On Monday, Tommy Hilfiger vacated its Fifth Avenue flagship. Two weeks ago, Hudson Yards heralded its opening with a big, splashy party for 17,000 Very Important People. Those two events send quite different messages about the future of physical retail in Manhattan.
The Hilfiger closing was but the latest of several high-profile exits from Fifth Avenue, once one of the world’s most-revered shopping streets and still among its most famous and expensive in terms of rents. The vacancy joined those left by Polo Ralph Lauren, Henri Bendel and Lord & Taylor, with an incoming resident secured only for that last space, Hudson’s Bay having sold the former Lord & Taylor flagship building to WeWork as part of its exit plan.
While the impact of technology and e-commerce on physical retail is enormous, the aura of Fifth Avenue started changing long ago, its transition from tony shopping enclave to an egalitarian mix of high and mass driven by the street’s status as a major tourist destination. The store closures feel like more than a natural evolution of that change, particularly so Hilfiger’s, a brand not tied to the luxury sector. Taken in concert, they seem to forebode a Fifth Avenue future dramatically disconnected from its storied retail-centric past.
Given the realities — physical retail already sorely challenged; technology continuing to advance at unimaginable speed; major competition from brand new (Hudson Yards) and newish (Brookfield Place) shopping centers — it’s hard to imagine the Fifth Avenue of the future, say 10 years out or even five, let alone 50.
Traditionally, cities have been essential epicenters where people come together for all sorts of social reasons, with engaging in commerce at or near the top of the list. Random strolls on Fifth Avenue indicate that people are still interested — it’s typically packed, unlike still-tony Madison Avenue. Said strolls also indicate that most of that population isn’t schlepping luxury-brand shopping bags. It’s not hard to wonder if more vacancies are coming, and in their places, either emptiness or a thoroughfare of souvenir shops and cheap eateries.
Sounds depressing, no?
No, indeed, according to Uwe Brandes, whose CV radiates knows-what-he’s-talking-about. Brandes is faculty director of the master’s program in Urban and Regional Planning at Georgetown’s School of Continuing Studies and co-curator of knowledge management for the Cities & Urbanization initiative at the World Economic Forum. He’s also a former senior vice president at the Urban Land Institute (ULI), where he was author and executive editor of projects including “The City in 2050,” “What’s Next? Real Estate in the New Economy” and “Getting Ahead of Change.”
“The role of space in the city is really being revolutionized,” Brandes said in a phone conversation this week.
Specifically regarding Fifth Avenue, he noted two key forces in play. “One is, stating the obvious, this very rapidly changing relationship between our digital lives and our physical lives in cities,” Brandes said. “That is changing so rapidly from year to year, it’s hard to predict exactly where that’s going. Second is the huge market shifts occurring within Manhattan itself, with Hudson Yards and with Downtown. The prime retail locations are being redefined in incredible ways that you couldn’t have even imagined a few years ago.“
Yet retail as we know it now is only one part of the larger, ever-changing story of urban development. “One thing that is really important from a big-picture, city perspective is that we’re social beings. We love to get together in cities,” Brandes said. While that is unlikely to change, the circumstances surrounding that communization are always evolving. Just as retailers and brands talk endlessly about delivering experience, that concept is essential as well to the larger urban future.
“We love to come together and see each other, experience new things,” Brandes said. “The key issue here is really about experience. Is there a value proposition being created that allows people to ‘experience,’ whether that’s the brand in the commercial sense, or the city and community and society in an urban sense? If that experience is not there, people are just not going to go.”
Certain anchors draw people to urban centers, and those centers rely on those anchors to do so again and again. Yet the anchors themselves aren’t static, particularly today, when the culture moves so fast. “Traditionally, we have thought of those anchors as being big stores. That’s in a traditional urban context, but then also in a mall context,” Brandes said. “And more and more now, since people are really looking for experiences and not necessarily products, it’s the experience that becomes the anchor. That could be a coffee shop, it could be a restaurant. The definition of what an anchor is for a commercial area is changing very radically.”
It will take a lot of brunch joints and Starbucks to fill vacated major retail space, and Brandes acknowledged that the answers are not all readily available. Still, he voiced great confidence in the abilities of major cities to find their way, noting the importance of “retrofitting” parts of urban centers when the original use has become outmoded. He cited as examples Manhattan’s countless one-time commercial-use buildings, including manufacturing sites, that have been repurposed as offices, galleries and residential lofts.
