RETAIL REIGNITES IN THE CITY OF LIGHT
Byline: Robert Murphy
PARIS — The days of wine and roses are back for the Paris retail scene.
It’s percolating again after a protracted period of hibernation. Not only is the city wiping the sleep from its eyes, it is quickly asserting itself as one of the world’s hottest retail showcases.
The action is fast and furious. For instance, Joseph has picked the French capital for its biggest store in the world; Missoni just inaugurated a new three-story flagship on the Faubourg Saint-Honore and Mandarina Duck is coming to town with an innovative concept shop.
There’s more. Miu Miu will expand its presence on the Left Bank in early October, Fendi will open its first freestanding store here in January on the Rue Francois Premier and a new Prada unit follows in February. In addition, Gucci and Chanel are renovating key locations.
“Paris is again the capital of fashion,” said Paolo Trento, chairman of Finduck, parent company of Mandarina Duck, which is opening its Paris flagship on the Rue Saint-Honore in October. “A few years ago, London had the edge. But fashion is cyclical.”
“It’s become more important than ever to be in Paris,” said Angela Missoni, creative director of the family-operated Italian firm. “A couple of years ago, people debated the importance of opening in Paris versus London. But now, it’s clear that Paris has a certain edge. Personally, I used to think Paris was just an image booster. I never thought business could be so good here. Quite frankly, I was surprised.”
Missoni opened a three-level, 3,800-square-foot flagship at 1 Faubourg Saint-Honore last month. The shop’s location is significant. Rue Saint-Honore has become the epicenter of Paris cool, since the hip retail emporium Colette, which mixes Prada and Gucci with younger designers like Jeremy Scott and Veronique Branquinho, opened there several years ago. Thronged with shoppers every day of the week, Colette now often resembles a hot nightclub more than a luxury fashion depot.
The new names pouring into the vicinity are ostensibly angling to profit from a Colette trickle-down effect.
“Colette was one of the key players in giving Paris retail a touch of cool,” said Beatrice Bongibault, an industry analyst who has held top managerial posts at Chanel, Christian Dior, Valentino and Escada. “It was first innovative store in Paris to treat retail like a total concept.”
“Colette sparked a trend for smaller shops that give a personal take on a fashion, compared with the hegemonic vision given in monobrand stores,” said Joseph Ettedgui, who will inaugurate the biggest shop of the 25-unit Joseph chain on the Rue Saint-Honore in this month. “The Rue Saint-Honore is the place to be right now. It’s where things are happening.”
As Missoni put it, “It was important to be in this neighborhood. Along with the Avenue Montaigne, it is the heart of Paris retail.”
Ettedgui said, “The Avenue Montaigne represents the establishment. The Saint-Honore district represents the young, fashion-conscious generation.”
Ettedgui selected young French architect Christian Bicher to do the design work for the twin-level, 35,000-square-foot Joseph shop and restaurant.
“I wanted a very Parisian feel, and also wanted to tap into the new wave of French energy which is represented by the new generation, which is reflected in magazines like Numero,” Ettedgui explained.
By including a restaurant and offering hip magazines and books in the store, Ettedgui is following the example set by Colette, which has its own in-shop eatery and sells trendy reading material. Ettedgui projects the new Joseph unit will do between $2 million and $3 million in first-year sales.
Mandarina Duck is pitching its tent a block away from Colette.
“It’s the best neighborhood for fashion brands right now,” said Trento, who expects the 3,000-square-foot unit, designed by Dutch architectural firm Droog Design, to do about $1.3 million in sales this year.
Meanwhile, Fendi has picked the Rue Francois 1, at the intersection of the Avenue Montaigne, to open its first Paris store. The 7,000-square-foot unit will carry men’s and women’s wear, as well as shoes and accessories.
“Compared to other European capitals, Paris is a very important point of reference for elegance and style,” said Carla Fendi, president of the Fendi Group.
And Paris is much more than the Rue Saint-Honore and the Avenue Montaigne; these two are not the only areas attracting newcomers.
“The Left Bank is also an attractive area, because that’s where a lot of Parisians shop,” said Andrea Pinto, an industry consultant, based in Italy, who this year stepped down as managing director at Mila Schon.
Take the Rue de Grenelle, for example, home to shops from Martine Sitbon and Sergio Rossi; Miu Miu will inaugurate a 14,000-square-foot shop there.
Meanwhile, big-name fashion stores are not the only generators of retail activity here. The city’s department stores, including Printemps, Bon Marche and Galeries Lafayette, recently have preened their feathers and increased sales. At the Galeries Lafayette Boulevard Haussmann flagship, for example, sales jumped 10.2 percent in the first four months of the year.
According to fashion executives, Paris is a particularly attractive investment now, because real estate prices in central neighborhoods are significantly less than in comparable sites in cities such as London and New York.
Commercial space on prime retail strips like Saint-Honore and Francois Premier go for between $7 and $25 per square foot a month. However, that is changing fast as prime real estate becomes more scarce. Prices on the Rue Saint-Honore have already increased 30 to 50 percent over the last three years, according to real estate agents.
“It’s about 50 percent less to open in the right neighborhood here than on New Bond Street in London or Madison Avenue in New York,” claimed Alain Adjadj, who operates some 20 designer stores in France and the U.K., including the Calvin Klein and Dolce & Gabbana flagships on the Avenue Montaigne.
“It’s so much more expensive to open in New York,” said Pinto. “If a company has the opportunity to open in Paris now, it’s a great plus.”
This is not to say that those other towns can be scratched off anyone’s list.
Pinto said he recognizes that Paris is again becoming an important pole, especially from an image standpoint. “But from the business side, London and New York are still important for any firm with global aspirations,” he added.
“Paris and London are equally important for an American firm,” said Jim Hardy, vice president and managing director for European flagships at Polo Ralph Lauren. “With New York, they are the three most cosmopolitan centers in the world. They are all good for business.
“But Paris has renewed appeal,” Hardy continued. “It was sleepy for much of the Nineties, and now there’s a new sense of energy. Retail is booming, new restaurants and hotels are opening. People want to be in Paris.”
A healthy economic environment is stoking the retail fire. Unemployment fell for the 10th straight month in June, to 9.6 percent after peaking at 11.3 percent a year ago. A recent survey found more than 60 percent of the French to be optimistic about the future.
Tourism is also soaring. This year, more than 73 million people are expected to visit Paris and France, making the country the world’s most popular tourist destination.
And when tourists come to this town, especially, it is not only for the sights. “Paris is the shopping destination of choice for Asians,” said Bongibault. “They come to do shopping in Paris because it’s the style capital of the world.”
“When you have a shop in Paris, you don’t only cater to Europeans, but also to the Far East,” said Adjadj. “Asians come to Paris with one thing in mind: shopping. They don’t go to London to do that.”
Also pulling local retailing up by the bootstraps is the influence of LVMH Moet Hennessy Louis Vuitton chief, Bernard Arnault, and his business rival, Francois Pinault, who controls conglomerate Pinault-Prin-temps-Redoute.
“By proving luxury is profitable, Arnault and Pinault have reassured investors in the business capacity of Paris,” said Adjadj. “They’ve also made long-term commitments to develop the sector. It has given both French retail and fashion a shot in the arm.”