It’s a sunny and warm late-summer Saturday morning and small groups of tourists linger in New York’s Financial District. They take photos of the New York Stock Exchange building then walk south from Wall Street, down Broad Street, which is partly cordoned off to limit traffic.
The area has a starkly different vibe on weekdays, when stockbrokers in suits outnumber the tourists and they ratchet up the energy level by darting between buildings to grab a coffee or conduct meetings.
“It’s much quieter on weekends,” said Jamez Smith, who manages a new Indochino store that opened in July a short walk from the stock exchange.
“But everyone wears suits around here so it is a prime location,” he adds as he adjusts a vest on a mannequin in the 2,800-square-foot space.
A competing made-to-measure suit seller, My.Suit, neighbours the stock exchange building while suit-seller Sarar is half a block away and across the street.
Indochino’s store in New York’s Financial District was the first of four new showrooms that the Vancouver-based company opened this summer. A fifth new store is set to open in Seattle in October.
New York is important for Indochino.
The company’s original Manhattan store in the Soho neighbourhood generates more sales than any of the company’s other 16 showrooms, except the one on Homer Street in Vancouver.
New York is also important to Indochino because Manhattan addresses add prestige to a brand.
The company’s CEO, Drew Green, told Business in Vancouver that he plans further Manhattan expansion, but not this year.
“It looks like we spent $1 million, but we spent a lot less,” Green said of his financial district store. “We took over a Canali store and got the benefit of all of their renovations.”
This is Part 1 of a two-part series on Vancouverites and B.C. companies in New York City. Part 2 in this series, is on Vancouver entrepreneurs who have found success in New York City. |
Green acknowledged that the store’s prime location helps increase its brand recognition among the financial world’s movers and shakers but said the store’s worth will be in increased sales and profit.
“We don’t invest in showrooms for advertising,” he said. “We invest in them as profitable stand-alone businesses.”
Other Vancouver companies are also going big in New York with glitzy flagship stores that have either lavish interiors or unique elements to make them destinations for customers.
Aritzia Inc. (TSX:ATZ), for example, has three Manhattan stores, including a 13,000-square-foot flagship on Fifth Avenue at 48th Street and an 8,000-square-foot flagship on Fifth Avenue at 17th Street.
“Flagship stores continue to be an important part of our real estate strategy,” Aritzia CEO Brian Hill told analysts during a July conference call.
(Image: The Aritzia store on Fifth Avenue between 16th and 17th streets has a spacious marble stairway between levels | Glen Korstrom)
He described stores slated to open this year in Chicago and San Francisco as “brand-propelling flagships” because they will be in iconic fashion districts, but Hill was not available to answer BIV’s question on whether he would consider the stores a success if they did not generate profit and simply heightened brand awareness.
Aritzia’s store on Fifth Avenue near 17th Street, for example, is a lavish boutique with a spacious marble stairway between levels.
A Lululemon Athletica Inc. (Nasdaq:LULU) outlet, directly across the street, is an even larger 11,500-square-foot space.
(Image: Hub17 manager Benjamin Fuller Todd sits in a suspended bamboo seat at his co-working space at a Lululemon store on Fifth Avenue at 17th Street | Glen Korstrom)
Both stores are about two years old, but the approach taken by Aritzia and Lululemon in opening the stores was very different because half of Lululemon’s square footage is not being used to display merchandise.
Lululemon’s store, which is the largest of what are now 11 Manhattan stores, was intended to be what CEO Laurent Potdevin calls a “destination location.”
(Image: New York or Nowhere sign sits at the entrance to Lululemon's gym at its store on Fifth Avenue at 17th Street | Glen Korstrom)
The stores draw customers who not only want to buy yoga wear but also want something more from their retail experience.
About half of the store’s square footage is downstairs and split between a free gym and a free co-working space, known as Hub17 – a name meant to remind people that the store is at 17th Street.
Hub17 manager Benjamin Fuller Todd told BIV that the store sometimes rents out the space for corporate events, but much of the time it is a free space for the community where people can use Wi-Fi and sway on some of the suspended bamboo chairs with plush fur seats.
The store’s large free gym has a motivational sign at the entrance: “New York or nowhere.”
Lululemon’s newest Manhattan store, which recently opened across the street from the Aritzia location at Fifth Avenue and 48th Street, draws some traffic for the chain’s first meditation area – a space Potdevin calls “mindfulosophy.”
He described the store during a September 1 conference call as a “destination location” and said the meditation space is meant “for visitors from all over the world to escape the city and allow them the space to take a moment to breathe.”
(Image: This gym sits under the Lululemon store on Fifth Avenue and 17th Street and is free for the public to sign in and use | Glen Korstrom)
Employees encourage shoppers to relax on comfy cushions and listen to one of a dozen different self-guided meditations on quality headphones.
“We are thrilled with the performance so far,” Potdevin said. “It’s accretive to our New York store fleet and allows guests from around the world to experience the brand.”
(Image: Customers at Lululemon's store on Fifth Avenue at 48th Street are able to sit on comfy cushions, don headphones and meditate at the chain's first "mindfulosophy" part of a store | Lululemon)
Retail Insider Media CEO Craig Patterson told BIV that many brands’ stores in New York are not making profits but that it is OK because the stores profile the brands in a meaningful way and are a substitute for billboard or magazine advertising.
“There’s no better place than New York, certainly in North America if not the world, to open a flagship store that’s experiential because, ultimately, if you’re devoting some of your retail space to experiences in a place where some of the rents are over US$3,000 per square foot, the retailer is probably not looking to make a profit off of that space,” he said.
“They’re looking to create a brand experience that consumers will remember when they go back to Tulsa, Oklahoma, or Calgary, Alberta. New York gets a lot of tourists, and they will take away that experience.” •
