Retailers rush in time for Christmas

Real Estate Weekly, Dec 8, 2004 by Elaine Misonzhnik

With some help from the weak dollar and three newly constructed shopping centers, New York welcomed a number of first-time retailers to the market this year. But while the wish to make it in New York has encompassed a variety of stores--including apparel, home furnishings and high-class restaurants--it has been particularly noticeable among European operators.

"The dollar is weak and the euro is strong--a lot of international companies came to New York this year because it was finally feasible for them to build a store," said Faith Hope Consolo, vice chairman of Garrick-Aug Worldwide. "You have a dozen jewelers on Madison Avenue alone, all of them French and Italian." Among other newcomers, Consolo mentions the Turkish Gilan Jewelry at 743 Fifth Ave., Japanese massage chair retailer, Family Inada, at 56th Street, Molton Brown, a cosmetics and skin care products store from Great Britain, on Third Avenue, and the French apparel and accessories store, Lacoste, on Prince Street.

According to Cushman & Wakefield specialist, Gene Spiegelman, it's no accident that these retail chains have chosen this particular year to come to New York, or in some cases, launch their first U.S. divisions.

"All of this is very well planned; there is nothing happenstance about it," he said. "These retailers had painstaking costly analysis' done on where they should be located and how to merchandize the store correctly. I think that generally you have healthy economic trends with regard to retail spaces, both nationally and regionally, and that just continues to give an incentive for retailers to expand."

Spiegelman also mentioned the opening of several big retail developments in Manhattan this year, which might have helped draw stores that couldn't find the right location in the city.

"The Vornado project at Union Square, the Time Warner Center and the Bloomberg Building all helped this trend," Spiegelman said.

"The opening of the Vornado project , along with Time Warner Center, I think are big stories," agreed Richard Hodos, president of Madison HGCD. "Forever 21 was a new retailer that entered the market for the Union Square project, there are some new stores at Time Warner like [costume jeweler] Clio Blue, [men's apparel seller] Joseph Abboud and the [sportswear store] Princeton Running Company. There is also an assortment of new restaurants that are key to making that project a success."

For his own part, Hodos handled the U.S. launch of the apparel and accessories brand, Esprit. The store, originally U.S.-based, had experienced some problems in the 1990's and was eventually bought by European and Asian companies. Now headquartered in Germany, Esprit wants to try its lack again and has just leased its second New York store at the former Museum of Contemporary Art space in Soho.

"We opened the first flagship at 110 Fifth Ave. and we just finished a second and third deal--a Soho store at 583 Broadway and another one at Time Warner Center," Hodos said. "I believe they have never had a store in New York. They thought of maybe going to San Francisco to start, but New York was closer to Germany and it was a more logical choice management-wise."

Madison HGCD is also looking for new locations for such stores as Borders Books and Music and California Pizza Kitchens, but Hodos believes the real story in the next few years will be the emergence of retail downtown.

He said. "A lot of people want to see the World Trade Center rebuilt just as it was in terms of retail because it was so successful. They will not get it, but they will get some version of it that will make enough sense to be located there."