MINOR RELOCATION:

Apple To Take Over FAO Schwarz Space During Flagship Renovation

Apple5thAve
The Apple Store pictured above will temporarily move into the building behind the cube later this year.

While we don't yet know what will ultimately become of the FAO Schwarz retail space in the GM Building after the iconic toy store moves out on July 15th, we now know that the next immediate tenant will be the Apple Store which is reportedly taking over the place while its main flagship store underneath the plaza in front of the building undergoes an extensive renovation. The news was disclosed by Apple retail chief, senior vice president Angela Ahrendts to the Associated Press in an interview promoting the company's newest outlet set to open tomorrow on Madison Avenue. Though that new store will contain the company's signature minimalist wooden tables and fixtures, the building around it is reported to be a meticulous restoration of the former U.S. Mortgage & Trust building which will include chandeliers re-produced from vintage photographs and the original vault converted into a private shopping area —fitting for the store located in the neighborhood most conducive for selling the pricey golden AppleWatch Edition.
But back to Fifth Avenue. The famous store with the "cube" is included among the roughly 20 U.S. Apple Stores set for major renovation as they have outgrown their spaces since the introduction of the iPhone and other new products that have transformed the company's offerings. Exactly when the Fifth Avenue store's renovation will begin or how long it will take is unclear, though it is likely to start as soon as the FAO Schwarz space can be converted to Apple's temporary requirements. When that happens, the GM Building's Fifth Avenue retail spaces will be entirely devoted to temporary stores with Cartier on the northern corner, waiting for its own flagship a few blocks downtown to finish its extensive revamp, and Apple on the southern side. While the famous "cube" entrance is expected to remain, it sounds like the rest of the store will be dramatically updated. Whether or not the temporary store will maintain the flagship's 24-hour schedule is also unknown at the moment, but Apple is uniquely fortunate to be able to take over a large high profile location only steps away so it can continue doing business at it's highest volume retail outlet without any interruption.

In With The Old: Apple Restores Former Bank For New Store (AP)


FIFTH AVENUE FAREWELL:

FAO Schwarz Officially Closing In July

FAOSchwarzOfficialWe have been hearing about FAO Schwarz's departure from its longtime home in the GM Building on Fifth Avenue for months, years even, but now we have a more definitive date —and it's practically upon us. Bloomberg Business is reporting that the renowned toy store will be shuttering its iconic store sometime in July, well in advance of the end of its lease in 2017 leaving the company without a physical store as it searches for a new flagship. Toys "R" Us Inc,  which owns FAO Schwarz, promises that a new store should be open by late 2016, which leaves a long stretch for the company to be without an outlet. Recent rumors have had the company eyeing a large Apple Store-like space in the Paramount Building at 1633 Broadway between 50th and 51st Streets that is best known as the former home of space-age theme restaurant Mars 2112. The building itself is configured similarly to the GM Building with a front plaza and situated just above tourist friendly Times Square which would make the proposed FAO Schwarz store an appropriate replacement for the immense Toys "R" Us store that is also set to depart its home a few blocks downtown.
So far, the only thing that is confirmed is the Fifth Avenue store's impending closure, though a replacement site should be determined so. As for the expansive space in the GM building to be vacated, most speculation has it being subdivided to create a few separate retail spaces, although a big store with deep pockets could come along and take the whole thing. With Apple in front, and a temporary Cartier store on the other side that may become permanent, it will become one of the highest profile unclaimed retail sites in midtown.

FAO Schwarz’s Manhattan Store to Close in July as Rents Rise (BloombergBusiness)


LEASE WOES:

Pearl River Mart To Shutter In SoHo As Rent Quintuples

PearlRiverMartSoHo
It's an old story, but no less distressing  each time it plays out. Pearl River Mart, a SoHo institution famous for inexpensive but often surprisingly stylish Chinese imports, is set to close its store after 44 years of business as its rent on Lower Broadway is set to increase fivefold when the current lease expires at the end of this year. Pearl River currently pays over $100 thousand per month for three levels of shopping over 30,000 square feet, and it has been in the location since 2003, when it moved from a smaller, dustier space at the corner of Canal Street and Broadway. When the store moved to Broadway between Broome and Grand Streets, the trendy shopping district in SoHo ended abruptly at Broome Street. South of that border was mostly relegated to local sneaker and streetwear stores, and bargain resource Pearl River was actually upgrading the neighborhood. Since then, SoHo has become an even hotter destination, and chains like Muji, Topshop, Madewell and CBR to name a few as well as home-grown phenomena like Opening Ceremony have pulled customers south on Broadway sending rents soaring. If you think that a five-fold rent increase after only twelve years is excessive, then you are right, but it shows you how aggressive New York City landlords have become in making sure that they are maximizing revenue from all of their properties regardless of how it affects presumably good tenants.
As of yet, Pearl River does not have a replacement location lined up, and, according to Crain's, and will shift its business to an online platform. The building's owner claims to still be negotiating with Pearl River to remain, perhaps on upper floors, but the store's owners are looking to head closer to its origins in Chinatown, possibly to space below Canal Street where the rent would be in the $90 per square foot range. Still, leaving its now lavishly spacious digs on Broadway will likely mean that the store will have to trim its inventory of over 17,000 different items. Hopefully, Pearl River won't have to move too far away. Once a best kept secret of fashion stylists and downtowners, many Manhattanites have found themselves exploring the vast offerings there while stocking up on basic kitchen items or bamboo chopsticks or classic but affordable blue and white planters or any number of other popular items of Asian origin. It's one of those places you don't find everywhere that makes shopping in New York that much more special.

