FLAGSHIP FLASH: Diesel Flagship Trading Fifth Avenue For Home On Madison

As one big Fifth Avenue spot gets filled, another one looks like it will be opening up so. Diesel has reportedly signed a deal to take over 4,400 square feet of space including the Baccarat store at 625 Madison Avenue across from the rear side of the GM building. The new store's neighbors will include Fratelli Rosetti, Stuart Weitzman and Philipp Plein.
Presumably, that means that the Italian denim brand will be abandoning the Fifth Avenue flagship it opened only six years ago in the former longtime home of Gucci (pictured left). Since most retail leases these days start at about 10 years, we can only speculate as to why a, presumably healthy, major international brand like Diesel would abandon a lavish, high profile store right in the middle of Fifth Avenue's tourist-rich sweet spot before its lease is up? Have rents on Fifth inflated so much in the past couple of years that Diesel's landlord was willing to buy them out in order to make way for a new tenant willing to pay even more? At $1,400 a square foot, Diesel's rent on Madison for a 10 year lease is reportedly an 83% increase over what Baccarat paid.
We know, it's insane, but it still might be less than what Fifth Avenue demands.
The other question is why Diesel would move to Madison at all?
While Fifth has become a peculiar free-for-all mix between longtime pure luxury players like Bergdorf Goodman, Tiffany and Cartier, newer brand palaces like Prada, Dolce & Gabbana and Armani and mass market mega-flagships like Gap, H&M, Uniqlo and soon, Forever 21, Madison has remained an enclave of almost exclusively the highest-end boutiques and jewelers. Some luxury brands like Amani, Bottega Veneta, Valentino and Prada maintain a presence on both streets to show off for tourists on Fifth and serve more exclusive, crowd averse clients on Madison. Diesel, as upscale as it may be, doesn't really fit that mold. There must have been some reason why the jeans giant was compelled to leave what would seem to be the perfect spot for one that is good, but maybe not quite as good. Maybe 625 Madison offers a more favorable selling space, or perhaps it was just financially more viable? We may never know for sure, but we can count on the new store to be something of an update for the brand. We have no opening date yet, but expect it to reflect Diesel's retail evolution under its recently installed creative director, Nicola Formichetti. Stay tuned.

SL Green Secures Dramatic Rent Increase in Diesel Deal (Commercial Observer)

SPECULATION SURPRISE: H&M's Former Fifth Avenue Flagship Going To Forever 21 —Not Nike

For weeks now, many of us store watchers just assumed after months of rumors that the former home of H&M's first store in America  at 640 Fifth Avenue would become the new Niketown after that store's lease ran out on East 57th Street. It was just a matter of waiting for an announcement after H&M shuttered the store at the end of last year.
Well, surprise! Today it was revealed that the store will remain a fast-fashion destination as Forever 21 will, according to WWD, be opening a five-level flagship there in just about a week. The store is set to open on February 7th, which meant that not a lot major alteration is likely to have been done to the space (aside from adding another selling floor?). Expect that big, square-foot-gobbling atrium to remain in place.
Aside from the Nike switcheroo, it's not a total shock that Forever 21 would be coming to Fifth Avenue given that the chain spent an extended stay a couple of years ago in the former Takashimaya store nearby that eventually (and thankfully) became Valentino's flagship store. Next week, we'll be able to see how, if at all, Forever 21 has tailored its new home to its own requirements.

Forever 21 Coming to Fifth Ave. (WWD)

THE JANUARY AXE: Kate Spade Discontinues Saturday & Jack Spade Stores To Be Shuttered

