Upstairs, Downstairs

April 1998

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Upstairs, Downstairs

When ground floor retail space becomes too expensive

New York City stores are taking the art of retailing to new highs – and lows. In the past couple of years, the phenomenon of "vertical retailing" has taken hold, with store owners taking advantage of lower rents in the basement and above-ground-level floors to build up and down rather than out.

In the jewelry world, Tourneau's four-story flagship is the most prominent example of the trend. But as an article in The New York Times points out, Tourneau is far from the only Manhattan retailer to go vertical. The fashionable new Shanghai Tang clothing and home furnishings store has a lower level and a mezzanine. Rents in its neighborhood are reaching $400 per square foot on the ground floor, but a mere $150 to $175 per foot on other levels, according to a retail specialist quoted in the article.

Vertical retailing is good for landlords too because they can charge higher rents for retail space than for office space, the article points out.

The new store layouts call for some retailing ingenuity. Some firms – including Tourneau – lure customers from one floor to another with special attractions, including exhibits and videos. Others tuck their most popular merchandise (and in at least one case, the restrooms) on the basement level so customers have to walk through much of the store to reach it. Shanghai Tang makes its lower level inviting with attractive lighting and high ceilings.

The ticket to success is showmanship. As one store designer told The New York Times: "If you really are to do well, you have to design a space that produces a more theatrical type of retailing."


New Tourneau store in New York City.



Copyright © 1998 by Bond Communications.


 

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