Fashion Briefing: SoHo and Madison Avenue are oversaturated. Here are the next NYC retail destinations to know

July 11, 2024 Mary

This week, we take a look at some of the up-and-coming shopping neighborhoods in New York City.

At the end of last year, SoHo was by far the hottest retail destination in New York City. In the third quarter of 2023, the neighborhood had more than double the number of store openings than the next most popular destination, Grand Central — and it remains the place where many fashion brands are investing their retail dollars.

But all that interest has also made SoHo one of the most expensive places in the city to open a store. When Sasha Chou, founder of the independent beauty and personal care brand Mumu Bath, was looking to open her first store, she found leases in SoHo to be in excess of $14,000 per month. She faced similar prices in other hot retail areas like Nolita.

But what areas in New York City will offer a brand value without breaking the bank? Glossy spoke to several experts on the city’s retail industry to find out what neighborhoods brands and realtors consider the next big shopping destination.

For her part, Chou ultimately settled in Dumbo, Brooklyn around six weeks ago. The lease price was much more favorable, she said, though didn’t share the investment. She opened alongside two other first-time store owners, and the Dumbo Improvement District offered to put Mumu Bath in the next version of the neighborhood’s online and print map of notable shopping destinations. The DID also offers Dumbo residents a VIP Card granting special offers for local businesses, as chosen by the businesses. Chou said she’s been offering 10% discounts to anyone with a card to encourage more Dumbo residents to come into the store.

“It spoke to me immediately,” Chou said of Dumbo. “It’s more locals than tourists, which is what I wanted in a location. And the community in the neighborhood is so nice.”

Brooklyn, in general, is having a bit of a retail renaissance, according to Madison Sutton, a realtor who’s known as @thenycagent to her 38,000 followers on Instagram and 100,000 followers on TikTok. Sutton and her team at her agency, Serhant, collectively have more than $250 million in commercial real estate listings in New York City.

“Williamsburg, in particular, is shedding its hipster image and emerging as a luxury market for both residential and retail,” Sutton said. “It’s being dubbed the New SoHo, with brands like Chanel and Hermès setting up shop. The transformation is so dramatic that the recent wave of DTC stores like Glossier and Warby Parker might soon seem charmingly quaint in comparison. It’s less ‘artisanal shop’ and more ‘artisanal wine bar’ these days.”

Retail rent across Brooklyn is typically under $100 per square foot, much lower than the average price in Manhattan: more than $600 per square foot. The Real Estate Board of New York said in a March report about the state of Brooklyn retail that the borough offers “many options for reasonably priced space ($50 to $100 per square foot) just a few blocks off of prime, high-traffic corridors.”

Outside of Williamsburg, there is interest in another part of Brooklyn: Greenpoint. In the last six months, major brands like Nike and Lee have held pop-ups and events in Greenpoint, while up-and-coming brands like jewelry brand Ana Luisa have opened permanent stores.

“Greenpoint, while still holding onto its ‘up-and-coming’ status, is carving out a niche for boutique stores and specialized restaurants,” Sutton said. “It’s also flirting with a nightlife scene, with heavyweights like [nightclub owner] TAO Group eyeing the area. The Huron building [a luxury residential building opened in late 2023] and other luxury developments are attracting a clientele with a taste for the finer things, leading to a near-daily emergence of specialized retail pop-ups.”

But Manhattan isn’t without its own up-and-coming neighborhoods.

“The Lower East Side is seeing some traction with local, international and streetwear brands, with new arrival Kotn from Canada and as The Vintage Twin,” said Rebecca Fitts, svp of business strategy at Alvarez & Marsal Property Solutions. “Early adopters also include Suzie Condi, Sandy Liang and OG Kallimeyer.”

She added, “Also worth mentioning are the Upper East Side [beyond Madison Avenue], Tribeca and Murray Hill, all of which are having slower comebacks from Covid but have strong pockets for retailers with some brand awareness and who can sustain having a destination or neighborhood store with qualified consumers and foot traffic.”

Adding to the list, Sutton called out the Seaport district of Manhattan, which she said has been revived by the opening of the Tin Building, a buzzy marketplace full of high-end restaurants, at the end of 2022.

“With the Seaport area’s abundance of commercial space, I predict we’ll see it bloom into a retail hotspot,” she said.

Stat of the week

30 stores.

That’s how many eight-year-old footwear brand Rothy’s will have by the end of the year, according to Giovanni Lepori, the brand’s vp of global retail development.

“Some people don’t even realize we have stores, so maybe we need to do a better job advertising them,” he said. Rothy’s currently has 27 stores.

Lepori, who worked in luxury, including at LVMH, before joining Rothy’s in 2018, said around 50% of customers who go into a Rothy’s store are first-time shoppers, making brick-and-mortar retail a crucial part of the brand’s customer acquisition strategy.

Later this year, Rothy’s will also open its first international retail presence via a pop-up, he said.