The month isn't over yet, so there's at least one more bit of retail reorganization to be executed before we pass into February. Kate Spade has announced that it will be closing all of its Jack Spade and Kate Spade Saturday stores in the first half of 2015 as it will be folding the Saturday line back into the flagship collection and focusing Jack Spade on wholesale and online selling. A total of 28 stores will be closed including 16 Saturday and 12 Jack Spade locations, so here in New York we will have to say goodbye to the Saturday store on Spring Street as well as the original Jack Spade on Greene Street in SoHo where the men's brand was launched and the Bleecker Street store which was extensively renovated less than a year ago.
It must be noted that though the Saturday brand, an attempt to launch a more casual, lower priced offshoot, will apparently be discontinued, Jack Spade, the men's counterpart to the Kate Spade label, will remain in operation under a modified business model and available through stores like Saks fifth Avenue and Bloomingdale's among others. In fact, the brand is being expanded to include tailored clothing and dress furnishings, categories which, according to Kate Spade & Co. executives, are more favorably grown through wholesale strategies. Closing dates have not yet been announced, but before you get too excited about imminent store closing sales it sounds the stores will operate relatively normally through most of the Spring season before closing sales —if any—begin. Still, keep your ears to the ground. All of the New York stores are in highly desirable locations, particularly Bleecker Street (pictured above), so there may be pressure to turn over those leases to eager new tenants sooner rather than later.

Kate Spade to Wind Down Kate Spade Saturday, Jack Spade Stores (Wall Street Journal)

POINT OF VIEW: Chris Burch Speaks About C.Wonder's Spectacular Crash And Burn

There's no Critical Shopper column again today's Thursday Styles, but instead, the Times treats us to a profile of Burch Creative Capital CEO Chris Burch, the man who is, for better or worse, responsible for the nearly extinct retail debacle known as C.Wonder.
As far as we can tell, this is the first time that Burch has spoken in detail about the chain's failure, and as expected, he is somewhat guarded and just a little bit defensive. The article, by Laura M. Holson, recounts in detail the many mistakes of the ambitious rollout of the chain (along with some of Burch's other recent, unrelated blunders) including the ill-advised, expensive leases, the excessively rapid expansion, the costly overseas offices and, most prominently, the nearly universally recognized aesthetic similarities to his ex-wife Tory Burch's company's retail environments, products and general style. Unfortunately, Burch is legally restricted from discussing the lawsuit that brought C.Wonder and Tory Burch into civil court, but he does manage to speak about the chain in a way that is surprisingly remorseful, but ultimately not quite self-aware enough to fully comprehend why the venture was probably doomed from the start.

“I take full responsibility for the failure of C. Wonder,” Mr. Burch said in a telephone interview from his home in Miami. “Please understand that.” He said he wasn’t upset about losing his own money, estimated to be at least $70 million in investment and loans. “It’s not about my ego, O.K.?” he said. “It’s not about failing. It’s about the fact that this is a really good idea that should have been successful.”

While he still sees himself as something of a misunderstood visionary, he won't own up to the widely perceived notion that one of his main goals at C.Wonder was to show up his ex-wife's wildly successful brand which, in fairness, he did have a hand in creating —although exactly how big of one remains in question. The article is well worth reading at the very least as an anatomy of a retail venture gone wrong when there were so many opportunities for success despite its challenges, but for Burch it may just serve as a big caveat to anyone considering going into business with him in the future.

Revenge Retail Gone Awry? Tory Burch’s Ex-Husband Describes C. Wonder’s Fall By Laura M. Holson (NYTimes)

WATCH WATCH: Apple Watch Set To Arrive In April

The most anticipated tech item of the year finally has a vague release date —just in time for ...Father's Day?
Apple CEO Tim Cook reportedly revealed in a conference call on Tuesday that the  (Apple) Watch, first officially announced last September, will be ready for release this April, which is just under the wire for what was originally projected as an "early 2015" launch. Though a Holiday Season 2014 was always considered unrealistic, many industry analysts had expected a slightly earlier launch for the already heavily hyped item. Cook also indicated that there is no shortage of developers working furiously on software for the device.
Now what remains to be revealed is not when, but how the watch will be launched. Naturally, one expects that it will be available through Apple's own stores and website, but we may see the watch launched as more of a luxury item than a tech device. Shortly after it was first announced, Apple held a special preview at the Paris boutique Colette for fashion industry insiders during the unveiling of the Spring 2015 collections, which suggests that we may be more likely to see the watch's initial launch in stores like Saks Fifth Avenue and Bloomingdale's than at licensed resellers like Best Buy. Then there's the 18 karat gold Apple Watch Edition (pictured above) whose price, estimated to be in the several thousand dollar range, has yet to be announced, which is expected to be restricted to a highly limited distribution strategy including exclusive jewelers who may have never an Apple product before at all. While this may be new territory for even an upscale tech company like Apple, there is a depth of luxury experience in the company's Senior Vice President of Retail and Online Sales Angela Ahrendts, who came to the job from a position as CEO of Burberry. These details are probably going to be revealed in the next couple of months, but don't be surprised to see Neiman Marcus, Saks and even Nordstrom or Barneys vying over who who might get an exclusive on the item's launch.
And if anyone else is planning a major product launch this Spring, expect to be majorly eclipsed.

