There’s no denying New York City’s place in the pantheon of great cities for retail. It is the largest retail city in the United States, and one of the most well known retail cities in the World. In 2009, Forbes Magazine established that over 45% of the World’s top retail brands had a presence in the five boroughs, and that number has only increased as the New York real estate market has continued to grow.

Also, New York ranks among the World’s greatest hubs for high fashion. Every year, the best designers descend upon Manhattan for the biggest shows in the fashion industry, and often the styles shown during fashion week can impact fashion trends for years to come.

It’s no wonder so many brand managers are looking to get their retail stores into the New York market. If your product, store or brand is successful in New York, it will be successful anywhere.

But while the New York market provides an unbelievable opportunity for retail, it has its own challenges. I recently spoke with Angelo Michilli of Michilli, Inc., a 30-year veteran of the retail construction and consulting industry in New York City. He has some critical suggestions for any brand manager looking to enter the greatest retail market in America.

 

Are you starting a retail project in New York? Download our shortlist of Preferred Vendors today. 

Hire a Professional Negotiator

Before you can begin any retail project, you must find your location. It is no secret the New York real estate market is one of the most competitive in America. In most markets, business owners or brand manager may be able to complete the negotiations with landlords with a deal that is beneficial for both sides. In New York, it is a different story.

“The New York City landlords are very good at what they do,” Michilli says. “They have been landlords forever, and most of them are very savvy. If you’re not careful with what you buy into, you sign a 10-year lease with someone, and you’re potentially getting yourself into a situation where you’re responsible for more things than you should be. This can all contribute to your bottom line.”

The solution? Michilli suggests the first call you should make before getting into the market is to a commercial real estate agent or attorney with experience in lease negotiation.

“It’s important to have someone in your corner who does this sort of thing for a living,” Michilli says.

Having a professional negotiator can help you avoid many of the pitfalls that can doom your business or your retail location in New York. They can help get you more favorable terms and keep your location overhead as low as possible. The rent in New York City is high enough, so a deft negotiator can end up saving you thousands per month.

Have a Distribution Plan

While most retailers will have a distribution plan in place for their products before beginning a project, it is especially critical to have an understanding of how you will get your product into your store in New York. Bringing product into a city of this size presents challenges that some brand managers may not anticipate.

Generally speaking, it’s going to take longer and be more expensive to bring your products into New York than other markets.

“Getting your product into New York, you’ll want to keep your expenses as low as possible so you can,” Michilli explains. “You want to affiliate yourself with someone who runs a distribution company or transportation company that is savvy.”

Of course, you also want to have a plan in place for more than just the initial shipment of product. Because the shipment cycle can be longer in New York, you don’t want to be caught behind when it comes to getting your store restocked.

Always be Compliant

This is not unique to New York City, but you must always be aware of local compliances, codes and other laws. In New York, in particular, the local law enforcement agencies are particularly stringent on codes such as handicap compliance.

In this case, Michilli suggests working with an experienced, local architect when planning your space.

“It’s a good idea to get a local architect or a local owner’s representative that has a lot of experience in retail to guide you and be a consultant as you’re looking at spaces,” Michilli says. He adds that some spaces may already be compliant, but those that aren’t can have a big impact on the cost of the project.

A local architect can also help you navigate the numerous historic and protected neighborhoods and buildings of New York City. Each neighborhood may have its own code for what’s acceptable and what isn’t, and some of the up-and-coming areas of the city would fall into this category.

Are you starting a retail project in New York? Download our shortlist of Preferred Vendors today. 

Project Timelines are Longer

Projects in New York simply take longer than in most markets, and you must be willing to plan ahead for this extra time commitment.

“Too many business owners underestimate the time it takes to select the space, negotiate the lease, design the space, submit the plan for permitting, wait for the permit to be issued, start construction and then open,” Michilli says. “Their forecasting for when they open their store is usually off.”

In particular, the permitting process in New York City can add significant time to your project.

“It takes about 2-3 months to get a permit,” Michilli explains, “so it isn’t as expedited as you might think. Sometimes it may depend upon the location as well. Downtown is more historic and may take more time than uptown.”

Again, constructing in a historic district may prove lucrative for your brand, but it can cost you extra time and money along the way.

“When you’re in a landmark district, you’re governed by the New York City Landmark Preservation Committee. You have to ask, or request, [the Landmark Preservation Committee] and they must approve it. It’s just an additional step you must take in the process, which can add anywhere from one month to four months to your project depending on the level of modification.”

Plan for Expenses

A lot of the biggest problems faced by project and brand managers new to the New York market have to do with expenses. Everything from distribution to permits and construction will cost more, and improper expense planning can lead to some serious problems.

“New York City is usually about 20-30 percent more expensive than any other city in the country, so people usually don’t budget properly,” Michilli says. “Unfortunately, it is almost like a movie, and it repeats itself every time. People are unhappy that they have to spend money, or they have to open later.”

“The good thing is that it is New York City, and it usually pays to wait and has a greater return because of the volume of people and traffic.” 

Is Your Brand Ready for New York?

Are you ready to take the next step and move your brand to New York City? It is critical you begin by working with someone who knows the market. You can use 4URSPACE to connect with vendors of all types, to get your project started as smoothly as possible.

Sign up for an account today and begin browsing vendors and projects today. 4URSPACE is everything you need to contact trusted vendors and vet them based on their previous and current work. You can even receive alerts on projects by brand, location, mall or department store. Get started today!

Learn more about Michilli, Inc. by viewing their 4URSPACE profile here, and visiting their website.

 

 

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