Gucci extends hold on SoHo store – Crain’s New York Business

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Gucci is planning to extend its hold on a large concept store it recently opened in SoHo, a source said.

Late last year, the fashion brand signed a short term deal to create its first retail location in the neighborhood at 375 West Broadway.

The brand, owned by the luxury holding company Kering, opened the Gucci Wooster store earlier this year, unveiling a 10,000 square foot showroom that stretches from West Broadway to Wooster Street that serves as a home not only for clothes and apparel, but also events, performances and multimedia.

The space is Gucci’s answer to the malaise that has settled over brick and mortar retail, drawing in shoppers by offering the experience of special installations and exclusive merchandise. Last month, the outlet opened a library with a curated collection of art and fashion books.

But like many tenants who have become cautious as brick and mortar stores have lost marketshare to online retail, Gucci committed to the space only for a short term with the option to extend its lease. Buffeted by vacancies, landlords have become increasingly willing to grant retailers such flexible terms, which allow stores to exit a space if it is not performing rather than remain on the hook for the lengthier lease periods that landlords used to insist upon.

The source said Gucci’s decision to extend its lease could keep it at the West Broadway location for a decade or more. Spokeswomen at Gucci and Kering did not respond to a request for comment.

“The Gucci brand is on fire and that store has been viewed as a tremendous success,” said Richard Hoddos, a retail broker at CBRE who was not involved in Gucci’s SoHo deal.

The extension of the lease is the second recent bright spot in a SoHo retail market where rents have retreated and vacancy rates have increased. The outdoor fashion brand Woolrich, just reached a deal to more than double its size on Wooster Street to almost 8,000 square feet. The brand is doing that by moving to a larger space next to its current location and a sister brand, Goldwin, may open in the smaller store it leaves behind.

According to data from the real estate firm Cushman & Wakefield, SoHo asking rents on average were $417 per square foot in the third quarter, down 11.7% from a year ago. Availability, a measure of current and expected vacancies, was 23.9% in the neighborhood, up by 0.6% from a year ago.