When FAO Schwarz shuttered the doors on its flagship store in January 2004, it marked the end of a storied company, and caused a collective gasp as New York parents looked around and realized retail options for their kids weren’t in good shape on the island of broken toy stores.
While the kids clamoring to get through the doors of the Midtown landmark made a much louder noise, the din underscored the fact that changes were afoot in children’s retail. Since then, FAO has reopened its doors under private ownership, while the Union Square branch of Toys R Us the big box retailer that unseated the grande dame of toy stores has also found New York a tough place to do business. That doesn’t mean toy sellers, for-profit playspaces and kids’ clothiers aren’t willing to give it a try.
The resurrection of FAO and the troubles of Toys R Us are far from the only shifts in children’s retailing happening in Manhattan. “We’re seeing a big upswing in children’s retail,” said Faith Hope Consolo of Prudential Douglas Elliman, who’s brokered many deals for retailers targeted to young customers. “We haven’t seen this much growth in the market in 10 years, and much of it is specialty toys and expensive European children’s clothing.”
The children’s retail sector is made up of stores targeting kids aged zero to nine — and no less their parents — and revolves heavily around clothes, toys and food offerings. Market research firm Mintel reports that children’s retail was responsible for $40 billion in spending nationwide in 2002, and that figure could reach $51.8 billion by 2008. The average American family spends $3,868 per year on amenities for children.
In Manhattan, children’s retail outlets are branching out from family neighborhoods such as the Upper East and Upper West Sides, while a proliferation of kiddie boutiques are selling New York parents on the notion that imported toys don’t mean truckloads of plastic gewgaws that didn’t reach Wal-Mart.
Build-A-Bear Workshop, which sells a wide variety of stuffed animals and accessories, opened its first Manhattan store in October 2004 at 565 Fifth Avenue. The chain has numerous locations in suburban New Jersey as well as 170 locations nationwide but hadn’t found the right location in the city. Fifth Avenue and 46th Street, with its mix of tourist traffic and nearby office space, proved the clincher for Build-A-Bear (it replaced a branch of music retailer HMV).
“Retailers are looking for dense residential or tourist areas, ideally where there are other major retailers and not necessarily kids,” said Consolo. “If it’s near a great women’s apparel store, that works. Fifth Avenue is a bit of a departure, but given the tourist traffic, more children’s retailers are interested.” Spring Flowers, an upscale children’s boutique, settled their new store a few blocks away, at 538 Madison Avenue.
The opening of Kidville, NY on the Upper East Side is another indicator that kiddie cash is king. The four-level space on 84th Street between Lexington and Third avenues was converted from a parking garage to a 20,000-square-foot complex mixing retail, classrooms, and play space.
David Rozzi of Gruzen Samton worked with Kidville co-founder Andy Stenzler on the initial designs. “We wanted a place that served both the children and the caregiver,” said Rozzi. “And we wanted it to be entertaining, but with sophistication.” Stenzler and wife Shari Misher Stenzler worked closely with Rozzi on designs, also assembling a team of consultants with experience in children’s spaces.
The club now claims 1,500 member families since its February 2005 opening. And with its Upper East Side location, Stenzler sees no reason that the number won’t keep growing.
“The Upper East Side has the highest density of families with children under 5 in New York,” he said. “But we think the market is underserved elsewhere in Manhattan you’ll see us next on the Upper West Side and then Downtown.”
In other new arrivals, a 10,000-square-foot private club called Citibabies, located at 52 Mercer Street, is slated to open in autumn.
If growth of children’s retail is strong now, it is hard to say what the future holds for the market. The number of children in Manhattan and the city both climbed over the period from 1990 to 2000. According to data from the 2000 census, Manhattan had 149,000 children under age 9, a 2.7- percent increase from 10 years prior. Citywide, the younger set grew by 14.5 percent to 1.1 million. It will require another sampling in 2010, before it’s clear how hospitable New York really is for families.
Consolo believes the trend toward niche children’s retailers will find traction in other boroughs.
“The big push right now is in Manhattan,” said Consolo. “But that often means Brooklyn and Queens will soon follow.”
She sees evidence that niche retailers will be able to hold off the box retailers when it comes to serving kids.
“I see even more specialty toy stores for children parents really like the service-oriented atmosphere of the stores, and the way they combine retail with kids’ play spaces,” she said. “There’s certainly still some room in the high end.”