| NYguy |
Dec 7, 2014 1:45 PM |
That 15 Penn conversation has been moved over here...
http://forum.skyscraperpage.com/show...162701&page=53
http://www.crainsnewyork.com/article...lics-roar-back
Retailing relics roar back
Department stores are thriving in a city where they were once written off, aided by a wave of tourists and a clutch of big new developments.
http://www.crainsnewyork.com/apps/pb...MaxW=640&q=100
BY ADRIANNE PASQUARELLI
DECEMBER 7, 2014
Quote:
First, Nordstrom announced it would open its inaugural New York City store on West 57th Street. Neiman Marcus followed, unveiling plans for its first New York store, a 250,000-square-foot flagship at Hudson Yards, west of Penn Station. Saks Fifth Avenue said it plans to open its second Manhattan outpost, at Brookfield Place downtown, and Nordstrom is already said to be shopping for a second store, in lower Manhattan.
Not since the days of Miracle on 34th Street, when the Macy's Santa famously directed shoppers to archrival Gimbels, has New York City been such a department-store town.
Fueled by more than 50 million tourists pouring into the city annually, record high employment and spending, along with a bumper crop of huge new real estate developments, department-store growth shows no signs of slowing. Their return comes at a time when the rise of omni-channel retailing—in which consumers can buy via the Web, shop at stores and browse by smartphone—has made a brick-and-mortar presence more vital than ever.
A decade ago, when Bloomingdale's opened a second location, in SoHo, many wondered if there were enough high-end shoppers to go around. These days, stores are doing everything they can to cash in on the growth. Barneys New York will open its second store next year, in Chelsea. Macy's and Bergdorf Goodman are lavishing millions of dollars on multiyear renovations designed to lure the coveted millennial shopper and stay ahead of the ever-expanding pack.
Few could have predicted such a turnaround. The department store, as a retail species, had its urban heyday in the early 20th century and spent much of the last half in a state of decline. Long gone are the once venerable Abraham & Straus, Gimbels, B. Altman & Co., Alexander's and Bonwit Teller. The big chains turned their backs on city flagships in favor of outposts at suburban shopping malls. Brands specializing in books, clothing and electronics expanded into stand-alone shops that cannibalized department stores' sales.
.....But in recent years, department stores have seen a Big Apple renaissance as growth in suburban malls has stalled. The stores have become more tech-savvy to reach a greater variety of shoppers. Macy's, which also owns Bloomingdale's, has reinvented itself by building a powerful e-commerce arm that few rivals can match, and by filling its stores with merchandise tailored to local markets. It's also spending $400 million on a renovation of its Herald Square flagship, to be completed next year.
Others are making digital inroads as well. Seattle-based Nordstrom, which reported $12.5 billion in revenue last year, expects e-commerce sales, as well as sales from its discount chain, Rack, to make up half of all sales in the next five years. Nordstrom's stock has soared more than 20% in the past 12 months.
Retail experts say its store on West 57th Street—285,000 square feet on seven floors that Nordstrom reportedly spent $103 million to buy—will advertise its namesake brand when the shop opens in 2018, leading to higher Web traffic in addition to brick-and-mortar buyers.
"Just that very presence will drive [purchases] on their website, because of the amount of eyeballs thinking of Nordstrom on a daily basis—the marketing in bus shelters or on taxis," said Mortimer Singer, chief executive of Marvin Traub Associates, a retail-focused consulting firm.
.....At the same time, a number of developers have made attracting high-profile department stores a priority at their multibillion-dollar projects, betting that the right store can set the tone for the lucrative retail portions of their properties. In Hudson Yards, the 1 million-square foot complex where Dallas-based Neiman Marcus will occupy floors five through seven when it opens in 2018, developer Related Cos. will reap higher rents by leasing upper floors to a retailer rather than an office tenant.
Because it will be the first and only Neiman Marcus in the city, the store is expected to become a shopping destination. According to a spokeswoman for Neiman, the chain, which also owns Bergdorf, wasn't looking to open a store in Manhattan until it was approached by Hudson Yards' developer with an offer too good to refuse.
The new developments at Hudson Yards and the tower that will rise on West 57th Street give Neiman and Nordstrom the relatively rare opportunity in older urban areas to design their own dream spaces.
Already, the prospect of Neiman at Hudson Yards is attracting shops to an area growing with residents. Brokers say other luxury brands—jewelry shops, apparel companies—are also interested in leasing space west of Seventh Avenue on 57th Street, a strip never before sought after.
"The department stores are taking root in New York City's fastest-growing residential neighborhoods," said Ed Hogan, national director of retail leasing at Brookfield Office Properties, which has signed on Saks to anchor its Brookfield Place mall across from the World Trade Center. He noted that there has long been a paucity of luxury department stores downtown.
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