Louis Vuitton’s plans could play a major role in putting Miami’s Design District on the fashion map and helping raise Aventura Mall’s luxury profile.
Louis Vuitton is ready to redesign South Florida’s luxury retail market.
Executives of the French brand known for its trademark handbags and accessories said this week they will leave the Bal Harbour Shops at the end of June and move to Aventura Mall where they will eventually more than double the size of their store. Also on the agenda: opening a second store in the burgeoning Miami Design District by 2014.
The news is a blow to the dominance of the Bal Harbour Shops, which in 1965 created the concept of luxury retail in South Florida and has consistently ranked as one of the industry’s top performing malls.
Louis Vuitton’s arrival will help Aventura Mall continue to elevate its merchandise mix. For Miami’s Design District this could be the catalyst to turn the area into a fashion destination akin to SoHo or New York City’s Meat Packing District. Expected to follow Louis Vuitton’s lead are at least some—or possibly all—of the other brands owned by parent-company Louis Vuitton Moët Hennessy that currently have stores at Bal Harbour.
The chess moves begin when Louis Vuitton’s lease at the Bal Harbour Shops expires at the end of June. Louis Vuitton then opens a temporary store at Aventura on July 1, with plans to begin construction of a two-story flagship store at Aventura to open in Fall 2012. Plans for the Design District are still being finalized.
Geoffroy Van Raemdonck, president of Louis Vuitton North America, said the brand decided it needed a bigger store in South Florida than Bal Harbour could accommodate and also did not want to be limited to one store in the market. Bal Harbour’s leases prohibit tenants from opening a second store within 20 miles unless Bal Harbour’s owners receive a percentage of the additional store revenue.
“We believe that this market deserves more than one free-standing store,” Van Raemdonck said. “We feel that we are not reaching the customers if we have only one store in the market. We want to give them multiple chances to experience the brand in its full notoriety.”
The move is particularly dramatic because Louis Vuitton was one of Bal Harbour’s oldest and most successful tenants. The brand has been there for about 30 years, when it chose the site for its first U.S. location outside of New York.
Louis Vuitton’s Miami-Dade presence beyond Bal Harbour had been limited to departments within Bloomingdale’s in Aventura and Neiman Marcus at the Village of Merrick Park. By comparison, Palm Beach County has three stores: Worth Avenue, Town Center at Boca Raton and The Gardens Mall in Palm Beach Gardens.
Industry experts view Louis Vuitton’s decision as a sign of things to come with luxury brands under pressure to grow.
“It may not be as sexy today to have Aventura on your bag as it is to have Bal Harbour,” said Arthur Weiner, principal of AWE Talisman, a Coral Gables firm that handles retail leasing and development. “In these days sexy gets put in second place. Sales and profitability get in first place. If Louis Vuitton trades a single-store strategy for a North and South location, there is no doubt that their sales would increase by three or four fold.”
On a temporary basis, the Louis Vuitton store at Aventura will be located in the former Barney’s Co-Op store. The permanent Louis Vuitton store will be more than twice the size of the existing Bal Harbour location, with a grand staircase connecting the two floors.
But even more dramatic will be Louis Vuitton’s move to the Design District, which in recent years has grown its reputation as a destination for dining and upscale home décor. Yet, despite the best efforts of developer Craig Robins, the mix of luxury fashion brands has been limited with the most noteworthy being Christian Louboutin and Marni.
“We believe that the Design District has huge potential,” Van Raemdonck said. “We feel that we can be the first large brand to go in there and we have no doubt that others will follow.”
At least some of those followers are expected to come from among the nearly dozen other LVMH brands that currently have stores at Bal Harbour, a lineup that includes Dior, Marc Jacobs, Fendi, Celine, Emilio Pucci, Thomas Pink and De Beers.
Matthew Whitman Lazenby, one of the owners of Bal Harbour, says his family was told by LVMH executives that the company plans to pull all brands out of the shops as their leases expire. But Lazenby also said they have been told by individual brands that is not the case.
The only other LVMH brand with a lease expiring this year is Dior, whose lease expires at the end of May. Dior has not renewed its lease with Bal Harbour, and the mall is taking steps to find another tenant for the space, Lazenby said.
“We don’t really know what will happen until it happens,” Lazenby said. “We’re making provisions for both sets of circumstances. There has always been a long waiting list of tenants to get into Bal Harbour. The more LVMH brands that depart, the more opportunities we create.”
LVMH executives declined requests to talk about future plans for any of its other brands in South Florida.
Bal Harbour’s owners used news of Louis Vuitton’s imminent departure earlier this month when it presented plans for expansion to the Village Council. Bal Harbour claims it had no space for Louis Vuitton to expand. Stanley Whitman, who built the 46-year-old project, told the council that if he could not expand he ran the risk of losing tenants to Aventura Mall, South Beach and other locations around South Florida.
Preliminary plans call for adding another department store to the Bal Harbour Shops, as well as 50 luxury fashion retailers, an upscale movie theater and an event space by party impresario Barton G. The plans have not been officially submitted to the Village Council for review.
The last time Miami’s luxury retail market faced a potential shakeup along this order came with the construction of the Village of Merrick Park in Coral Gables. Merrick Park’s developers sued the Bal Harbour Shops’ owners over the radius restriction clause. The case settled, and Bal Harbour Shops agreed to waive the radius restriction with respect to Merrick Park. But for retailers like Gucci and Tiffany that opened second stores in Merrick Park, the owners of Bal Harbour Shops relocated them to the mall’s second, less desirable floor when their existing leases expired.
Industry experts say that just like with Merrick Park’s opening, Bal Harbour Shops will adjust even if it means its sales numbers come down from the stratosphere. The shopping mall’s sales in 2010 were $2,013 per square foot; that’s more than five times the national average and believed to be the highest at any mall in the country.
“Bal Harbour is not going anywhere,” Weiner said. “It’s a sparkling jewel. There will be brands that come and go. The difference is that those brands will now have choices.”
But the winners in all of this are Miami-Dade’s latest real estate power couple: Dacra’s Robins and Turnberry Associates’ Jackie Soffer.
“Having Louis Vuitton validate the Design District is a great step forward for the neighborhood,” Robins said. “I’m hoping it’s the beginning of several major international fashion brands committing to join the great businesses that are already in the neighborhood.”
For Soffer it’s the next step in the evolution of Aventura Mall, which has been gradually becoming more upscale over recent years. The mall’s most recent luxury addition is Burberry, which joined a mix that includes other newer stores like Lacoste, Michael Kors, M Missoni and Facconable. But additional proof of the market demand has also come from the success that Bloomingdale’s and Nordstrom have had with luxury brands.
“There’s a pent-up demand that we know exists,” Soffer said. “We’ve proven that when we put in these better brands they are producing the sales. Our customers like brand names. That’s what sells.”
By Elaine Walker
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