HERMES PLANNING TO OPEN MADISON AVE. STORE BY 2000
Byline: Lisa Lockwood
NEW YORK — Hermes is headed for Madison Avenue.
The French luxury firm has leased a prime retail site at 691 Madison Avenue here on the northeast corner of Madison Avenue and 62nd Street.
The space is currently occupied by The Limited’s New York flagship, but has been shopped by its landlord for some time. With little space available and prices skyrocketing on Madison, the space has attracted keen interest from Tommy Hilfiger, Donna Karan and David Tang, who ultimately opened a Shanghai Tang store a block south.
Hermes signed the lease late last week and plans to open a new 20,000-square-foot flagship store in the year 2000. Plans for its existing 5,000-square-foot store at 11 East 57th Street here “have not yet been finalized,” said an Hermes spokeswoman.
While Hermes declined to reveal the rent for the four-story historical landmark building on Madison Avenue, retail sources estimated the rent at $3.5 million a year, in addition to taxes of $315,000. Rodney Propp, the landlord of the building, couldn’t be reached for comment.
The site has a central atrium and roof terrace. According to Hermes, the company expects to renovate the interior, but keep the exterior intact. The store will house several sales areas, as well as an Hermes Gallery.
“The layout hasn’t been determined yet,” said the spokeswoman, noting that the firm will divulge further developments for the site in September.
“It would be a wonderful flagship for anyone,” said Faith Consolo, executive managing director at Garrick-Aug, a store leasing company here. “It’s the closest thing to a European mansion, outside of the Rhinelander. It has an imposing presence.”
Consolo noted that the landlord would jump at the chance to have a tenant like Hermes. “They have all the elements that are right. The landlord can go to sleep for the next 20 years and just collect rent. It’s not for a retailer that depends on one economy to do well,” she said.
Because of its excellent financial health and 160-year history, sources acknowledged Hermes’s bid was highly attractive to the landlord.
As reported, Hermes’s 1997 sales increased to $791.7 million from $730 million. Net profits rose to $86 million from $79.8 million. Total company sales have quadrupled in the past 10 years while profits have increased six-fold. Hermes has 232 units worldwide, including 82 concessions, 87 wholly owned and operated Hermes stores and 63 department or specialty stores where it wholesales its watches, perfume and tabletop goods.
Europe accounts for half its business; Japan, 24 percent; the U.S., 15 percent, and Asia Pacific, 12 percent.
Ironically, the new Hermes boutique will be diagonally across the street from Barneys New York, which is the only retailer in New York besides Hermes to offer the firm’s complete line of women’s ready-to-wear.
Earlier this month, Barneys hosted a brunch and trunk show for about 30 of its best customers to preview the fall Hermes collection. The line was featured in the windows and highlighted designer Martin Margiela’s debut at Hermes. Margiela designs the house’s women’s wear, while Veronique Nichanian designs its men’s wear.
When asked whether the new Hermes flagship would have any impact on Barneys, the Hermes spokesman said, “We love Barneys…nothing’s been determined yet.” Barneys officials could not be reached.
There are currently 13 Hermes stores in the U.S., with openings planned in Las Vegas in October and Atlanta in November.
In September, Hermes opened a four-story 17,000-square-foot store on Rodeo Drive in Beverly Hills, including 2,000 square feet devoted to women’s wear.