On Oak Street, luxury isn’t luxe enough
By Martin Lerma
There is more luxury retail in Chicago now than ever before and just as many shoppers keeping those businesses in demand.
On Aug. 23, Oak Street in Chicago’s upscale Gold Coast neighborhood became home to a new Tom Ford flagship store. Ford, the famed designer who was once head of Gucci and Yves Saint Laurent, has been steadily growing his retail business across the globe.
The Chicago outpost of Tom Ford is only one of five stand-alone stores in the country. Ford’s gleaming boutique is the latest of several luxury brands to establish a presence on Oak Street, with several more slated to follow.
With the nation’s sluggish economic recovery, what does this trend signal about the wealth of Chicago’s economy and its status as a world-class city?
This retail expansion reveals a trend that has developed in the luxury market over the past few years that has mirrored a trend in earnings. Luxury is no longer luxurious enough and brands have been doing their best to differentiate themselves from their competitors by producing ever-more-elaborate products.
Whether they be handmade shoes or dresses woven from python skins, this merchandise only can be afforded by a small fraction of people with the funds to support such habits.
Three years ago the Esquire Theater, along with much of Oak Street, was dormant. The recession halted plans to revitalize the famed shopping strip, but a lukewarm recovery has it buzzing once again. A designer such as Tom Ford who sells $20,000 suits and equally expensive gowns might cause some to wonder who in the city can afford such wares.
Buccellati, a Milan-based jeweler who recently joined the bevy of high-end retailers on Oak Street, conducted a study to find out just how many people in the immediate and surrounding areas can afford their exclusive jewelry.
Their market study found that at least 3,000 people in Illinois and Indiana have investing assets totaling $30 million or more. While it only equals .00015 percent of Illinois and Indiana’s combined population, there are more than enough people of means to patronize Buccellati and similar businesses, according to the study’s findings.
However, the size of the clientele isn’t the only small thing. Liz Kores, the managing director of the Oak Street Council, feels that Oak Street’s scale also is key.
“Oak Street has been a kind of center for shopping for years,” Kores said. “It’s always retained that small boutique charm in a way that Michigan Avenue didn’t because Michigan Avenue got huge and Oak Street remained intimate, in a way.”
In the ‘90s and early 2000s, many luxury labels, such as Giorgio Armani, moved their locations from the serenity of Oak Street to the bustle of Michigan Avenue. They wanted larger locations, more windows for provocative advertising and, generally, to fit the ideal image of an international business while retail was booming and the demand for labels was high.
As stores like H&M and Macy’s began to take prominence along Michigan Avenue, luxury purveyors began looking for more exclusive real estate. They did not have to search far and with this came Oak Street’s resurgence.
Tom Ford is not alone in the old Esquire. Christian Louboutin and Lanvin have joined him with Carolina Herrera’s boutique expected to open in the spring, although no official date has been announced.
The Esquire Theater was once a 1,400-seat movie theater covering 35,000 square feet, nearly all of which has been transformed into dedicated retail space. With leases on the ground floors of Oak Street properties charging about $300 per square foot, these new retail developments have been a serious boost to the real estate market on the Gold Coast.
Julie Saunders, the director of marketing and PR at Saks Fifth Avenue’s Chicago location, views retailers and customers in Chicago as a community that has become more prosperous over the past few years.
“We know our clients are always in the know and watching the fashion trends coming from New York, Paris, and Milan…and expect the latest trends in fashion,” Saunders said. “The growth in luxury on Oak and Rush Streets helps support the other luxury retailers in the city.”
Though many people in the Untied States continue to struggle economically, the items for sale at these new businesses are usually procured by people who were affected little by the recession of 2008. With the sales tax in Chicago hovering over nine percent, even a slow business day could produce significant revenue for the city. That one $20,000 suit can generate more than $1,800 in sales tax.
“There’s a luxury client in Chicago,” Kores said. “There’s a time they would have flown to New York to do their shopping. They don’t need to do that anymore. They can shop here in their backyard and I think they like that.”
- written by mlerma on November 9th, 2013
- posted in Writing for the Web