Famed Pearl River Mart will close its SoHo department store (Crain's)


FLAGSHIP FLUX:

Toys R Us To Abandon Its Immense Times Square Flagship

ToysRUsWhat does it mean when big box megastores can no longer afford the rent?
Yesterday, The Observer reported that Toys R Us would not be renewing the lease for its huge, 110,000 square foot, three level Times Square flagship which begs the question: Where's that ferris wheel going to go?
Probably a block or so away. Rumors have the retailer moving to a smaller, but still sizable space at the base of the Marriott Marquis hotel, though a spokesperson for the company refused to confirm any future locations.
Don't look for another lavish showplace to replace the tourist toy palace though. The combined rent for the space currently rates at a whopping $2,500 per square foot for the ground floor portion of the space, $350 on the upper level and $150 on the lower level, and it is unlikely that another retailer which would even be eligible for such a space would operate there profitably. Look for the space to be split up into smaller parcels, and that means that after Toys R Us exits in 2016, there will be an extremely long renovation and gutting process, so don't expect anyone else to be open in that space at 44th and Broadway for quite some time. As for Toy R Us, if they don't find another space to relocate to, that would leave Manhattan with no large toy retailers at all, as the Toys R US-owned FAO Schwarz is also expected to leave its pricey GM Building home on Fifth Avenue, possibly for a mega-mall in New Jersey. While there is a smattering of smaller, independent toy stores scattered through the borough, as well as a much smaller Toys r Us "Express" shop in the Manhattan Mall, anyone with their own kids —or just kids in their lives who periodically need presents— knows that a large toy discounter with the wide selection of Toys R Us is an indispensable resource. While the store is certainly a major tourist draw, it is also an important place for locals to shop, mainly because it is the only store of its kind in Manhattan. Competitors have been clobbered by both Amazon and Walmart, leaving the veteran chain in the position of the last one standing. The question is where? As retail rents on desirable shopping streets continue to rise to unprecedented labels, one has to wonder when the deep pocketed retailers who have fostered these rent increases draw the line and say no. Toys R Us seems to have hits its limit for such an expense. Who will be the next big chain to tell landlords that rents have gotten out of hand?

Toys R Us Leaving Flagship Times Square Location (NY Observer/Commercial Observer)


RENT HIKE STRIKES:

Village Fixture Avignone Chemists
Gets Pushed Out

AvignoneDNAinfoGreenwich 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)


SURPRISE SHUTTERING:

Robert Lee Morris Promises
An Uptown Move

RobertLeeMorrisIn a sad bit if year-end new, SoHo stalwart Robert Lee Morris (pictured right among his designs) has closed his longtime West Broadway boutique after being a fixture in the neighborhood since the late 1970s. One can only presume that rent issues have prompted the longtime presence to vacate the shop after 20 years, but the innovative jewelry designer remains undaunted, promising, with a note on the door and a post on his Facebook page, that the hunt is on for a smaller, quieter "jewel box" location uptown. Though his bold fashion jewelry designs have been highly influential over the years, Morris has also been a force in elevating American fashion jewelry design. His first store, Artwear, also served as a showroom of sorts not only for his own work, but for other up and coming designers at the time like Ted Muehling and Cara Croninger among others, whose editorial credits were often written as being "for Artwear", emphasizing a more artisan as opposed to commercial point of view. After 1994, Morris struck out on his own when his brand exploded, helped along by high profile collaborations with Calvin Klein, Geoffrey Beene and Donna Karan to name a few. His designs, based on natural forms and made of anything from semi-precious minerals to oxidized metals to sterling silver and gold, have become iconic, so hopefully, New York won't be too long without a Robert Lee Morris store. We'll be keeping an eye out for a new location soon.

