dubai while brands such as Sisley will operate a 2,000-square-foot store with a beauty clinic, its fourth in the world. Nars, Benefit, Make-Up store and Acqua di Parma (which will open its first global boutique) are new arrivals, Salcido said. Labels like Spain’s Natura Bisse, Kiehl’s and MAC will also boast much larger counters, with the latter operating its largest Mexican store.

The second story houses ready-to-wear, which Salcido said marks a big bet for El Palacio, which has traditionally focused on selling luxury accessories and footwear. The space will contain Carolina Herrera, Dolce & Gabanna, Elie Saab and Chloé, all of which will expand or begin selling in El Palacio. In other highlights, Max Mara is a new arrival while Hugo Boss’ first women’s boutique will also make a Mexican debut, Salcido said.

Brands like Ted Baker, Purificación García, Ralph Lauren and Adolfo Domínguez will also have enlarged offers in a multibrand section nearby.

El Palacio de Hierro, which has a growing private-label franchise, will operate in-store shops for its main Chester & Peck clothing label as well as for other brands Pertegaz, Wild & Alive and Epsilon, said Salcido, adding that the chain hopes to sharply expand the franchise, which accounts for 10 to 12 percent of current sales.

The firm, which is owned by Alberto Baillères, one of Mexico’s wealthiest men, also hopes to expand its retail franchise business (which manages Tory Burch, Michael Kors and Mango) beyond 150 stores currently.

Polanco will see the entry of new men’s brands on the second level including Brioni, Scappino, Flower and Carolina Herrera’s first men’s boutique, according to Salcido, adding that the space will feature the chain’s largest Chester & Peck store. There will be bigger selection for men’s formal suits, shirts and underwear.

Topping it all off is a new gourmet foods and spirits section where a bottle of Château Le Pin can fetch as much as $5,500.

Then there are the two helipads to enable shoppers to whiz over Mexico City’s often head-banging traffic.

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