Tuesday, January 16, 2018

New Retail in 2018 - Changing Fashions and Impacts on Tenant Mix

Dan McCombie is a research associate at Larisa Ortiz Associates

I’ve been listening to the Loose Threads podcast lately and absolutely loving it. If you haven’t had a chance yet, I strongly recommend it. Though the topics skew towards apparel and fashion, the broader underpinnings of the conversations apply more generally to the current retail moment, exploring experiential retail, the growth of ecommerce, and the various ways stores are fragmenting and reconstituting themselves to meet changes in consumer tastes and preferences. The first episode I listened to was Episode 50, in which the host of the show, Richie Siegel, sits down with his former business partner, Charlie Giannetti, and they reflect upon lessons learned founding and running a NY-based menswear line, Gioventu.

What struck me most about their conversation was when Charlie explained how the genesis of the company in many ways had its foundations in the Garment Center.[1] While as a student at NYU, he used Photoshop to create a graphic design for a t-shirt. Without actually making a physical garment, he uploaded a mockup to Tumblr where it promptly went viral. Given its reception, he knew he was on to something:
“And so from that point I was in New York, skating around the garment district, trying to figure out how to actually produce a piece of clothing, and that was where it all started. I ended up making them, and made a Squarespace site, did a photoshoot on a disposable film camera, and we sold 100 pieces in like 3 hours, at $150 apiece for this T-shirt that no one had ever seen in real life.[2]                                                                                                                                  
This story strikes me because we’re always thinking about how to improve tenant mix in commercial districts. And inherent to that is the question of what type of tenants are going to be the most successful. Especially in the current retail environment, success parallels an ability to adapt. Whether that’s by leveraging new tech and social media, creating frequent iterations of products, or staying abreast of consumer trends. My belief is that to really flourish in these respects, it certainly helps to have access to an ecosystem of supporting actors and institutions, much like the Garment Center is for burgeoning apparel companies. Consider another example, presented by Outlier, a company described as the “darling of nerdy, direct-to-consumer technical menswear.”[3] In an interview with tech commentator and columnist Om Malik, co-founder Abe Burmeister tells a similar origin story:

“I rolled into the Garment District in New York, which is a like an ancient technology center — you know, the Silicon Valley of the 1900s or really late 1800s, when the sewing machine was invented. Ninety percent of the clothes in America used to come out of the Garment District, and so very few of them do now. It’s much smaller than it used to be, but there’s still a lot of life there….I started asking questions and eventually I developed a pair of pants that I thought were just better [than what else was available]. And because I knew a lot more about making websites than about making clothes, I thought, what happens if I put these things online? Will people buy ‘em? You know, like maybe that’ll work, and somehow it did. People started buying ‘em.”[4]
The reason I think these stories are important to our practice is because by understanding how companies are forming, how they leverage different skills (especially in regards to e-commerce and IOT), and how they perceive their role within the larger commercial environment, we can develop a better understanding of how to position commercial districts to attract them. I understand that these examples are limited to a very specialized and niche area of the retail industry and within a very specific urban context. But again, the larger question still stands: In what ways can access to an ecosystem of supporting actors and institutions, whether that be a concentration of complementary industries, college campuses, business incubators, civic organizations, what have you—create a pipeline that yields real growth in successful brick and mortars? If the Garment Center is a resource for companies like Outlier (a direct to consumer brand), how can it be leveraged so that it turns into more active storefronts in Midtown? I think there are a lot of different answers to this question, and I hope to see it continue to be discussed more as we travel deeper into 2018.

The Garment Center -1955 [5]
Richie Siegel, cofounder of Gioventu [6]

Outlier's "Shelter from the Storm" field jacket - 2017 [7] 

[1] For those unfamiliar, the Garment Center is located in Midtown Manhattan and is the fashion epicenter of both the New York and greater United States, home to the highest concentration of fashion-related retailers, wholesalers, manufacturers, and suppliers.

1 comment:

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