Celebs Shifting From Social Media to Physical Retail

Celebrities are translating their brands’ e-commerce success to deals for physical retail spaces.

Stores for brands connected to big names account for more than 300,000 square feet of retail space nationally, according to JLL data reported by the Commercial Observer.

The biggest beneficiaries of celebrities’ hug of physical retail are owners of malls. The property type is the most likely spot for celebrities to set up shop, accounting for 76 percent of the store type.

While celebrity retail is nothing new, more stars are embracing physical stores after brushing against the limits of selling through the Internet and social media, a lesson traditional retail brands are also learning.

Among the power players in the celebrity retail space are Diddy and Kim Kardashian. The latter has an especially popular brand in apparel company Skims, which recently opened a pop-up location at Manhattan’s Rockefeller Center.

The beauty sector, however, is where celebrities reign supreme. Prestige beauty sales hit $6.6 billion in the first quarter, according to Circana. Stars moving in that space include Kylie Jenner with Kylie Cosmetics — recently valued in an equity deal at $1.2 billion — and Rihanna with Fenty Beauty.

Last year, Rihanna’s Savage x Fenty lingerie brand signed a 10-year lease for a three-story building in Park Slope, a stone’s throw away from the Barclays Center.

It’s not only celebrities who are pumping up the retail sector. Across the country, asking rents are rising and available space is at an 18-year low as retail defies some of the red flags tearing down other commercial real estate sectors, such as the office market.

As celebrity retailers give, however, they can take away just as quickly, warned JLL executive Richard Hodos.

“These things have a life cycle,” Hodos told the Observer. “Does it mean it will continue to be successful over the course of a 15-year lease? Customer acquisition costs for digitally native brands are extraordinarily high.”

— Holden Walter-Warner