The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — For years, London's Bond Street and Sloane Street have been the destinations of choice for luxury brands looking to set up shop in the British capital to serve the wealthy Arabs, Russians, Indians and Asians who call the city home, and more recently, the hundreds of thousands of luxury shoppers that have been descending on London, bolstered by a weaker pound and the depth of riches on offer from every luxury brand imaginable.
But a stone's throw away on Mount Street, a former backwater of gentlemen's collector shops and art galleries, a remarkable transformation has been taking place that is giving Bond Street a run for London's luxury retail supremacy. Following last year's multi-million pound privately-funded street restoration by Grosvenor, taking a walk down the newly-restored Mount Street is not only visually and aesthetically inspiring, it's also a testament to the confidence in the ongoing luxury growth wave that paused for only a short while after the economic crisis of 2008.
The list of new brands that have arrived is staggering. Christian Louboutin, Lanvin, Azzaro, Goyard, CH Carolina Herrera, Stephen Webster, Aesop, Wunderkind, Balenciaga and Rick Owens are amongst those who have moved into the Mount Street area in recent years, creating a luxury land-grab unlike anything seen in any major fashion capital around the w0rld. In the last few weeks alone, both Mackintosh and Nicholas Kirkwood have officially opened their shops on Mount Street, with further openings expected soon, including LVMH-owned Loewe's first London outpost and Roland Mouret, around the corner on Carlos Place.
Certainly, Bond Street has had a remarkable resurgence of its own — welcoming the sparkling new Louis Vuitton Maison, the first London Tory Burch flagship and an expanded Miu Miu store — but many luxury brands big and small have chosen to set up shop on Mount Street instead, largely because it offers a refined experience better suited to the desires of consumers who want to come to shop discreetly, and then enjoy a drink or a meal, while their chauffeur-driven cars wait patiently to whisk them away; a real luxury experience.
It all began with Marc Jacobs, whose first London store was opened on Mount Street in 2007 in an old antique shop, setting off a frenzy of activity in the neighbourhood that has continued unabated ever since. "Six years ago, Mount Street did not have one single fashion brand," recalls Alexis Mourot, group chief operating officer of Christian Louboutin, who at the time was part of the team setting up shop for Marc Jacobs in London and more recently, spearheaded the effort to bring Mr. Louboutin's legendary red-soled heels to Mount Street.
Of course, Mr. Jacobs is famous for breathing retail life into Bleecker Street in New York and the Palais Royal in Paris, but even these transformations pale in comparison to the gleaming storefronts that are now catering to the every whim of luxury consumers on Mount Street.
So apart from Mr. Jacobs' uncannily successful real-estate track record, what is it about Mount Street that has convinced so many brands to take the plunge?
The lower cost of real estate has certainly played a part. Although rents in Mount Street have almost quadrupled, from £85 per square foot per year a few years ago to £325 per square foot per year today, they are still much more affordable than rents on Bond Street, which have skyrocketed, making it the most expensive retail real estate in Europe at over £925 per square foot per year for the best space. This is up almost 20 percent in the year up to September 2010, according to Cushman & Wakefield, a real-estate and property firm.
For luxury brands, the fixed cost of expensive retail is often a huge cost-sink, and especially so for smaller brands who don't have the positive cash flow from other longstanding stores to help finance the upfront cost of setting up a store and servicing the rent that has to be paid, even when consumers aren't buying.
But most luxury executives I spoke to insisted that cheaper rent, if anything, was only a minor consideration for choosing Mount Street. "Not at all," says shoe designer Christian Louboutin. "It is just because it is such a beautiful street."
Nicholas Kirkwood, thought by many to be at the very beginnings of the next great luxury shoe business after Mr. Louboutin, agrees. "I never considered Bond Street or Sloane Street, and it wasn't due to the rents, but rather because I felt that the historical charm and beauty of Mount Street made sense to me for the luxury experience that I want to have for my first shop."
There were other more practical considerations as well. "In order to make a significant impact on these streets we felt we would need to invest in a much larger store than we actually require for the size of our collections," explains Gary Bott, brand manager for Mackintosh. "Mount Street lends itself well to our size as many of the properties are Georgian buildings that perfectly suit our retail concept."
Louboutin's Alexis Mourot echoes that sentiment. "Mount Street offers much more power in terms of visual presentation. We have a great window and we use it to have a little bit of fun," he says.
Nicholas Kirkwood also found the space to be well-suited for this purpose. "The corner location, unusual for a for a shoe store, has 7 large arched windows that stretch across the entire facade of both Mount Street and the adjoining Carpenter Street," he explains, adding that his new space also houses his design studio, enabling him to stay connected to the retail consumer, even as he designs his next collections.
But apart from the beautiful architecture and well-proportioned space on offer, the biggest draw seems to have been the balance of retail with restaurants and other luxury businesses that have helped to create an authentic luxury experience, and a real feeling of community.
"At Aesop we select our retail locations around existing and forward potential and with a weighting toward complementary brands," says Dennis Paphitis, the highly-respected founder of the Australian luxury skincare brand. "But the gin and tonics at The Connaught were also part of the equation and similarly the offerings across the road at Scotts. A unique and great retail offer outside of fashion works well for us."
Indeed, over and over again, executives used the words "luxury community" to describe the convivial commercial spirit of Mount Street. "We try to be part of the community," says Mr. Mourot. "We work together with the other brands as a team because we recognise that our customers go from one store to another. We're like a small family."
This is not just PR talk. Mount Street boasts an official association of retailers, who meet regularly to discuss common issues and make plans for the future, much like those in a residential neighbourhood. So, rather than think of themselves as cut-throat competitors, building ever bigger, brighter and blingier stores, the retailers, restaurateurs and hoteliers who have set up on Mount Street recognise that together they can create the kind of rarefied luxury experience that has been lost in other luxury destination streets.
"As the major retail streets today can look more and more similar, this one has a charm and character all of its own. We appreciate the rare combination of international businesses mixed side by side with others that are truly local. This you can't find everywhere," explains Caroline Brown, chief executive of Carolina Herrera.
But how are the businesses performing? Beautiful architecture and community alone do not a retail business make. At the end of the day, successful retail is about bringing consumers into the store and making those cash registers ring. "For us, it is performing very, very well," reports Mr. Mourot. "We are continuing to experience strong double digit growth each year, but then again, this also reflects the general strength of the Christian Louboutin brand."
"Business is reaching our expectation on this location and is growing each month," says Ms. Brown of Carolina Herrera. "Especially strong sales from the start were the women's handbag and apparel collection which is consistent with our expectations for a city like London."
But the recent street restoration works did not come without some pain for some residents like Aesop who have been on Mount Street since 2008, a few more years than most. "We're relieved that the disruptive roadworks in Mount Street have now come to a close and foot traffic has returned to the expected levels," admits Mr. Paphitis.
Looking ahead, with the extensive roadworks completed, a multi-million pound water fountain installation by Tadao Ando to open just outside the Connaught Hotel, and the rumoured announcement of the arrival on Mount Street of one of the world's hottest fashion brands as well as an iconic American fashion brand, things are only looking up for this once sleepy Mayfair neighbourhood.
The only problem now, it seems, is finding space to welcome more brands. By the sounds of it, none of the current occupants are going anywhere soon.
Imran Amed is founder and editor-in-chief of The Business of Fashion