Here is an interesting read from today’s WWD (in it’s entirety) about the current retail real estate landscape in Chicago by Beth Wilson. Mind you, we feel she tends to paint a rosier picture than reality shows (highest sales tax in the country and boutique closings in record numbers), but it’s a good read nonetheless.
In Retail and Real Estate, City Grabs the Spotlight
Published: Thursday, March 27, 2008
Melissa Gamble, Chicago’s director of fashion arts and events, admits
some people raised an eyebrow or worse when she assumed the new
salaried city post in 2006.
smirked when I told them my title," said Gamble, a former lawyer and
fashion/marketing graduate. "They would question Chicago and fashion,
and say that those two don’t go together."
Today, Gamble said
she is received differently. "Now they say, ‘I’ve heard of that. I’ve
been to a boutique in Chicago. I’ve heard of a designer from Chicago.’
People are becoming more aware of the city overall."
general, seems to be grabbing more of the spotlight with restaurants
and chefs winning national acclaim, Chicagoan Sen. Barack Obama
fighting for the Democratic nomination for president and the city
campaigning for the 2016 Summer Olympics.
Meanwhile, Gamble and
a 20-member fashion council appointed in 2006 by Mayor Richard M. Daley
continue to grow Chicago’s annual fashion week, expand the scope of its
fashion Web site, chicagofashionresource.com, and provide young
designers with access to buyers and workspace in the form of a fashion
incubator at Macy’s on State Street.
And as Chicago enjoys its
moment in the spotlight, retail activity remains surprisingly strong,
given the economy and a recently approved sales tax hike.
is talking about a recession, but it has not affected luxury retailers
from wanting to position themselves in Chicago," said Jeffrey Shapack,
president of M Development in Chicago, which is developing and leasing
real estate in some of the city’s hottest retail areas including the
Gold Coast’s Oak Street, Bucktown’s Damen Avenue and Lincoln Park’s
Along Oak Street, a side street to Michigan
Avenue housing brands such as Hermès, Harry Winston and Yves Saint
Laurent, retailers wait years for the right location. Now, new
projects, such as the redevelopment of the Esquire Theater and Barneys
New York doubling its square footage in a new flagship, are creating
numerous retail opportunities the likes of which haven’t been seen on
the street in over a decade.
"It’s like the gold rush," said
Shapack, who corresponds monthly with 30 to 40 luxury retailers seeking
initial or additional retail space in Chicago. "If they [retailers]
don’t position themselves now it may be years before space becomes
"They’re recognizing how much wealth is in Chicago and how much
wholesale business they already do here," he added. "Chicago provides
them opportunity for growth."
Adney, who represented Marc Jacobs in opening a boutique this year on
Damen Avenue, confirms the increased interest in Chicago.
a huge amount of activity in Chicago," said Adney, vice president of
the McDevitt Co. "There is a huge amount of retailers looking in the
city, looking in every neighborhood, and they’re looking at the highest
rents we’ve seen in a long time."
Although many design houses
used to scoff at leasing space beyond the Magnificent Mile, Oak Street
or maybe Lincoln Park’s Armitage Avenue, the city’s retail landscape
has changed. More national and international retailers are selecting
seemingly off-the-beaten-path locations in increasingly affluent
neighborhoods that in recent years have enjoyed a surge in restaurants
and residential and retail development.
Designers, meanwhile, also recognize Chicago as an important stop for personal appearances and fashion shows.
is a fashion town and it shows," said Zac Posen, who noted his sales in
Chicago are among the strongest in the country, second only to New
York. Posen, who plans a trip to the Windy City April 9 and 10 for a
fashion show, party and Saks Fifth Avenue trunk show, said his Chicago
customers possess a sophisticated eye and confidence illustrated in
both their appearance and homes. "Her shoe collection rivals her art
collection," Posen joked about his Windy City clients.
SALES TAX HIKE, STORE CLOSINGS
But not all signs are rosy for retail or fashion.
July, Chicago’s sales tax will rise to 10.25 percent, from 9 percent,
making it one of the highest in the country. David Vite, president of
the Illinois Retail Merchants Association, said the measure will
undoubtedly hurt the local retail community.
"This new sales tax
increase will have an impact," he said. "I have a great fear that we
will have hit the tipping point and that customers will make their
decisions based on tax."
Vite said consumers may choose to shop at stores outside Chicago and encompassing Cook County or just buy online.
Even Adney admits she may rethink paying a 10 percent-plus tax on a pricy designer bag.
takes issue with the Cook County Board’s timing. To approve a sales tax
hike at a time when the federal government is talking about economic
stimulus measures is ridiculous, he said.
At the same time, some local retailers are already feeling the pinch due to Chicago’s wicked winter and changes in the economy.
the city’s trendy Bucktown neighborhood, three women’s specialty
stores, Jade, Raizy and Language, announced store closings. Along Wells
Street, where Nicole Miller relocated her Chicago store in 2007,
Josephine, an upscale footwear destination, plans to close in April.
And along Armitage Avenue, Active Endeavors shut down its bilevel store
just doors down from Intermix, which opened last year.
Overall, Chicago has fared better than some other areas in the residential real estate slowdown and related retail fallout.
still a considerable amount of retail growth in the city that’s not
happening in other parts of the country," Gamble said. "We’re doing
pretty well and I think we’ll weather it [the economic downturn] well."
Adney agreed. "Chicago hasn’t been hit as hard as other parts
of the country with the housing crisis," she said. "Texas, Florida and
California are really getting nailed. People in Chicago