Coast to coast luxe — From New York to L.A. and in between, luxury retailers are getting their houses in order.
Luxury is anything but languid these days. On a recent trip to New York, I toured several of the luxury boutiques along Fifth Avenue. The eye-popping storefronts set the tone for the goods found inside. Making my way up to 57th Street and turning east, it was hard not to notice the care and attention companies like Tiffany & Co. and Bergdorf Goodman have lavished on their “sets.”
Back south on Madison Avenue brought more of the same. But, you say, this is nothing new for New York. This is rarified air, to be sure, and after all, Manhattan is an island, right?
But now walk along Michigan Avenue in Chicago. Then browse through The Galleria Malls in North Dallas and Houston. What you find are luxury retailers doing business in virtually every major city. No dark storefronts, no half-price sales here.
Even in the nation's heartland, luxury lives. Specifically here I'm talking Oklahoma City, my hometown. At Penn Square Mall, owned by Simon Property Group, I asked the manager of the Mont Blanc store how was business. With a gleam in her eye, she said, “Since they redid the Dillard's next door, traffic has been great. That space was in flux for a long time, and it really makes a big difference who you're next to.”
David Weinert, group vice president of leasing for Taubman Centers, says luxury retailers will continue to locate their stores outside New York and Los Angeles, for the wider exposure to more warm, rich bodies, whether they're in New York or Oklahoma City.
“They are looking for the right demographics, pyschographics, location, upscale anchors and a developer they know can deliver this product successfully,” says Weinert.
At least two major new developments — the expansion of The Forum Shops in Las Vegas and the spanking-new Mall at Millenia in Orlando — are delivering new space specifically targeting the highest of the high-end vendors. Why? Admittedly, these are two of America's biggest tourist destinations — for domestics and internationals alike — so they're perhaps “outside” the mainstream of American retailing. But still, they stand out in an environment that isn't seeing a lot of new mall development these days.
To be sure, luxury retailers have not been expanding as rapidly as they were in, say, 1999 and 2000. The two biggest conglomerates — LVMH Moët Hennessy Louis Vuitton and Richemont — have been trying to herd the luxury cats they've been snapping up the past few years, slowly but surely refining their cost structures.
Department stores, too, the traditional mall anchors, have been floundering of late, still trying to find their exact relevance in a changing and often more discount-oriented world.
One could argue that as go the anchors so go the luxury-goods purveyors, since each feeds off the other. Now that's an interesting dilemma, and one we'll be exploring further in our August issue, so please stay tuned.