Luxury shopping returns to downtown D.C. Is Washington ready to buy?

June 5

A lawyer leaves a deposition and pops into Tumi for new carry-on luggage ($680). A tourist ducks out of the rain and treats herself to a classic trench coat from Burberry ($1,695). Two conventioneers skip the plenary session for a couple hours of power shopping: a flirty dress at Kate Spade ($448), a cashmere sweater from Zadig & Voltaire ($535), maybe a leather Le Pliage tote from Longchamp ($555).

At least, that’s the theory behind CityCenter: The developers of the multimillion dollar complex in Penn Quarter created a mix of residential, commercial and retail spaces designed for urban professionals with expensive tastes — and incomes to match.

It’s a blast from our past: Washington started with its best stores in the heart of the city, small shops that grew into the grand emporiums of the 20th century. Stylish shoppers of a certain age remember trips to Garfinckel’s or Woodies for special outfits or Christmas displays. Then came those upscale suburban malls, and pretty soon the only stores left downtown sold power suits, sensible shoes and boring ties.

Now retailers are betting a new generation is ready for luxury shopping downtown. But instead of a fancy department store, CityCenter will feature 40 individual boutiques and restaurants. Tumi, Allen Edmonds and Kate Spade have opened; Longchamp, Burberry, Hugo Boss, Hermes, Paul Stuart and Ferragamo are among the brands slated to join them in the next year.

They’ve built it. Will we come? And, more to the point, will we buy?

A retail mecca

The folks at Hines, the Texas developer behind several mixed-use projects around the globe, think they’ve erected a retail mecca that will revitalize shopping in the heart of the city. CityCenter came together after the 20-year-old convention center at 11th Street and New York Avenue NW was razed in 2004. Suddenly, two adjacent blocks of downtown were available at once — something extremely rare in a major city.

And the timing was right to do something big: White-collar businesses migrating east of 15th Street NW, young professionals and empty-nesters moving to the city, a constant influx of business travelers and more than 12 million tourists a year. Throw in a new convention center specifically designed for professional organizations (doctors, lawyers and high-tech industries) and you’ve got an enviable number of potential customers for nearby stores and restaurants.

CityCenter has tons of office space, hundreds of high-end condos and apartments and space for about three dozen retailers. Developers wanted the stores to be at street-level — not in an indoor mall — facing out on busy sidewalks. And they couldn’t be just any stores: They wanted exclusive brands with little or no presence in the region, the kind of boutiques where sophisticated customers drop hundreds on a designer T-shirt or purse. Think Washington’s miniature version of Madison Avenue or Rodeo Drive.

“We really thought that this was the one opportunity for downtown to have a critical mass of fashion and specialty,” says Hines managing director Howard Riker. In other words: No drugstores, no discounters, no trendy teen hangouts, no tacky. (He wouldn’t comment on which brands were approached or who got away: Real estate brokers say Tiffany and Prada passed and a deal with Apple fell through.)

Longchamp, the French luxury handbag retailer, will open its first Washington store this summer as part of the family-owned business’s expansion from high-end department stores to boutiques in 70 countries.

Stephanie Disegni, president for U.S. operations, says Washington was on her list — if and when she found the right location. The problem with most commercial spaces is that they’re owned by individual landlords, so retailers have little control over neighboring stores. Disegni looked in Georgetown, “but we didn’t like the adjacencies.” She finally said yes when she was approached by CityCenter, where Longchamp will be surrounded by other luxury companies, most of which have signed 10-year leases.

“They’ve been incredibly careful,” she says. The upscale vibe, along with international tourists who know the Longchamp name and the convention center nearby made it a “good mix for our brand.”

Ditto for Paul Stuart, which sells classic men’s and women’s clothing. The company has one store in New York and two in Chicago. The new Washington location opening next year will be the fourth store since the company was founded in 1938.

Why D.C.? Why now? “Believe me, we get a lot of calls from real estate people,” president Michael Ostrove says. He was attracted by the concept of the project — especially the fact that it’s not a typical mall setting — and the downtown location. “We just thought there will be a great awakening of this area.”

The return downtown

The best stores in Washington started downtown: Woodward & Lothrop, Hecht’s and the famed Garfinckel’s, which opened in 1905 and reigned as the most stylish place to shop in the nation’s capital. Kings, movie stars and first ladies including Jackie Kennedy showed up at the flagship store at 14th and F streets.

Then came the suburban malls and fewer reasons to go into the city to shop. But the real end of downtown retail came from the 1968 riots, which burned out hundreds of stores, and the development of the Metro system in the 1970s, which turned the streets into a construction zone.

“It really ended good business in downtown,” says Peter Marx, president of designer retailer Saks Jandel. His great-grandfather founded the luxury women’s clothing store in 1888; the family relocated the boutique from 12th Street to Friendship Heights more than 50 years ago and operated a satellite location in the Watergate for two decades.

After years of declining sales, Garfinckel’s closed in 1990 and was replaced by a Borders bookstore (and now the Hamilton restaurant). Woodies closed in 1995; the 11th and G streets headquarters sat empty for eight years after a failed attempt by the Washington Opera to convert it into an opera house. The ailing Hecht’s a block away was bought out in 2006 and turned into a Macy’s.

In 1999, developer Doug Jemal bought the Woodies building and put in low-cost, high-fashion retailer H&M, furniture store West Elm and, later, trend-purveyor Forever 21, all popular with a 20-something target audience.

“The Y generation likes cities,” he says. “I think there’s a place for high-end retail. I’m not that guy. I’m a J.C. Penney customer.” When he received a lifetime achievement award from the city last month for redeveloping downtown, Jemal proudly says he wore a $1.99 vest he found on a Penney’s sale rack. “I looked damn good.”

But CityCenter is banking on customers who like the finer things in life and are willing to pay for them, especially if they’re within walking distance.

“D.C. is a Tier One market,” explains retail expert David Dochter of Cushman & Wakefield, who represents retailers coming into CityCenter. The evolution from a town dominated by federal workers to a vibrant private-sector economy has attracted companies that never looked at D.C. before: Over the past decade, the combination of wealth in the area (Washington is surrounded by five of the richest counties in the United States) and re-urbanization made downtown one of the most attractive draws for brands looking to expand outside of New York, Los Angeles and Chicago.

CityCenter, he says, has a big advantage over other luxury developments in the region. Friendship Heights, including the designer boutiques in the Collection at Chevy Chase, has plenty of affluent residents but not many professionals working in the neighborhood. Tysons Galleria and the nearby Shops at Fairfax Square are destinations, requiring cars and time for a shopping trip.

Someone at CityCenter, on the other hand, might not be shopping at all — until they are. “You may be down there for a completely different reason,” says Dochter. With no advance planning, people going to a business meeting, convention hotel, dinner, home or a nearby concert or game can step into a store and walk out with something fabulous.

“I think it’s very exciting,” says Marx. “It’s great for the city and great for retail.” That being said, Jemal and Marx aren’t putting any skin in the luxury game yet: Jemal is sticking with more affordable stores; Marx says he has no plans to open a branch downtown anytime soon.

Will Washingtonians accustomed to malls switch to downtown stores? Will enough conventioneers, lunch-break browsers and tourists whip out their credit cards?

In theory, yes. “People are feeling good and spending money,” says Jemal. “I believe in the Bugsy Siegel theory: If you build it, they will come.”

But will they ante up the big bucks? That’s the multimillion dollar wager.

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