Robert Lee Morris Shuttering NYC Store (WWD)


FASHION IN FLUX:

Mercedes Is Out
Downtown Is In
Big Changes This Fall For Fashion Week

MBFW-LincolnCenter
Next month's New York runway shows will be the official end of Fashion Week as we have known it for quite a while. Major announcements from WME-IMG, which owns Mercedes-Benz Fashion Week point to big changes, but only hint at what we may see in the future. For starters, this Fall, there will be no big cars greeting guests on their way to shows. Mercedes-Benz is ending its title sponsorship of the event, and WME-IMG is not looking for a replacement. The event that the management agency will be running will now be called simply New York Fashion Week in a generic and probably difficult to trademark way. There will still be sponsors, but none will be allowed to overshadow the business at hand by putting their names on the event.
We have known for a while that next month's round of shows would also represent the last time that the tents would be pitched in Damrosch Park at Lincoln Center (pictured above) regardless of recent court rulings regarding public park use, but there may be no more tents at all in the future at all. New York Fashion Week is said to be heading downtown to a still undisclosed location which may, at least for the moment, turn out to be Milk Studios. WME-IMG is in negotiations to purchase MADE Fashion Week which has been held there since 2009, originally known as MAC & Milk. While it has been seen as something of a rival to the hyper-commercialized tents, MADE was originally created to support emerging and independent designers. Operating without expectation of profits, Made covered all production costs for its spaces, requiring designers only to pay for models, music and hair personnel, saving them tens and even hundreds of thousands of dollars in show costs. Since the soon-to-be-former Mercedes-Benz Fashion Week has been a profit based organization since the CFDA sold the non-profit 7th on Sixth to IMG, nobody is sure how this will shake out by the fall shows in September.
The upshot here is that WME-IMG is shedding a formerly central but now diminished set of tent venues in favor of a cooler downtown entity that has been embraced by the same fickle fashion crowd that rejected the Lincoln Center tents. MADE, however, is simply too small to replace MBFW in practically every way. The Milk Studios building on 14th Street lacks the space to replicate the largest tents that bigger, more established designers require, even if one includes nearby affiliated spaces at the Standard Hotel and Highline Stages. Conventional wisdom has New York Fashion Week ultimately moving its central hub to the still yet to be constructed Culture Shed planned for Hudson Yards in 2017 on West 30th Street between Tenth and Eleventh Avenues. The $300 million exhibition and event space project is privately funded and includes Diane von Furstenberg on its board. It has been talked about as a potential home for New York Fashion Week since its inception, and it would seem that WME-IMG is likely to hold off finding a permanent home for a couple of years until it can take up residence there. The Culture Shed will have four runways and various studios and other spaces as well as the capability of creating indoor and outdoor show spaces, and seems to have been designed in part to serve as a fashion venue.
One more major change that will positively affect the Septembers Fashion Week shows is the expected absence of menswear from the schedule. For the first time since the late 1990s, New York's men's designers are expected to show their Spring 2016 collections in July to coincide with their own market dates. Showing alongside women's collections has never been ideal for New York's menswear labels, and many major designers have been already been defecting to Europe to show or simply holding less formal presentations during market weeks in recent seasons. Now their absence in September will help to ease up what has been a grossly overcrowded schedule, and allow them to stage more formal, attention getting shows on a more timely schedule.
Much is still up in the air about how Fashion Week will run this fall, but it seems likely that we will see some flux for several seasons. With grousing about the shows at a high this past year, however, some major change is long overdue.

Changes at NYFW: IMG to Buy Made, Change Name (WWD)


FLAGSHIP FLASH:

Bottega Veneta Plans A Bigger Beachhead On Madison Avenue

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Bottega Veneta is on the move.
As fortunes at its big sister brand Gucci have stagnated, the quieter, more exclusive label has been charging ahead consistently, and now a shiny new flagship on Madison Avenue is in the works. Reports have the brand taking out a generous 24,000 square foot space cobbled together from three separate buildings at 740 Madison Avenue (rendering pictured above), a property that has been under renewal for quite a while in preparation for just such a tenant. The Bottega store will be cobbled together from three different townhouses also including 23 and 25 East 64th Street on the northwest corner of the tony intersection. Speculation has this store as a replacement for the label's longtime flagship on Fifth Avenue in the St Regis Hotel. That retail space is now owned by rival luxury group Richemont, which, conventional thinking wold seem like an unsuitable landlord for a competitor. Whether or not that store will move, the other consideration is that Bottega Veneta may merge its separate, smaller men's and women's Madison Avenue boutiques (at 23 East 67th and 849 Madison at 70th) into a larger, cohesive store. It seems unlikely that those stores would remain in place with a big new one only a few steps away, but who knows?
At the very least, the move is a big vote of confidence for Bottega Veneta and its creative director Tomas Maier who has been leading the label since its revival under its current ownership. He has been mentioned (along with half a dozen other random names) as a possible successor for outgoing designer Frida Giannini at Gucci, but it is unlikely that owner Kering would risk disrupt Bottega's success to fix Gucci's stumbles, especially after investing to grow Maier's own signature label into a bigger business as well. It looks like he'll stay put for a while, and get a nice new home for his trouble.

