Byline: David Moin / Nina Farrell / Ruth Benoit / Alessandra Ilari / Kavita Daswani / Koji Hirano
These are happy days for the world’s toniest shopping districts. All over, there’s a new, younger and more eclectic layer of well-off consumers, hitting the streets and eager to indulge in the good life. Landlords are raising rents, leases are turning faster than ever and the districts are widening their reach.
Is it all fleeting, just a stock market crash away from calamity? These merchants are too busy to care.
Crazy for Madison
NEW YORK — There’s a madness on Madison Avenue, and it’s contagious.
Commercial rents are rocketing out of control. Lease turnover is frenetic. Luxury conglomerates are muscling in. And the boundaries of Madison Avenue’s high-end heartland are stretching north and south as the hunt for space intensifies.
And profits? That’s practically an afterthought. Designers desperately want flagships on Madison Avenue, the world’s foremost and fastest-changing luxury shopping district, at whatever cost.
Who’s got the bug?
Michael Kors is opening at 76th Street and Madison around September, and LVMH’s Celine, where Kors has top design responsibility, is abandoning its 57th Street site and planting a flagship between 60th at 61st in July, in a portion of the former Shanghai Tang store. Donna Karan Collection plans to open a site between 68th and 69th Streets in February 2001.
Then there’s Eres, the high-priced lingerie label owned by Chanel, which is moving in between 58th and 59th Streets in September. Also, Carolina Herrera is moving into the former Givenchy space on 75th Street. She bought the whole building from Givenchy, who grabbed space on the corner of East 74th Street.
Over the past year, there’s been some major additions, including the Vendome Group, taking the entire block from 69th to 70th. More recently, Steuben opened on the former site of Shanghai Tang.
“Madison is the premier shopping street in the world — rivaled by none,” says Barneys New York chairman and chief executive Allen Questrom. “There is a higher level of luxury,” and tremendous inflation in the cost of operating, he adds.
When Barneys plunked down its big flagship on 61st Street in 1994, it drew enormous attention to the area and a younger fashion audience. It also cost an “awful lot of money,” Questrom acknowledges. “Barneys couldn’t afford it then, and we would never be able to do it now.”
Designers see it as well worth it. “There is nothing in the world like the traffic on Madison as far as high-end, and it’s pretty constant,” says Kors. “The economy has brought a whole young generation to shopping on Madison, a generation of people that prior to this boom was in cargo pants.”
Still, the cost of entry is staggering. “Rents are so incredibly prohibitive between 57th and 72nd Streets,” states Jeffrey Paisner, senior managing director, The Lansco Corp. retail leasing. “Depending on the size of the store, rents are between $475 to over $600 a square foot. Maybe a jewelry store can make money, but there isn’t a shoe tenant or apparel tenant that can make a profit at those rents.”
Ridiculous rents and the space crunch are pushing designer businesses uptown and downtown, stretching the limits of Madison’s luxury lane beyond 72nd Street.
The Big Roundup
LOS ANGELES — Shopping on Rodeo Drive is truly a spectator sport. There’s a stream of humanity ranging from glammed-out TV and movie stars to tourists in bermuda shorts. And while the tourists are mainly there to gawk, the locals come for the five-block array of pristine designer flagships that safeguard Rodeo’s reputation, cheesy glitz and all, as the dressing room for Hollywood’s rich and famous.
Rodeo Drive and its Via Rodeo pedestrian street houses such top labels as Versace, Gianfranco Ferre, Tiffany, Iceberg, Charles Jourdan and Escada Sport. High-end shops here such as Christian Dior, Hermes and Louis Vuitton here now mingle with a more eclectic mix of boutiques.
“Luxury today is about how it makes you feel,” says Ron Michaels, Louis Vuitton’s store manager and president of the Rodeo Drive Committee. “Our clientele has gotten younger, between 20 and 30 years of age, which is right where you want to be in the fashion business,” Michaels says. “We have a lot of new people coming into the store that we haven’t seen before.”
