Over the summer, a pair of Nike trainers broke a Guinness World Record for the most expensive sneaker transaction in history. The 1975 “Moon Shoes” sold for $437,500 at Sotheby’s, which is, well, a rather luxurious purchase.
Streetwear’s proliferation across North American high streets has been pronounced, with many brands enjoying almost cult-like followings. This trend is unsurprisingly being driven by younger consumers. That’s good news as, according to a Bain & Company study, Generations Y and Z will represent 55% of the luxury market by 2025.
So, it’s not surprising that traditional luxury brands are investing in this new style (pun intended) of luxury brands. Supreme, an iconic streetwear brand that started as a skate shop in New York in the ’90s got a multi-million dollar boost in investments and collaborations from LVMH—bringing Supreme’s valuation to over $1 billion. Golden Goose, an Italian luxury sneaker brand, is apparently drawing interest from mega footwear conglomerate VF Corporation.
Today In: Business
While Supreme could easily afford the rents that Maison Goyard or Alexander McQueen pay along Geary Street or Maiden Lane in San Francisco, the brand opted to put their latest store in San Francisco at the base of the Union Square corridor on Market and Sixth, a fringe location that more aligns with its image.
The rise of streetwear as the new luxury retail tenant is just one of the major themes that is defining urban retail and the prime corridors that these brands inhabit. Prime urban corridors are nationally recognized shopping districts, distinguished by their mix of local, national, and international tenants. These corridors come about organically and are not planned by a single master developer.
Move over Meatpacking, Wicker Park is the new kid on the block
According to JLL Research, the most visited corridors are:
But the top corridor, and city, changes for the Millennial demographic with Chicago’s Wicker Park area taking the top spot.
Part Museum, Part Retailer, All Awesome
Another major theme taking hold in prime urban corridors is the rise of experience museums, which focus on creating a series of social media moments. While “experience” is fast approaching “omnichannel” as the most overused word in retail, these museums are capitalizing on consumers desire to not just spend their money on things other than goods—but to share it digitally.
For example, the Color Factory in New York’s SoHo corridor has likely invaded your Instagram feed at some point, thanks to their colorful ball pits and other art installations. While $40 a ticket might seem steep, can you really put a price on Instagram cred?
Clicks-to-Bricks Brands Continue Store Expansion
Once online-only brands are continuing their foray into physical space, often using prime urban corridors as entry or expansion points, highlighting the importance of these destinations for brand building purposes.
- Boston’s Seaport continues to attract popular brands like Away and Bonobos. The corridor also recently welcomed For Now, a marketplace concept with spaces for emerging brands.
- Everlane opened its first Los Angeles store on Abbott and Kinney, joining a handful of other digital natives.
- In Toronto, Peloton has taken space on Bloor Street and Casper opened on Queen Street West.
- The RealReal, an authenticated luxury consignment marketplace, opened its second New York store on Madison Avenue and 71st, an affluent neighborhood that can take advantage of the “swap-shops” high-end items.
Investment Volumes on the Rise
As a result of all this activity, prime urban corridor investment volumes skyrocketed, increasing by 41.6% to $827.3 million. Prime urban assets have remained one of the most sought-after retail products as their high-profile locations bring significant foot-traffic and therefore strong tenant-demand.
This year, San Francisco’s Union Square corridor has been the top-performing high street from a capital markets perspective after seeing no investment activity in 2018. Apple’s 24,000-square-foot flagship was sold to Spanish investor Ponte Gadea for $120 million. At $5,039 per square foot, the sale significantly surpassed the previous high-water mark for the corridor of $4,314 set in 2013.
Retail has been undergoing a significant change and urban corridors are no different, but new fashion trends and unique tenants are transforming these areas in cities across North America. Whether its high street, main street or at the mall, retail continues to evolve in incredible ways.
No comments:
Post a Comment