Byline: Sharon Edelson

NEW YORK — SoHo is turning into designer central.
As much of the area’s art crowd relocates to the city’s Chelsea section, large gallery space is freeing up for stores downtown, and SoHo is being newly populated by national chains, high-end American designers and lesser-known Europeans.
The new and prospective tenants represent a variety of price points and levels of fashion sophistication, from the utilitarian Old Navy Clothing Corp. to high-end Gucci to Joseph, the London-based retailer that is opening a 500-square-foot pants store this week on Greene Street.
“SoHo is younger and funkier, and the pants seem to serve that purpose,” said Barrie Levett, general manager of Joseph. “In terms of fashion retailing, I’m pleased with the direction SoHo is going in. Some of the galleries are moving out and it’s becoming more of a shopping than a cultural thing.”
“The catalyst for the space was the galleries,” said Robert Cohen, senior director of Garrick Aug. “They’re dinosaurs, and they hogged all the space. With the crash of the art market in the late Eighties, they couldn’t take 5,000 or 10,000 square feet, and it freed up all this wonderful space. Also, SoHo was taken more seriously by national chains. Now Helmut Lang and this whole next wave is trying to locate down there.”
Last week, Costume National signed a lease for a 3,500-square-foot space at 108 Wooster Street, between Prince and Spring Streets.
The store will be the fourth worldwide for Costume National, the edgy Milan-based collection designed by Ennio Capasa. It will carry Costume’s women’s wear, Costume Homme, shoes and a new handbag and accessories line.
“This is the largest store by far,” said Stella Ishi, president of Staff USA, a division of Staff International, which manufactures the collection. “When we started looking, we researched Madison Avenue, but Costume is really more of a downtown brand.”
The location, about two doors away from Comme des Garcons, is slightly off the beaten path, which is exactly what Costume wanted. “West Broadway is too commercial,” Ishi said.
Apparently, it is what other designers wanted as well. Ishi said control for the lease became a contest between Costume and Helmut Lang.
Lang is reportedly looking elsewhere in SoHo.
Others said to be searching for space in SoHo include Ralph Lauren, who may or may not be considering a 55,000-square-foot site at 387 West Broadway, between Broome and Spring Streets, for a Polo Sport unit.
A Lauren spokesman said the designer is not interested in the space; however, real estate sources said the building was purchased for Lauren by a group of British investors.
Some other uptown denizens are trying to make their way downtown. Gucci is looking in SoHo as well as on Madison Avenue, and Giorgio Armani is scouting SoHo for an Emporio unit.
Old Navy Clothing Co. is reportedly close to leasing a 25,000-square-foot site at 503-511 Broadway, between Spring and Broome Streets. An Old Navy spokesman said he had no knowledge of the site, however.
Bisou-Bisou will open at 474 West Broadway in mid-to-late April and Laundry by Shelli Segal will open at 97 Wooster Street this summer. Dolce & Gabbana signed a lease for a 5,000-square-foot space at 434 West Broadway for a D&G unit. And Vivienne Tam will open her first store at 99 Greene Street in mid-April.
These stores follow a wave of openings last year, which included Miu Miu, Kate Spade, J. Crew and Rene Lezard.
Eileen Fisher, a designer known primarily for knit sportswear, is close to signing a lease at 395 West Broadway. The 4,500-square-foot space is currently occupied by the Christian Rose Gallery. Fisher has also leased a store on Main Street in Westport, Conn., and is looking for additional locations in Washington and downtown Chicago.
Zara, the Spanish retailer of trendy fashions, is closing in on a site in SoHo at 560 Broadway, between Prince and Spring Streets. The 10,000-square-foot space currently is occupied by Duggal, a photo processor.
“SoHo is so hot right now,” said a spokesman for Zara. “Landlords that told you they wanted $100 a square foot turn around and say, ‘We can get $120, so would you like to pay $125?’ They are taking advantage of the situation.
“We have been looking in SoHo for a while and are in negotiations on that site,” the spokesman said. “We are currently looking for other sites, knowing that this deal is not an easy one. We are looking on West Broadway and have several sites selected.”
Zara is part of the Inditex group, which has become a fashion retailing phenomenon with its fast-paced expansion in Europe and the Americas. With annual group sales of $1.2 billion, Inditex churns out some 40 million garments a year under the Zara name for its 550 stores in Spain, Portugal, France, Belgium, Greece, Cyprus, Mexico and the U.S.
“Zara is not known in the U.S.,” the spokesman said. “We’re going to do some public relations and advertising, including bus shelters. We could have 20 to 30 stores in New York, depending on how well the two new stores do.”
There is some concern over whether the new stores will be able to do enough volume to justify the rents. In two years, rents have jumped from an average of $50 to between $90 and $140 depending on the street. Prince and Spring Streets, for example command the highest rents, while Wooster and Greene Streets have the lowest.
“I’ve never seen a market quite like this,” said Caroline P. Banker, senior vice president of New Spectrum Realty Services. “Never have there been so many good tenants in the marketplace.
“What’s important for SoHo to survive on solid footing is that it not resemble a mall in middle America, and to date it’s still maintaining that unique flavor. If SoHo loses its individuality and becomes too national, then it runs the risk of getting into trouble.”

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