Ariana Lambert, West Coast public relations coordinator and director for the 8,000-square-foot Bottega Veneta store here, also reports a steady climb in business, but attributes it to a local and celebrity clientele, rather than the tour-bus set.
Not everybody can make it on Rodeo. Tommy Hilfiger opened a big store here in late 1997, but he is already folding up his tent. “We will most likely be looking for a smaller location with more foot traffic,” says Catherine Fisher, senior vice president of global communications for Hilfiger.
Some other casual brands are making a go of it here, however, such as XOXO, Guess and BCBG. “Rodeo has a long history of being snooty,” Michaels says. “But what we have tried to do over the last five years is to be inclusive, not exclusive.”
Still, it is the presence of stores like Gucci, Prada, Chanel, Giorgio Armani and Versace that will always draw the flocks of tourists. But the fact is that they also continue to appeal to the locals.
Movement on Montaigne
PARIS — Compared with the throngs choking New York’s Madison Avenue and the glitz that coats Hollywood’s Rodeo Drive, there’s not much action apparent along the wide, tree-lined Avenue Montaigne, this city’s most prestigious retail address.
But don’t be fooled. Inside such stores as Joseph (the British retailer that for years was the only source in Paris for Manolo Blahniks) or the sleek two-level Prada, the shopping frenzy is in full swing.
With approximately 40 designer stores, outnumbering any other strip in luxury brands, Avenue Montaigne forms one leg of the “Golden Triangle” that also includes Avenue Francois 1er and Avenue George V.
Old mixes well with new. The landmark Christian Dior flagship sits on the Avenue. Dior founded his couture house in 1946 at 30 Avenue Montaigne. Just across the street is L’Avenue, which draws an ideal trendy crowd, a mixture of hip young girls and high-powered fashion regulars, including John Galliano.
Recent retail stirrings on the Avenue include Chanel adding about 5,000 square feet to its boutique by the end of the year, and Escada unveiling its new 6,800-square-foot space. Montaigne is not the only growing game in town, however. The Faubourg Saint-Honore is holding its own, thanks to its anchor, Hermes, where the waiting list is still quite long for the Kelly bags and the ready-to-wear line designed by Martin Margiela is available exclusively.
Other fashion must-stops on the Faubourg include Gucci and Yves Saint Laurent. As the Faubourg Saint-Honore becomes the Rue Saint-Honore there’s Collette at number 213, a 7,700-square- foot store that could alone qualify that street as a fashion shopping district. The latest to sign up for space on the Rue Saint-Honore is Joseph Ettedgui, who will open his fourth store at 227 Rue Saint-Honore late this summer.
MILAN — The high-end retail scene in the chic “Golden Triangle” shopping district here couldn’t be more colorful than right now — literally.
Fashion’s fixation with color has the neighborhood — comprising Via della Spiga, Via Sant’Andrea and Via Montenapoleone — pulsating. Merchant’s sales are brisk, their boutiques flooding with American, British and Japanese shoppers spurred on by favorable exchange rates as well as spring’s vibrant baby pinks, lilac, mulberry pink, sage green and apricot orange.
“At the moment, there’s more disposable cash. It’s a great moment for luxury goods,” says Alessandro Ghisolfi, head researcher at Gabetti, a leading Italian real estate agency. “There’s a high demand for rents in this area and a waiting list of between three and five months.”
In the ranks of the old guard here are Prada, Gucci, Giorgio Armani, Hermes, Gianfranco Ferre, Chanel, Etro, Valentino and Tod’s. New recruits include Tiffany’s, Malo, Piero Milano and Camper shoes, a funky store that sells unisex footwear, reminiscent of soccer shoes from the Fifties.
Says James E. Quinn, vice chairman of Tiffany & Co. “It’s an important shopping street and there’s good competition.”
