Designed with star cred, even in Delaware

For celebrity-owned stores like Kate Hudson’s Fabletics, location is not everything
By Monica Melton | May 01, 2016 10:43AM
Kate Hudson's Fabletics sports brand has branches in less well-known places like Bridgewater, New Jersey

Kate Hudson’s Fabletics sports brand has branches in less well-known places like Bridgewater, New Jersey

Celebrity retail ventures are often associated with prime neighborhoods, as with the Kardashians’ boutique apparel chain Dash, located in West Hollywood, Miami Beach and Soho. Established actors, musicians and athletes often set the stage for their initial retail endeavors by siting them in major cities, giving truth to the old real estate adage that location is everything.

But thanks to the built-in promotional power that accompanies these celebrity owners, where they choose to set up shop might not mean as much to customers, and star-powered brands are branching out.

Actress Kate Hudson, co-founder of the women’s sportswear clothing line Fabletics, is finding prosperity in cities that get little press play. Initially launched as an online subscription retailer in October 2013, Fabletics now has six stores, with locations in Bridgewater, New Jersey; Cincinnati, Ohio; and Newark, Delaware, among others. And a seventh is on the way, heading to Minnesota’s Mall of America.

Forbes reported in February that managers of the company — a subsidiary of the billion–dollar e-commerce company JustFab — are considering opening 75 to 100 stores over the next three to five years. Hudson’s brand has a broader appeal than many of its non-celebrity-backed competitors, which allows the retailer to tap into smaller markets, said James Cook, director of retail research for the Americas for JLL.

Hudson and her partners “are successful in every market that they go into,” Cook told The Real Deal. “Location absolutely matters, but it matters differently depending on the product that you’re selling.”

Mark Wahlberg’s chain of burger restaurants, Wahlburgers, has also found success outside the country’s top retail and dining destinations. Some of the venture’s more popular locations can be found in Massachusetts, where the actor was born and raised.

Wahlberg is a co-founder of the national burger chain with his brother Paul and Wahlburgers has had such a dedicated following that in 2014, A&E debuted a reality–TV series on the many dramas of the family-owned franchise.

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There also may be room outside major cities for the Kardashians, who have loaned their ubiquitous brand name to goods ranging from sex tapes and diet pills to perfumes and clothing. Dash could also draw a large customer base in less glamorous markets, said Faith Hope Consolo, who chairs the retail group at Douglas Elliman and likes to refer to herself as the Queen of Retail.

“With the Kardashians, everywhere you place them they do well,” she said.

Since iconic names will often draw support regardless of locale, Consolo said she has found venues for some celebrity-backed retailers in urban areas with less foot traffic. The Olsen twins’ line of handbags and eyewear, The Row, is one such brand, with its most recent venue, on Manhattan’s East 71st Street, under construction and expected to be completed in May.

“We put the Olsens’ store on a side street,” Consolo said. “But they have a following. It’s about the uniqueness of their product, so it is still a destination for customers.”

That said, not all celebrity-backed stores and restaurants are destined to thrive in secondary markets. While New York hip-hop mogul Jay-Z has built an impressive empire for himself — including a successful record label and clothing line — his 40/40 Club sports bars have struggled outside of Manhattan. The club’s Las Vegas and Atlantic City venues have both closed since 40/40 launched in 2003.

Knowing the demographic of an area and how to best reach customers should always determine where one sets up shop, said JLL’s Cook.

“Thinking big picture, if [celebrities are] looking to open a retail location, they’re not going to be doing the hard work themselves; they’re going to be choosing partners,” he noted. “The real key is in choosing the right partner.”