Manhattan’s Meatpacking District appears to be getting overcooked.

This story first appeared in the April 16, 2012 issue of WWD. Subscribe Today.

It’s a changing scene, drawing merchants with more mass appeal and tourists as of late, and showing signs of dissuading high-fashion tenants and the designer clientele. In the latest fashion departure, Rubin & Chapelle will shut its store today and relocate to Mercer Street in SoHo sometime this summer, WWD has learned.

Another longtime fashion tenant, Stella McCartney, recently moved out to a new spot in SoHo, and Alexander McQueen is said to be considering the same.

“Our lease is up in the Meatpacking District. We have really enjoyed being here. It was very exciting to see the momentum and the changes. But we feel like since mass-product brands moved in, that’s really changed the coloration of the clients,” said designer Sonja Rubin.

The Meatpacking District is located on the West Side just south of Chelsea. Until the designer crowd started opening shops, the district was more associated with prostitution and drugs. In recent years, especially since the opening of the High Line elevated park and various trendy hotels, the area has become a tourist mecca, encouraging landlords to push up rents to $300 to $600 — and sometimes higher — a square foot, which is about twice as much as SoHo, south of Houston Street. Plans to open the Whitney Museum of American Art on Gansevoort Street in 2015 are also pushing up the area’s rents, generating concerns that Meatpacking rents approach Madison Avenue rates, which currently peak at $1,000 a foot on ground level in the 60s.

“When we first opened, we were the only fashion store on the south side of 14th Street,” added Kip Chapelle. “There were still many meatpackers here then, and no hotels. The atmosphere was quite special. We loved it.”

The Rubin & Chapelle shop, designed by Annabelle Selldorf, opened in 2002 around the same time Stella McCartney opened for business, and not long after Jeffrey’s launched on 14th Street in 1999. But Rubin & Chapelle’s lease coming up for renewal convinced the designers it was time to relocate.

“There has been a transformation” in the Meatpacking area, said Rubin. “We were kind of the first ones to open a store here. It was very different then. It used to be the idea of discovery and exclusivity and artsy-ness. That was why we came. We had a great time in this neighborhood but are really excited about our new space. We feel like SoHo has a revival and would like to be part of it.”

The designers declined to reveal their SoHo location, at the request of the current tenant. They said it will be similarly sized to the Meatpacking unit at 2,200 square feet.

In recent years, retailers of a different ilk have popped up on and around West 14th Street, including Sephora and Apple. Soon Ugg will move in, too. “It’s so crowded Saturday and Sunday, you can’t walk the streets,” said one retailer.

Other sources have characterized the performance by retailers in the Meatpacking District as mixed, with Scoop and Apple among the more successful, and traffic spotty during the week but heavy on weekends. It has something to do with price points, according to Rubin. Stores such as Scoop, she noted, have an assortment in the $300-to-$400 range. Theory is also in the range. “We average $1,500” per piece, Rubin said.

More changes to the neighborhood are inevitable, as one Midtown retailer observed. “For a lot of folks there, leases are coming due,” considering many signed leases a decade or so ago that would be coming up for renewal. With the rents only getting higher, “you have to do a lot of volume to make the numbers work,” he said.

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