Apple Watch on track to ship in April, CEO Tim Cook says (AppleInsider)

REAL ESTATE GO ROUND: Is A Popular Fashion Venue In Danger?

The folks at Grub Street noted today that the fate of beloved West Village restaurant Barbuto at 771 Washington and West 12th Streets may be in question as a $70 million dollar deal for the otherwise innocuous two story building it resides in has just been set. What the foodie blog failed to note is that the rest of the building is taken up by Industria Superstudio, the photo studio/event space created by photographer Fabrizo Ferri in 1991. Industria has remained a key location not just for photo shoots in its seven studios and runway shows during Fashion Week, but for product launches and other events throughout the year. I is likely to play an even larger role next year as the official New York Fashion Week home is still up in the air. The deal for the former garage reportedly comes with 20,000 feet worth of air rights, and it's worth nothing that the building was sold just seven years ago for $28 million, making it a dramatic appreciation in value in less than a decade. Will Industria and Barbuto be profitable enough tenants for the new owners to keep them there? Will they be able to afford the inevitable rent hikes if they renew their leases? Is 12th street close enough to the Meatpacking District shopping scene to make it a viable retail location? Observers will probably find out soon.

Real-Estate Deal Might Not Bode Well for Barbuto (Grub Street)

THE JANUARY AXE: Gap's Piperlime Hits The Chopping Block

Yes, January's reign of terror on floundering retail ventures has not quite finished.
The Gap's contemporary women's web retailer Pimerlime is being shuttered along with its sole retail store in SoHo. Launched in 2006 as a footwear site for men and women meant to compete with Zappos, Piperlime transitioned to a women's contemporary focus after a few years, but never gained enough traction to expand beyond a the single retail door at 121 Wooster street in SoHo that is reported to be closing by the end of February. The website will cease operations by the end of March. Incoming Gap CEO Art Peck is said to be planning more sweeping changes, but so fat, this seems to be is most drastic move, and he isn't supposed to officially start until next month. Still, the division has yet to cross the $100 million threshold in sales, and, to an incoming boss, it must have seemed redundant next to the more successful, upper contemporary chain Intermix, which is now owned by Gap.
So, you can probably look for some good store closing deals at the SoHo Piperlime, though one suspects that most of the store's Spring deliveries have been cancelled at this point. What we can look for are more changes at Gap's various divisions. Banana Republic is just starting to see the influence of its new creative director, Marissa Webb, but the struggling flagship Gap chain is still due for a fix, after a 5% drop in sales over the Holiday season, so expect some dramatic news there soon.

Gap Inc. to Shutter Piperlime Business (WWD)

THIS WEEK ONLINE: Vera Wang, Jimmy Choo, Prada, Giorgio Armani, 10 Crosby Derek Lam, Jil Sander, Missoni, Naked & Famous, Moncler, S.T. Dupont, TOD's, Gant

Here is your weekly sampling of some of the brands you can expect to find on the bigger online Flash Sale Sites this week. You should click over to the sites themselves for a full schedule of events, and be sure to check for the correct start time for each sale. Happy clicking!

