FUN AND FASHION: THE TWO FACES OF MICHIGAN AVENUE
AN INCREASINGLY DIVERSE TENANT MIX ON THE TONY STREET REFLECTS WHAT’S HAPPENING AT RETAIL.

Byline: Elaine Glusac

CHICAGO — Michigan Avenue is developing a split personality.
From Salvatore Ferragamo to the Disney store, Gucci to Viacom, Chanel to NikeTown, the traditionally high-end “Magnificent Mile” is booming with new store openings in the luxury category, while a concurrent trend toward entertainment shops continues to roll up the corridor from Oak Street at the north end to the Chicago River at the south, leaving Michigan Avenue split between serious fashion and serious fun.
In the fashion corner, Chanel recently expanded across the avenue with a block-spanning, 8,000-square-foot store representing a 35 percent increase in space. Tiffany & Co. plans to move to its new, palatial 15,500-square foot complex across the street on Michigan Avenue in November. In the same month, Ermenegildo Zegna will open a two-story, 3,500-square-foot store next to newcomer Salvatore Ferragamo.
Next August, Polo Ralph Lauren will open a three-story Midwest flagship on Michigan, and Prada plans to open a shop on adjacent Oak Street the same year. Bulgari began the luxury boom by opening in May 1996.
On the flip-side, Viacom opened its first store, a 30,000-square-foot flagship on Michigan Avenue, last May with loads of interactive features and merchandise teased from a variety of its entertainment properties, including MTV, Star Trek, Nickelodeon and Nick at Nite classic sitcoms, like “I Love Lucy” and “The Brady Bunch.”
Sources say the Walt Disney Co. will open in the space vacated by Tiffany next year, when an All-Star Cafe will also move into Michigan Avenue. Nike opened its first NikeTown here in 1992.
“Michigan Avenue belongs to tourists,” said Sidney Doolittle, partner in McMillan & Doolittle, a retail consulting firm. “It’s supported by conventions in the city.”
That audience, he adds, is diverse, ranging from high-level executives and their spouses staying at Michigan Avenue’s Four Seasons Hotel, to middle- income employees housed at the Marriott down the street. And, free from the demands of home and family, all are essentially on vacation and free to shop.
“People are in a positive mood when they’re traveling,” said Mira Prendergast, manager of the Bulgari store. “They have more time in their schedule to shop.”
And to eat, drink and be merry.
“You need to provide a wide range of restaurants and entertainment options,” said Doolittle. “The market [for conventions] is 8 a.m. to 5 p.m. and the rest of the time is theirs. It’s natural that there’s a dichotomy on Michigan Avenue.”
According to the Greater North Michigan Avenue Association, 15 million people traverse Michigan Avenue annually, half of them tourists. The city hosts 3.5 million convention-goers each year. Spending on the street in 1996 totaled $1.2 billion.
“We know entertainment or themed retail and dining is the next generation of retail, which Michigan Avenue must embrace,” said Russ Salzman, executive director of the association.
Their goal is, he said, to blend the two with “respect for our traditional business lines, which is high-end [shops].”
Economist Diane Swonk of First Chicago NBD Corp. credits the luxury boom to “the wealth effects of high-income households doing extremely well in this economy.”
She explained that despite the stock market surge, equity gains are normally reinvested. Instead, profit-sharing and bonuses of top executives have accounted for high-end demand.
Entertainment retail, on the other hand, is fueled by restlessness on the part of consumers who want dazzle even as they do such mundane tasks as select underwear.
“It’s a general shopping trend,” said consultant Doolittle. “Once you’ve satisfied the basic shopping needs, it gets a little boring.”
For evidence, he points to shopping malls that have generally experienced a decline in attendance and in time spent per visit. Local suburban malls like Oak Brook and Old Orchard have reversed the trend by investing in revitalization, “including a lot of glitz and dazzle, not just in stores but in restaurants and theaters,” he said.
Likewise, Michigan Avenue’s constituents, many of them temporarily housed on the street, are looking for nearby places to pass their free time. That includes eating as well as shopping. When Viacom opened, it introduced its Station Break Cafe, virtually alone on the avenue — not housed in a mall — in offering good quality, moderately priced food featuring salads, wraps and smoothies.
Lettuce Entertain You, which runs Station Break, also runs Foodlife, an upscale food court, in the Water Tower mall.
“A big success story [for the store] has been the cafe,” said Paul Coletta, vice president of product development for Viacom Retail Group. “It has drawn in traffic at odd times, like lunch, and there are not many places on Michigan Avenue to get a quick bite. And it’s helped with retention. If shoppers get hungry, they can get a bite rather than leave.”
All-Star Cafe will give them a run for that business. Sources say the theme restaurant has pledged to tone down its garish signs. Its future home at Ohio and Michigan could be the bridge between tony Michigan and touristy River North, the neighborhood just west that’s home to Hard Rock Cafe, Rainforest Cafe and Planet Hollywood.
Disney also recently announced it would build DisneyQuest, a 100,000-square-foot indoor theme park, separate from the anticipated Michigan Avenue Disney Store, on an adjacent property at Ohio and Rush. It’s slated to open in 1999.
In light of these plans, the Michigan and Ohio intersection will likely become the hub where the more pricy retail axis, Michigan, meets the mass-oriented entertainment strip, Ohio.
A mix of the two, Viacom features a Star Trek transporter to “beam up” shoppers, a videotaped MTV Rant Room and snickering statues of Beevis and Butt-head, with whom visitors can be photographed.
On its retail racks, Viacom sells everything from gooey toy eyeballs that stick to the wall for $1.50, to a customized Vespa motor scooter for $6,000.
In between, there are lots of inexpensive items, like fashionable $16 baby T-shirts and $35 metallic dresses.
Under its Found by MTV and Brought to You by labels, Viacom introduced vintage clothing to Michigan Avenue, where it sells for at least double what the Salvation Army gets elsewhere in town.
Viacom executives insist they are quite at home on the corridor alongside the Cartiers and the Chanels.
“FAO Schwarz is about novelty, and Ferragamo is fashion. Viacom is a good marriage of novelty and fashion,” said Coletta.
Like fashion, he said, “We trade on the aspiration of ‘I want to be’ in the MTV area.”
High-end retailers also claim the entertainment bunch are congenial neighbors.
“Retail is moving in various directions,” said Michael Christ, vice president of Tiffany’s central region. “Michigan Avenue represents what’s happening in retail.”
The mix of fashion and fun merchants “adds vibrancy and life to the avenue,” said Christ. “There’s no reason to believe a shopper of Tiffany or Ferragamo won’t stop at Viacom. Cross-activity will happen for all of us.”
“Entertainment stores add traffic to the avenue,” agreed Massimo Ferragamo, president of Moda Imports Inc., North American distributors for Salvatore Ferragamo.
According to Bulgari’s Prendergast, the street has “tennis shoes and jeans and furs.” She said, “In addition to jewelry, we have perfume and scarves. We can open the doors to more clients.”
In many ways, Michigan Avenue’s image battle was fought — and lost, say some observers in 1995 — when Filene’s Basement moved in.
“The mix of tenants on Michigan Avenue is important,” said Karen Klutznick of Thomas J. Klutznick Co., developers of the lot that will house future Tiffany, Polo, Pottery Barn and Banana Republic stores. The upscale retailers impart prestige even to shoppers of the Gap nearby and make the street worth traveling to.
“It makes shopping exciting,” she said.
And there’s a limit to who can afford Michigan Avenue, essentially creating a high barrier to entry. “It’s really expensive [to rent on the street],” said Klutznick. “That’s going to deter a certain kind of tenant.”

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