New lingerie and sex shops defy recession and open NY stores

<i>Existing retailers also scout for more locations</i>

alternate textFrom left: Ashley Montgomery-Pulido and Samantha Bard at lingerie and sex toy store Shag

When Williamsburg artist Samantha Bard finished grad school last year, she decided it was the perfect time to open a local shop selling vintage lingerie, handmade sex toys and other erotic products designed by local artisans.

So what if the country was suffering the worst economic downturn since the Great Depression? Rents were only $55 a square foot, and she and her business partner, Ashley Montgomery-Pulido, wanted to take advantage of the decline in real estate prices. (In 2006, The Real Deal cited a statistic from Prudential Douglas Elliman that average retail rents in Williamsburg were between $100 and $110.)

The two found a landlord sympathetic to entrepreneurial artists, and signed a 10-year lease for 1,200 square feet of retail space in a former real estate office at 108 Roebling Street at North 6th, in their home neighborhood. The store — appropriately named “Shag” — launched late last year.

Best sellers so far include organic bath and body products from local brand Lei Lai. The store also sells work by local artists, carries quirky gifts such as customized nesting dolls with erotic photos, and hosts workshops on pole dancing and body painting.

Shag is part of a growing niche group of New York City retailers capitalizing on the ageless adage that sex sells — a maxim that’s especially true as the recession lingers.

While most of the apparel industry tanked last year, bra sales were the rare exception, according to retail trend tracker NPD Group. Experts attributed the uptick to the fact that lingerie is both an essential item, which women need even during an economic crunch, and a low-cost luxury.

Mentioning unmentionables, the roster of lingerie stores that have recently opened in New York ranges from nearly 25,000 square feet to barely over 1,000.

Victoria’s Secret gave the whole category a shot of adrenaline with last November’s splashy opening of its sprawling new 24,000-square-foot Soho flagship at 591-593 Broadway. Rent for the new space is said to be over $5 million a year, with revenues projected at $20 million annually.

Just last month, the old Victoria’s Secret store a few doors south at 565 Broadway refocused on the younger lingerie market, becoming the first New York City outpost of Victoria’s Secret’s sister brand, Pink. The line’s colorful sweatpants — stamped “Pink” across the rear — are popular with college students.

Other lingerie stores are on the horizon, sources said. Agent Provocateur, which already has two New York outposts (a store on Mercer Street and a concept shop in Bloomingdale’s), plans to scout Manhattan this summer for another store. And Pink is expected to open additional freestanding stores here if its first location does well.

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Likewise, Marc Finkel, managing director of Robert K. Futterman & Associates, who represented Coco de Mer in its deal at 236 Elizabeth Street in Nolita last year, is now keeping an eye out for Madison Avenue and Meatpacking locations for Coco, which also has two stores in London. And Bard said she hopes to expand Shag to the West Coast and Manhattan.

Retailers, confident that sex will keep selling no matter the economic backdrop, have been jumping in to secure long-term deals before rents climb again.

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For Intimacy, an Atlanta-based chain that specializes in accurate bra fittings, the area near Bloomingdales on 59th Street was the promised retail land for its second Manhattan store.

Stacey Kelz, a former Mogull Realty broker who now runs Stacey-Robins Realty, started looking for a location for Intimacy three years ago, but held off when rents reached $350 a foot.

Last summer, however, when rents dropped to $200 a foot, Kelz found a 2,400-square-foot portion of the former Searle store at 1051 Third Avenue at East 62nd for the lingerie store. It opened there in December, inking a 10-year deal with four months’ free rent time, Kelz said.

“We had a feeling the market had bottomed and we felt this was a great opportunity in a great location on the right terms,” said Kelz.

Part of lingerie’s appeal is that retailers can showcase exotic, expensive items (such as the $1,000-plus corsets offered at Coco de Mer) while relying on far less pricey goods to generate the bulk of their revenues. Intimate apparel sells for the low average retail price of just $5.47, according to a report in Women’s Wear Daily, making it a very affordable luxury during tough economic times.

“It’s one of the only things ever that makes people feel incredibly good no matter what, [and] if times are bad, you see that industry pick up,” said Finkel.

Retailers selling sex toys alongside lingerie have focused on young neighborhoods like Williamsburg, Nolita and the Meatpacking District. Those selling lingerie only, however, are looking to more established neighborhoods like Soho and the Upper East Side, brokers say.

Landlords said today’s crop of shops selling sex toys and lingerie represents a sophisticated new retail wave. Both Coco de Mer and Shag, for example, focus on work by local artisans. And Coco, which was founded by the daughters of the late Body Shop founder Anita Roddick, sells eco-friendly fair-trade products and supports charities that aid women.

“I wouldn’t call it a high-end sex shop,” said Ronald Ervolino, the building owner of 236 Elizabeth, home to Coco de Mer. “It’s a luxury erotic boutique.”