c.2014 New York Times News Service
c.2014 New York Times News Service
NEW YORK — With smartphones replacing landlines and online calendars doing the work of assistants, it often seems as if the modern office has moved permanently into cyberspace.
But the opposite seems to be happening in New York’s fashion industry.
In the last few years, many of Manhattan’s top apparel businesses have expanded or reconfigured their offices to allow for larger brick-and-mortar showrooms, where retail buyers can run their fingers along sleeves before deciding whether to purchase sweaters or other clothes for their shops.
Sometimes, the companies have merely shunted employees into small, shared offices to create bigger showrooms.
In other cases, according to industry analysts, companies have had to relocate to be able to afford intermittently used showrooms, avoiding the escalating commercial rents of traditional fashion strongholds like the garment district and SoHo.
“You really have to be able to touch and feel the products in your hands,” said Matthew Astrachan, a vice chairman with Jones Lang LaSalle, the commercial real estate firm, who has worked with dozens of fashion clients over two decades. “You can’t rely on a screen to sell clothing.”
In agreement, it seems, is the PVH Corp., a global apparel company that brokers say is now renovating and expanding a series of showrooms at 501 Seventh Ave., an 18-story prewar high-rise at West 37th Street. Among the showrooms will be one for Speedo.
A global conglomerate whose brands include Tommy Hilfiger, Calvin Klein and Izod, PVH renewed its lease for floors 10 through 15 while adding the 9th floor, with 27,000 square feet, as well, said Astrachan, who brokered the deal, which was the largest in the fashion sector last year. Asking rents in the building are $45 to $50 a square foot.
The deal, which came soon after PVH bought Warnaco, another apparel company, for about $3 billion, also allows the company to consolidate operations; a two-level Calvin Klein office on West 40th Street is now in the process of being shuttered, Astrachan said. Rents have spiked in the Midtown South area since many of these firms signed leases a decade ago.
In recent years, Valentino, the Italian designer, has reshuffled its American headquarters at 11 W. 42nd St., a 1927 high-rise overlooking Bryant Park, to turn offices into showrooms, like one on the 26th floor. Today, it sports dark wood floors and bright track lights.
Employees crowd a warren of narrow rooms toward the rear of the floor; on a recent afternoon, a 100-square-foot space that once was a single office had five employees, brokers said.
Echoing a design trend prevalent among technology startups, fashion companies like Valentino are putting employees in closer quarters to foster collaboration, brokers say, while also using space more efficiently.
Typical fashion employees require 20 percent less space than five years ago, according to Daniel O. Horowitz, a broker with Studley who has represented Valentino and similar firms.
And young people are comfortable with the type of bench seating made popular by Starbucks and other places, said broker Jeffrey Peck, Horowitz’s partner.
“Obviously, employees are very important, and you want to give them the best working environment possible,” he said. “But benching frees up space for showrooms and amenities.” By reconfiguring its Madison Avenue office in 2009, for instance, Burberry was able to build a cafe, Peck said.
In an industry that has faced sluggish sales over the last few years, showrooms can also serve another purpose — they allow designers to assert more influence over the buying process. Valentino’s Missoni brand, for instance, is presented in a 31st-floor showroom where handbags are arrayed on glass shelves, in a mirror image of a Missoni store, to better connect with buyers, Peck said. Efforts are also underway to make other showrooms in the office more closely resemble Valentino retail locations.
Changes in the fashion industry have had a significant effect on the city’s real estate. The number of jobs in the fashion industry in Manhattan has declined to 38,000 today from about 200,000 jobs in 1960, statistics compiled by garment district Alliance, a business group. Along the way, what once was predominantly a manufacturing business became a wholesale business, with cutting and stitching done outside the city.
Still, fashion deals accounted for 6 percent of the commercial real estate market share last year, based on square footage leased, according to Jones Lang LaSalle. Law firms, in contrast, represented 10 percent of the market.
And the fashion sector is enjoying some growth. In 2013, leasing activity ticked up about 1.7 percent over the historical average, Jones Lang LaSalle showed. Law firm leasing declined 3.5 percent in the same period.
Overall, fashion companies signed 16 leases in 2013, according to Jones Lang LaSalle, up from 12 in 2012, and there have been three so far this year.
With intensifying reliance on the sales process, fashion firms are increasingly venturing beyond the garment district, with the comfort of the buyer in mind, business leaders say.
The fashion businesses today make up about half the tenants in the area, which roughly stretches from Fifth to Ninth Avenues, between West 35th and West 40th Streets, the Alliance said. Tech firms, among others, are gobbling up the extra office space.
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Even the Council of Fashion Designers of America, a trade group, has pulled up its stakes. In 2012, it moved from its longtime home on Broadway at West 39th Street to Bleecker Street in NoHo.
Last year, Derek Lam, a fashion company based in SoHo, decided to seek a new office. Its two-level space on Crosby Street was impractical because it was hard to wheel clothing racks between floors, said Jan-Hendrik Schlottmann, its chief executive. And it needed more than one showroom.
Schlottmann considered the garment district, but found its streets too hectic and lacking in restaurants. Instead, he picked 105 Madison Ave., at East 29th Street, an 18-story prewar building with traditional office tenants near Madison Square Park.
The company’s space features rough concrete floors and a pair of showrooms across 13,500 square feet on one level.
More convenient to clients like Bergdorf Goodman than the SoHo office, the company’s new location, which opened in December, is also close enough to the garment district that employees can hop over to pick up buttons and trimmings, said Schlottmann.
Not to mention that rents are also cheaper. They were most likely more than $50 a square foot in SoHo, brokers say, but are in the mid-$40s in NoMad, as some call the area (for north of Madison Square Park).
Though fashion companies may be rare now, the area is increasingly on firms’ radar, locals say. Buzz is being generated by the Dover Street Market, a hipster version of a department store that opened this winter at Lexington Avenue and East 30th Street, inside a templelike former college building.
In the end, fashion firms probably can’t be based too far afield. When buyers come to town, they don’t want to spend all their time shuttling around in cabs, Schlottmann noted. “You’re from Dallas, and Neiman Marcus, you come to town, and you have to stick to a schedule, going from one place to the next. You have to keep that in mind.”