Category Archives: Department Store
American Dream, the 3 million-sq.-ft. entertainment and shopping complex in East Rutherford, N.J., has announced it will open its doors to the public on Oct. 25, 2019.
According to wwd.com, entertainment attractions include Nickelodeon Universe Theme Park and DreamWorks Water Park; Big Snow Ski and Snowboard Park, the first indoor snow sports center in North America; The Ice Rink, an NHL-size skating and hockey facility; and 18-hole Angry Birds Miniature Golf.
On the retail side, the $5 billion project touted The Collections at American Dream is described as “the ultimate luxury experience” and is anchored by Saks Fifth Avenue and Barneys New York with a Freds restaurant, two-level Hermès store, Tiffany & Co., Dolce & Gabbana, Moncler and Watches of Switzerland.
Harrods has proven that deep-rooted tradition and continued innovation are key to win the retail race, with the famous 170-year old landmark beating others as the world’s best-performing luxury department store.
The historic building on Brompton Road in London’s Knightsbridge made sales of £2.1 billion in the year ended February 2018, up by 6.8% on the prior year.
Selfridges and Liberty were also named in the top five, with the renowned British luxury department stores getting a boost from high-spending tourists looking to pick up shopping bargains as a result of the weaker pound.
With Neiman Marcus and Nordstrom scheduled to open their first-ever doors in Manhattan this year, the competition among department stores in the crowded landscape remains more fierce than ever. This is why Saks Fifth Avenue’s ongoing $250 million renovation project at its flagship location is crucial for getting customers excited about shopping in-store.
As part of the remodeling, the entire ground floor is now a sprawling handbag emporium featuring 50 brands that run the gamut from a $45 Saks tote to an exotic $49,500 alligator top handle bag from The Row. The 53,000-square-foot ground floor was previously the beauty department and fine jewelry (which has been moved up to the second floor). READ MORE
Minneapolis-based Target Corp. has announced new locations for its small-format stores throughout Chicago and New York.
The new stores are set for Wicker Park, Chicago (opening summer 2018); Upper East Side, New York (70th Street and Third Avenue, opening 2019); Staten Island, New York (Forest Avenue Plaza, opening 2019); and Astoria, Queens (Ditmars Boulevard and 23rd Avenue, opening 2022).
The company plans to have 130 small-format stores nationwide by the end of 2019.
Nordstrom’s new men’s store raises the retail bar with a modern blend of merchandise, technology, and cutting-edge service.
On April 9, 2018, members of the press got a private tour of its newest New York City retail endeavor, a 47,000 square-foot, three-level men’s store on 57th Street and Broadway that opens to the public on April 12. This is the first full-price department store Nordstrom’s has opened in the five boroughs and the company’s only stand-alone men’s store anywhere. READ MORE
The news and market reports make clear e-commerce is creating a challenging brick-and-mortar retail market. Major names like Abercrombie & Fitch and J. Crew are rethinking retail space as trends push towards an expanded online inventory and smaller physical spaces. Brands know this and are leveraging this knowledge when negotiating mall leases.
Shorter lease terms
Right now a start-up’s life cycle is around 7-10 years. With a volatile market and the growth of e-commerce into sales, retail tenants are leery to sign a 10-year lease. Dozens of established brands have filed for bankruptcy or announced plans to reduce physical locations as a method of reducing costs.
In this volatile market, mall tenants are negotiating leases as short as 1-to-2 years. That’s a significant change from durations in the 5-to-10 year range.
“You’re certainly seeing the renewals geared toward the shorter term, rather than the five-year renewal,” Andrew Graiser, head of A&G Realty Partners, told Bloomberg. The disruption in the brick-and-mortar space presents challenges to determining the right number of stores. Consequently, retailers want the flexibility to change direction with market conditions.
In addition to reducing the number of locations, retailers are trending towards smaller stores. Brands are turning away from expansive square footage to a more intimate setting that allows them to build more personalized customer experiences. When Macy’s shuttered its doors in the Irvine Spectrum Center, the mall converted the space into 20 units for smaller merchants.
“Landlords are going to have to be more flexible, not just about the price, but about how space is used,” said Richard Kestenbaum, a partner at Triangle Capital, LLC, writes in Forbes.
While class-A spaces tend to do well, older shopping centers may not be built to this shift in retail needs. Mall owners or operators are turning towards renovations, both as a way to lure customers and retailers. JLL reported over 90 malls spent $8 billion to upgrade their spaces.
Most markets report there is more retail footage than demands needs. In this case, the mall owners must lure retailers with competitive lease rates.
In a landscape where more retailers are shuttering doors, mall tenants believe they have the advantage. After all, an empty space generates no revenue for the owner. Tenants are negotiating for lower rent, especially in markets or C-class malls where keeping tenants in a space is more challenging.
“We can’t remember a time over the past 10 years when the companies we cover were so consistently citing lower rents,” Jay Sole, Morgan Stanley analyst, told The Street.
Mall owners and operators are staying flexible and creative to attract the right tenants. By renovating spaces to attract brands looking for smaller spaces, to re-negotiating lease terms, and accepting shorter leases, operators continue to keep spaces occupied and attracting customers.
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It sounds like an oxymoron: Nordstrom, a high-end clothing retailer, opening a store without browsable product racks. But it’s true. The Nordstrom Local concept store launching this month in West Hollywood, California, will have zero stock.
Initially, customers walking in may be perplexed to not see clothing racks, but Nordstrom is banking on an experience that aligns with how today’s consumers shop. While consumers want options, they’re less interested in browsing vast amounts of inventory for just a few pieces. A typical Nordstrom store spans 140,000 sqft. The service-focused Nordstrom Local will occupy just 3,000 sq ft. with one styling suite and eight dressing rooms.
“As the retail landscape continues to transform at an unprecedented pace, the one thing we know that remains constant is that customers continue to value great service, speed and convenience,” said Shea Jensen, Nordstrom senior vice president of customer experience who led the Nordstrom Local initiative.
How exactly will Nordstrom Local work? Customers will make appointments online, over the phone, or in-person, for a free, no-pressure consultation with a personal stylist. The stylist will guide customers on their purchasing decisions, whether a whole new wardrobe or a gift for someone special. Stylists will select merchandise for the customer to try on in one of the eight available fitting rooms. While chatting fashion, the customer can enjoy a locally sourced cold-pressed juice, beer, or wine, or an espresso from the Nordstrom Ebar.
Additional services available from Nordstrom Local include manicures, on-site tailoring and alterations, and curbside merchandise pickup. Nordstrom Local includes same-day buy online, pickup in-store and offer same-day delivery. Trunk Club and Trunk Club Custom customers can meet at Nordstrom Local to see a Trunk Club stylists or return a trunk.
Nordstrom, Inc. operates 122 full-line stores in the United States and Canada, plus 224 Nordstrom Racks and seven Trunk Club clubhouses.
Nordstrom has opened its sixth location in Canada.The department store retailer on Friday opened its doors at CF Sherway Gardens, its third full-line location in Toronto. The two-level, 140,000-sq.-ft. store follows the retailer’s openings at Toronto’s CF Toronto Eaton Centre and Yorkdale Shopping Centre last fall. READ MORE