HILFIGER SIGNS TWO LEASES

Byline: Kristin Young

LOS ANGELES — Tommy is on the move.
Real estate sources confirmed that Tommy Hilfiger Corp. has signed two leases for two separate locations on Third Street Promenade in Santa Monica, Calif., as the days count down to the closure of Hilfiger’s Beverly Hills flagship. The leases were signed over the holidays.
Hilfiger will close its 20,000-square-foot flagship at 468 North Rodeo Drive on Feb. 3.
The New York-based apparel company has taken a 4,500-square-foot location, formerly occupied by Italian restaurant Remi, at 1451 Third Street Promenade. Guess, Anthropologie, Bebe, French Connection and Urban Outfitters all operate stores on that block.
Hilfiger will assume the lease by the end of February and plans to open a Tommy Jeans store there by summer, said sources.
Hilfiger also snapped up a 6,000-square-foot location at 1424 Third Street Promenade, taking over the John Anthony Apparel store there. The company plans to open a Tommy Hilfiger Sportswear store in that location. Further terms of the deal were not disclosed.
Representatives at Hilfiger declined to comment on the leases.
Hilfiger announced almost a year ago that it would shutter its two enormous flagships — in Beverly Hills and London — that were used primarily as publicity vehicles but were unprofitable. The West Coast flagship, an image builder that catered to the entertainment industry, was built with an all-white exterior, columns and a rotunda. Inside, sweeping staircases and a domed ceiling dominate the atmosphere. Some describe it as a miniature White House.
But company representatives had said the store wasn’t attracting the right customer. Plans to open smaller locations in areas that would attract a “younger, hipper” crowd soon ensued. Third Street Promenade was considered such a location.
A real estate broker who handled the Remi lease confirmed the company had been scouting locations there for about a year.
“I think it’s a great deal for Tommy Hilfiger,” said Randy Starr, executive vice president of Tenzer Commercial Real Estate. “They are, in my opinion, coming to the right place. Their target audience is definitely there. And the locations they’ve chosen are the most active on the promenade.”
Hilfiger paid $825,000 in key money to take over Remi’s undervalued lease — about $4.25 a square foot monthly. The lease expires in nine years, according to Starr. Current property values on Third Street Promenade are double that amount — about $9 or $10 a square foot each month. The key money could save the company about $2.5 million in rent over the nine-year lease period, he said.
Hilfiger is planning to open two additional locations in the Los Angeles area, according to inside sources. A space on Colorado Boulevard in Old Town Pasadena, Calif., is reportedly in the negotiation phase.
Meanwhile, there are still no takers for the $144,000-a-month lease on Rodeo Drive.

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