Another speedster may be coming to New York.
The niche is called “fast fashion,” an approach to retail that involves constantly updating merchandise to surf the latest fashion trend.
While the approach has paid off in Europe, where profits have soared amid voracious consumer demand, fast fashion retailers have captured just one percent of the total U.S. market, compared with 12 percent in the U.K. and 18 percent in Spain.
But now Britain’s Topshop is saying that it wants to come to New York, putting it in direct competition with Hennes & Mauritz (H & M), Zara, Bebe and Mexx.
What’s more, rumors of a 60,000- to 90,000-square-foot flagship location persist. The largest of H & M’s eight New York City stores is only 35,000 square feet, said Faith Hope Consolo, head of the retail leasing and sales division at Prudential Douglas Elliman.
Topshop’s owner, billionaire Sir Philip Green, is said to be willing to part with $50 million if he finds a spot to his liking. But speculation is that finding such a large site may not be so easy.
“They’re going to have a problem finding that much space,” said broker Henry Goldfarb, senior managing director of Grubb & Ellis.
When Bloomingdale’s took over the Canal Jeans company site in 2002, it snagged a 124,000-square-foot space, and yet in three years the market has changed considerably.
“They’re talking about coming in to the hottest market,” Goldfarb said. “Whoever has that [property] knows they have gold.”
“Every broker in New York plus their banker wants that business,” he added.
In the U.K., Topshop has won rave reviews for its free in-store personal style advising service (working out of soundproof VIP changing areas) and for such perks as complimentary massages, on-the-spot alterations, breakfasts and even makeovers.
At Topshop’s flagship store on Oxford Street in London, new stock is delivered as often as three times a day in peak periods.
“People love to browse and what makes browsing rewarding is seeing lots of new things,” said Candice Corlett, a principal at WSL Strategic Retail, a New York consultancy.
“That’s what they do, and they make it very visible — by constantly rotating new fashions in and out. It’s an incentive to stay in the store if something new will be on the floor in a half hour.”
Topshop already has its fans in the U.S. as well. In September of last year, when the company decided to enter into a partnership to sell its line at Opening Ceremony — a multibrand retailer at 35 Howard Street in Soho — the news caused a frenzy amongst New York fashionistas.
Dana Telsey, CEO of Telsey Advisory Group, an independent research firm focusing on retail, said Topshop will find success when it rolls out its stand-alone stores.
“Topshop will do well here in the U.S.,” she said. “The appealing fashion and exciting store element are all factors that make for successful retailing,” noted Telsey, “and their brand name is well known here.”
For its new store, Broadway in Soho, where Sir Philip can expect $300-per-square-foot pricing for ground-floor spaces, is the odds-on favorite given the area’s established fast-fashion cachet.
While Soho may be an option, according to Consolo, Sir Philip has also been talking with landlords in the Meatpacking District, western Wall Street and the Lower East Side.
Creative development and landlord foresight would help the process along, said Susan Kurland, executive vice president at CB Richard Ellis. For Topshop’s big store to open in 2007, as was originally forecast, it might be difficult without advance planning, she said.
Following the H & M model, Topshop may need to establish a network of local production offices if it is to stay competitive on price and delivery turnaround, said analysts, though Spanish-based retailer Zara has proven the effectiveness of keeping much of its production in Spain.
In June, fashion trade bible Women’s Wear Daily noted that Sir Philip is close to Gilbert Harrison, chairman of the U.S. investment bank Financo, which specializes in retail.
Harrison, the publication noted, has been introducing Sir Philip to U.S. retailers and manufacturers that might help the company’s U.S. business model. Financo sponsored a luncheon with Sir Philip and a dozen top retail chief executives, including Michael Gould of Bloomingdale’s and Lew Frankfort of Coach.