Bottega Veneta leases Wildenstein family property (The Real Deal)


BOOK BEAT:

Rizzoli's New Store Is Well Under Way

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We are still missing the lavish Rizzoli bookstore that was demolished earlier this year on West 57th Street, but fellow fans will be relieved to know that its announced replacement at 1133 Broadway at 26th Street is well under construction and shows every sign of meeting its Spring 2015 projected opening. The company is betting on the continued rise of the NoMad neighborhood, and the store is only a couple of blocks from its fellow Italian themed merchant, Eataly, which draws a healthy share of tourist crowd who will hopefully be encouraged to wander uptown not only to Rizzoli, but also Opening Ceremony, Maison Kitsuné and a host of trendy restaurants (Note the map from the store's website below). The 1896 building where Rizzoli will reopen is of a similar vintage as the store's previous, uptown townhouse home, though it's hard to imagine that it will be possible to replicate the same kind of lavish residential-style interior in the 5,000 square foot space. Hopefully, the store will pay some kind of tribute to its elegant former trappings, and it looks like we won't have to wait terribly long to find out.
RizzolibyAntonioMonteverdi


MAJOR RELOCATION:

Is FAO Schwarz Moving Its Flagship To A New Jersey Mega-Mall?

AmericanDreamMeadowlands
The rumors that fantasy toy emporium FAO Schwarz is soon to leave its Fifth Avenue home gained some traction yesterday as reports surfaces that it was planning to move to an immense mega-mall project in New Jersey whose future is almost but not quite assured.

The American Dream Meadowlands project has released a flurry of promotional materials lately as it headlines the International Council of Shopping Centers’ annual retail convention at the Javits Center this week according to The Record's NorthJersey.com. The mall, which is currently very much under construction, will be an unprecedented shopping/entertainment complex for New Jersey and the entire East Coast, really. It can only be fairly compared to the humongous Mall of America in Minnesota which claims to be the midwest's number one tourist destination. It also boasts the same developer, Edmonton, Alberta based Triple Five Worldwide, as the Meadowlands project, so they have some experience with this kind of massive project. Along with what is claimed to be FAO Schwarz's only store, the mall claims that 140,000 square foot Saks Fifth Avenue and 110 square foot Lord & Taylor stores (pictured flanking a proposed hotel in the rendering above) are confirmed for the East Rutherford, NJ project's luxury wing to be called "The Collections at American Dream". Nearly every other mass retail chain and mall store is also said to be signed or close to signing to the project including letters of intent to lease from 155 retailers and 93 completed leases from retailers who have yet to be specifically identified. Meant to become a tourist attraction on the scale of its midwestern sibling with a specific intent to attract tourists from China and the far east, the mall is also planned to have an aquarium, miniature golf course, Cirque du Soleil theater, 26-car observation wheel, the first indoor ski and snowboard park in the Western Hemisphere including an 800 foot indoor ski slope and an NHL-sized skating rink aside from the expected movie theaters and multiple wings of restaurants ranging from fast food to more upscale offerings like Bice, STK and a branch of the Carnegie Deli. A whole wing dedicated to outlet shopping is also planned as well as pretty much anything else you have ever heard of being in a shopping mall.

Triple Five has yet to release official press materials confirming its plans, and is currently promoting itself only to retailers and other potential tenants, but they seem to be further along than the other grand retail plans that have been proposed and abandoned for the Meadowlands including the famously abandoned Xanadu complex. As for the stores named as committed, none of them are publicly confirming plans either, though Saks could use the American Dream store to replace the Hackensack NJ location it has announced to be closing.

As for FAO Schwarz, rumors of its future at the GM Building have been swirling since it recently signed a lease extension only through 2017, and some of the store's current space has reportedly been marketed for subleasing. Parent company Toys R Us claims it has not signed a lease and is only exploring the American Dream mall as a way to expand the brand in New Jersey that would have nothing to do with the future of its New York flagship. Though shifting its flagship to New Jersey could chip away at the brand's prestige, relocating to a tourist-magnet mall could be a smart move and it would most likely relieve the pressure of the crushing Fifth Avenue rents that a renewal in its current location would inevitably bring.

The mall is slated to open for Holiday 2016, which is exactly two year away, so if any of these stores are planning to move in, they would need to be signed and confirmed either already or in the imminent future. Now that Triple Five is in full promotional mode for the project, we can expect to be hearing a lot more about it soon.
Stay tuned.
We might all be hopping over to New Jersey to entertain ourselves at the Mall sooner than we think.

Retail giants lining up, American Dream saysAmerican Dream pushes its vision at retail convention (NorthJersey.com via Racked)