But a structure built to house a printing operation or apparel factory wasn’t designed with street-level interaction with the populace, nor as a meeting place for friends. People went to work at printers and factories; they didn’t go to hang out. Much of the real estate along Fifth Avenue was built for large-scale retail, including that type of interaction.
The street presents a special case, one Brandes considers very important to the texture of the city. “Fifth Avenue is not a local market, it’s not a regional market, it’s a global market,” he said. “It’s so celebrated in the international imagination of what New York is.”
That said, in New York as elsewhere around the world, the urban experience has become less centralized and more niche. Brandes cited examples of which every New Yorker is well aware. “Downtown Manhattan has really turned into an urban-district experience where you can experience many, many different things without having to jump into a cab or ride the subway to go somewhere else. And that’s really powerful,” he noted. “As people look to spend their time in an interesting and quality way, they want choices. And the more choices that they have available to them, the more attractive a place is.”
So, has the “imaginative center” of New York’s global reputation shifted to Downtown? “You could make that argument, for sure,” Brandes said. “What is so interesting about this is that every person is different and looking for a different value proposition. So, what used to be the broadly accepted center of the universe, Fifth Avenue, that’s now splintered into many different kinds of urban experiences that people are looking for.”
As for Brooklyn, it has become a destination unto itself, for residents and visitors alike. “Things are just getting much more diversified and niche, and the more choices that people have available to them, the more attractive the destination is,” Brandes offered.
Asked if niche-ification makes global cities less powerful in the big picture, Brandes sounded a resounding no. “Take your pick, whether it’s New York, Paris, Tokyo, the global cities are in no way losing out to other cities. The question is, what kinds of experiences are people looking for once they are there? That, I think, is the major intrigue associated with this story.”
In terms of modernization, New York might be playing a little bit of catch-up versus global cities that have older histories but are younger in terms of modern development. He uses Hudson Yards as an example. “When you look globally at how cities are changing, there are environments that are being created that are really fresh and new in many other cities,” Brandes said. “And so one might argue that New York is playing catch up by creating spaces such as Hudson Yards, playing catch-up to many important cities in Asia. So this may be new for New York but this is a trend that’s happening around the world.”
Back to Fifth Avenue, Brandes foresees creative repurposing. “There is no doubt in my mind, there is tremendous architectural value in all of the existing buildings,” he said. “And certainly, I would expect a huge pushback from the historical preservation community if there was an any attempt to kind of reinvent Fifth Avenue in some dramatic way.”
But ultimately, the future of Fifth Avenue lies not in mere preservation but in smart repurposing of existing buildings that play into the street’s global image and brand value — a course very much in flux. “Building owners, business owners and consumers are clearly in a process of redefining what the appropriate use of these buildings should be in light of the disruption of the retail marketplace by online markets,” Brandes said.
Though uncertain of the specifics of “what’s next,” Brandes maintains that creative minds and entrepreneurial grit will ultimately prevail. “This is really about the economics of the space,” he said. Yet individuals can only do so much. Ultimately, Fifth Avenue “needs to be reimagined as a user experience which generates a unique value proposition.”
Brandes noted the transformation of Times Square as a parallel example, and said current urban planning practices, called “place management,” typically involve a multitiered approach including public- and private-sector cooperation.
Fifth Avenue will always be a major draw for travelers from around the world and increasingly, they will look for a broader range of experiences, Brandes said. “This bigger and broader vision of Fifth Avenue has to be fresh, inclusive and a grand celebration of fashion and commerce that has always defined the core identity of the street.”
A little off topic and bigger picture still, I asked Brandes if he were to plan a mid-21st-century city totally free of obligation to convention, what would it look like and on what philosophy would it be built. His primary themes: connectivity and user discretion. “There has to be a strong connection to mobility,” Brandes proposed. “Whether that’s regional mobility or through air and high-speed train to global destinations, it’s really about connectedness and creating the maximum amount of discretion in the user, in the person who is experiencing the city.”
It also must offer the promise of the new. “That’s why people get on a plane and go to New York,” Brandes said. “They want to experience something totally out of the box.”