And plenty of it. Many in town already, including Armani, Celine and Louis Vuitton, are planning renovations, while new stores are in the works for Prada, Vestimenta apparel and Borbonese accessories.
Apparently, there’s enough business to go around. Shoppers are said to hardly bat an eye at the prices, as long as it’s for a fashion-forward or unique item. The hot sellers are $600 cashmere twinsets, $300 mules and $900 hand-finished bags.
“People want to renovate their wardrobes and color acts,” says Clementina Lobosco, vice manager at La Perla boutique for lingerie. Its seamless and embroidered silk tulle bras and panties that retail for $200 just won’t stop selling, Lobosco claims.
It’s a “frizzy, lively and colorful” season for Bottega Veneta. Retail manager Monica Morresi says the long seasons of black and gray are in the past. The number-one bestseller: a rectangular, high shoulder bag in Bottega Veneta’s signature woven leather strips in coral red and adorned with matte metal hardware. It goes for $700.
Malo opened its first boutique in Milan in mid-February and saw sales in the first two months rush past expectations by 50 percent. “Clients steered clear of black; they abounded with orange, wisteria, rose and cream,” says manager Francesco Pannega.
“If clients like the style, they don’t even ask about the price,” says Pannega.
Big Brand Central
HONG KONG — The busloads of Japanese tourists are back, and they’re jockeying for position now with shoppers from mainland China. Meanwhile, dozens of big-name international retailers sit on secret lists held by shopping-center retail managers, in hopes of an opening.
Things are hopping in Hong Kong Central. “Pedder Street and Chater Road are considered Hong Kong’s Fifth Avenue,” says Paul Husband, managing director of Husband Retail Consulting.
These two streets in the past 12 months have hosted an unprecedented parade of brands — Hugo Boss, Ralph Lauren, Cerruti, Louis Vuitton, Loewe, Cartier, Piaget, Chanel — either building on existing spaces or setting up shop for the first time. They are mostly clustering in two upscale office and retail towers: The Landmark, home to numerous LVMH brands such as Vuitton, Loewe, Celine and Christian Dior, and Prince’s Building, where Chanel, Cartier and Piaget expanded last year.
Last month, Alberta Ferretti and Helmut Lang both opened stores in The Landmark. And Bottega Veneta is soon to open a second location in Central.
Hong Kong Land, the city’s most powerful landlord and owner of Prince’s Building, The Landmark and other prestigious sites in Central, is exploiting the economic upturn to give Central a hip new image, built around the tag line “Brand Central.”
Rents on Pedder Street reflect the buzz. A 1,000-square-foot store in The Landmark can run from $38,500 to $58,000 a month.
Ginza Getting Brighter
TOKYO — The sun is peeking out again on the Ginza.
Tiffany’s flagship is drawing big crowds, and foreign designers are recording slight gains amid the reviving economy. Hermes and Max Mara are planning flagship openings this year, and newcomers such as Sephora and Boots are building customer bases.
“Japan is still a big and attractive market for foreign luxury brands,” says Masayoshi Soutome, senior staff researcher at Mitsubishi Research Institute.
“Japanese love brands, and this won’t change, however the economy may be,” says trend analyst Toru Kanyama. But Ginza is facing some competition for this love, as other retail districts are more aggressively attracting upscale retailing.
The Marunouchi district, now dense with office buildings, is expecting a deluge of retail via real estate developer Mitsubishi Estate. Since the late Nineties, the district has seen a rush of luxury openings, including Gianfranco Ferre, Wedgwood, Giorgio Armani and Comme des Garcons. Trussardi and Prada also recently opened shops.
Osaka’s Shinsaibashi area is also attracting luxury tenants. Along Midousuji and Nagahori Streets are more than 50 brands including Chanel, Versus, Max Mara, Krizia, Jil Sander, Gianni Versace, Louis Vuitton, Ermenegildo Zegna, Alfred Dunhill, Dolce & Gabbana, Marc Jacobs and Giorgio Armani.