In this economy there is no retailer that has proven to be immune to the recession, but there are some doing better than others. Being a lover of fashion – I couldn't help but wonder how these high end retailers were making their $1,200/SFPY rent? As it turns out – they aren't! Most of these companies are failing and fast BUT what was interesting is that among the mess, the mid range level designers are excelling!
It was reported in the International Herald Tribune that; The Hilfiger line, like many midrange designer brands, is growing, while other labels, notably at the high end, are struggling to hang on to market share.
Tommy Hilfiger just openned a 22,000 SF store on 5th Avenue in Manhattan! (that is the $1,200/ SF rent!) Some might call that insane – I say it is interesting. I would bet that any 5th Avenue landlord would give their right arm for a tenant like Apax Partners. The group has a proven track record of success as a lessee.
(Sales of the Tommy Hilfiger Group, a unit of Apax Partners, a private equity investment group, rose 21 percent, to $1.6 billion, for the financial year that ended March 31, according to Fred Ghering, Hilfiger’s chief executive officer. Hilfiger sales for this financial year are expected to rise in the single digits, much less than in previous years, but they will still grow in a stagnant market. For the record, a Hilfiger cocktail dress sells for $450 and a camel hair coat goes for about $750.)
Tommy Hilfiger is just example of this growing mid-range group. Brands like Tommy Hilfiger, D&G from Dolce & Gabbana, or Tory Burch, all selling below the luxury designer category, are growing now because they expanded or reorganized, repositioned collections or introduced new lucrative lines before the first signs of the recession.
I pays to know your economy and the consumer! For the full article click here!