GILT GROUPE

Vera Wang, Cynthia Steffe, Ray Ban, Addiction Lingerie, Vivienne Westwood Watches, Jill Stuart, Alice & Trixie, Naked & Famous, Sam Edelman, Alternative Apparel, Jennifer Miller Fine Jewelry, SPANX, Saint Laurent, Gorjana Jewelry, Renvy, Love Sam, Missoni, HATCH Collection Maternity, TAG Heuer, Baldwin, Moncler, HUGO Hugo Boss —join HERE

RUE LA LA

Puma, Surya, TailorByrd, Da-Nang, HEYS USA, Samuel B. Jewelry, Vince, Elle Macpherson Intimates, Estee Lauder, Tommy Bahama, MICHELE Watches, Sophie Catalou/Kartoons Kataloons, Monique Lhuillier, Andrea Candela —join HERE

BELLE & CLIVE

Prada, Jimmy Choo, Angela & Roi, Giuseppe Zanotti, Lancôme, TOD's, Salvatore Ferragamo, Fendi, Robert Graham, Burberry —join HERE

HAUTE LOOK

Joe's Jeans, Bearpaw, Giorgio Armani, 10 Crosby Derek Lam, Chinese Laundry, ALEXIS, Steve Madden, Gorjana Jewelry, Tarina Tarantino, Gant, Jetlag, Stuhrling Watches, Bristol & Bull —join HERE

MY HABIT

Schutz, Magaschoni, Philip Stein Watches, Prada, Chloé, Ivanka Trump, Jil Sander, Roberto Cavalli Watches, Cullen, Puma, Grayers, Marc New York, Rose Pistol, English Laundry, Battistoni, Gat Rimon, Skagen Watches, Zachary Prell, Vince Camuto, Sanyo Outerwear, S.T. Dupont, Rogue, Emporio Armani Watches, Ike Behar, Ben Sherman, Borgo 28, Shades of Grey —join HERE

RENT HIKE STRIKES: Village Fixture Avignone Chemists Gets Pushed Out

Greenwich Village's fabled charm is getting squeezed away block by block. Avignone Chemists, a bright, stalwart Village fixture at the corner of Bleecker Street and Sixth Avenue since 1929, is closing to avoid a tripling of its monthly rent.
This is not surprising news, sadly, but it begs the question: Is there any future for a charming independently owned retail establishment in a nice neighborhood? Avignone's impending closure follows similar stories about beloved neighborhood haunts like the now closed Manatus Restaurant on Bleecker and Bonnie Slotnick's famous cookbook store being pushed out by landlords (usually brand new ones) who are swift to kick out longtime tenants in favor of potentially finding higher paying tenants —even if that means months or even years of empty storefronts before such a tenant is found. Slotnick's small but unique business was saved at the last minute by a fan who happened to be willing to rent her a suitable space at a suitable rate, but most businesses are not so lucky.
Avignone's current owner, Abe Lerner, who has run the store for the past 30 years, claims that his entire block is now owned by one company, Force Capital Management, which seems to think it can find better use for the 1,700 square foot space. "I've spent half my life here," Lerner tells DNAinfo. "I've known many of these people for 30 years; I've seen a lot of kids grow up. A lot of these people have become friends — they're not just customers, they're friends."
Lerner has until April 30th to vacate the space, and while he hopes to move to a new location as close to the old one as possible, though finding an affordable one in the immediate vicinity seems unlikely. Potential tenants at 281 Sixth Avenue are reportedly being offered the space for $60,000 per month. No word yet on any potential takers.

Avignone Chemists, Village Staple Since 1929, Closing After Rent Hike  (DNAinfo)

COMING SOON: Robert Graham Expanding To Columbus Circle

It's been about a year since Robert Graham arrived in Manhattan with a Bleecker Street boutique, ans, apparently it has been so successful that he is signing up for another. WWD tells us that the designer is bringing his multicolor pattern clashing sportswear to The Shops at Columbus Circle this spring. The 743 square foot shop will feature all of the label's shirting, and accessory lines as well as sportswear for men and women. Fragrance, loungewear and tailored clothing are expected to appear as they launch this coming fall.  No word yet on the exact location, but most of the mall is considered prime these days, especially as the date of Nordstrom's opening inches ever closer. Sure, it's still a deep pit at 57th and Broadway at the moment, but as soon as the department store and its massive tower are completed, the already desirable urban mall will become even more prized for retailers, so Graham is a few years ahead of the game. 

Robert Graham to Open Columbus Circle Store (WWD)
Previously:
Coming Soon: Robert Graham To Bring Bright, Fancy Shirts And More To Bleecker Street