While D.C.’s downtown has struggled to bring workers and businesses back after the pandemic, higher-end retailers are having a moment.
Downtown D.C. foot traffic is at 70 percent of the busier pre-pandemic era, according to local officials, with office occupancy hovering near 50 percent, according to data from Kastle Systems, which tracks office card swipes. As of the first quarter of 2023, broader economic activity was only at about 65 percent of levels predating the pandemic, according to a DowntownDC Business Improvement District (BID) report released last summer. And crime downtown, which has fallen since the beginning of the year, is still higher than many business owners would like.
Despite downtown’s challenges, nine new high-end boutiques have opened from April 2020 to October 2023, according to the BID’s retail data.
High-end retailers say they’ve managed to survive the drop in foot traffic by finding new ways to appeal to customers. Ida’s Idea, a women’s boutique shop near the White House, started hosting Facebook Live fashion shows every Thursday when the shop first closed during the pandemic, said owner Ida Polite. The fashion shows have continued, and Polite sends recordings to clients.
“One thing about retail is that you have to consistently be creative,” said Polite, whose shop has been operating for more than 30 years. “After these shows, our sales began to somewhat increase,” she added.
Some of the new high-end activity downtown may see an increase in coming months thanks to evolving downtown investments. In May 2023, Mayor Muriel E. Bowser’s office awarded a $200,000 grant to the BID for the creation of the Downtown Action Plan, which will support future investments in the area.
To lure businesses, Gerren Price, the BID’s president and CEO, said the BID works in tandem with locations such as CityCenterDC, for example, to ensure incoming businesses have resources needed to thrive and participate in the downtown community. Price said that while CityCenterDC does its own retail attraction and leasing work, the BID assists with promoting and marketing some of its events.
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“A key part of reimagining our downtown core is amplifying and promoting the diverse retailers that currently exist, being strategic and intentional in attracting new retail options, and helping to shape a unique experience that is easy and fun for people to access,” Price said. “This gives people a reason to keep coming back downtown.”
What’s happening in D.C. mirrors a national trend, as high-end luxury retail has picked up strength. Sonia Lapinsky, head of the fashion practice at AlixPartners, said that the total luxury sector has grown 9.6 percent since 2019, overcoming a 2020 dip. Luxury retail bounced back quickly because consumers with disposable income were more eager to spend, Lapinsky said.
“Luxury managed to tread better because that higher-end consumer is not impacted by inflation, at least not immediately,” Lapinsky said. “They’re still going to have that in-store experience, but they’ve now been trained to shop online as well.”
Lapinsky said that in the downtown D.C. area specifically, there has been a resurgence of new high-end locations opening to fill formerly vacant spots, with Giorgio Armani (2021), Chanel (2021) and Christian Louboutin (2023) in particular opening at CityCenterDC, a newly redeveloped area that’s bordered by Ninth and 10th streets and New York Avenue and H Street.
“In luxury, the importance of location is greater than in other sectors,” Lapinsky said. “If consumers are going to make their way into a CityCenterDC, for example, they’re likely going to go to more than one store and proximity is absolutely important.”
Scanlan Theodore, an Australian womenswear brand, opened a CityCenterDC location last year. Melinda Robertson, CEO of Scanlan Theodore Americas, said shoppers visit mostly during the lunch hour.
“I think women are just excited to pop down, have a shop and head back to work,” said Robertson, who said retailers should maintain online channels. “It should always be a contributing channel to your bottom line. I think a lot of brands have strengthened their online offerings if we went back to solely online shopping.”
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Timothy Lowery, CityCenterDC’s general manager, said that having luxury stores near one another is the “secret sauce.” Since the center opened, its shops have had record sales each year except 2020, he said, thanks to buyers’ ability to browse multiple stores nearby during a visit.
“The most important thing to retailers is cotenancy. ‘Who is next door to me? Who is across from me?’” Lowery said. “Cotenancy, it creates a dynamic where foot traffic is realized by all retailers.”
Lowery added that he hasn’t seen a shift in buying patterns and that when doors reopened after pandemic shutdowns, people were “lining up to get into our stores.”
Franklin Samuels, owner of the Gentlemen’s Closet, took a chance when he opened a location in Mount Vernon Square in May 2023, but so far he says it’s worth it.
“Customers who follow our site know that we have a new location in D.C., and that’s helped us move in the right direction,” Samuels said.
Most customers who stop by purchase small items such as belts and neckties, while others purchase suits for events such as weddings, he said. “The wedding business is recession-proof. No matter what happens to the economy, special events will continue,” Samuels said.
Not every boutique has succeeded. The Peruvian Connection, near Metro Center, permanently closed last month even though it had returned to pre-pandemic levels of foot traffic.
“It’s important for us to have stores around. It’s a shame when some close, because they bring traffic for us,” manager Laleh Pirnia said in an interview before the store shut down.
Gladys Baxley shopped at Peruvian Connection for years and found herself eyeing a colorful Glenda Bailey sweater that she had recently purchased.
“You don’t see things like this in other places,” said Baxley, 80. “I know when I get a sweater, it’s high quality.”
Baxley does visit other stores, but she came Peruvian Connection to buy gifts for others. Baxley loved the store’s atmosphere and wore a sweater from the shop during her visit. Her closet is full of items from the shop, she said.
“When I see an item in their catalogue that I like, I come here to see it and leave with something that I love,” Baxley said. “I see things here that are me. I don’t go anywhere else for winter clothes.”
Some longtime boutiques in other parts of downtown are seeing sales that exceed pre-pandemic levels, said Matthew Rosenheim of the Tiny Jewel Box on Connecticut Avenue.
The shop lost 95 percent of its revenue when it closed in 2020 because it focuses on in-person purchases, and the possibility of closing the Tiny Jewel Box jewelry store forever was a “constant worry,” he said.
“It was strange to see this traffic increase when it would normally slow down,” Rosenheim said. “It seemed like people working at home needed a break, so they decided to do their errands at the end of the day.”
While Rosenheim was on a flight to Florida in February, his shop was robbed in a smash-and-grab that made the news. Nobody was hurt.
Rosenheim said the store has since beefed up its security presence. Despite this incident, he said that he is still upbeat and optimistic about the store’s prospects because luxury retail sales downtown remain strong.
“In the moment, it’s been a little challenging, but we’re a resilient family business that’s been in Washington for almost 100 years,” Rosenheim said. “This is my family’s legacy, and I’m prepared to see it through. The things that make Washington special to people are still here.”
Source link: https://www.washingtonpost.com/dc-md-va/2024/04/05/dc-downtown-businesses-post-pandemic/