The Three Fs in Retail Today

by Scott Reid

By Faith Hope Consolo, Douglas Elliman Real Estate

Those of us who attended school prior to the rise of the iPad remember the three Rs of learning — reading, writing and ‘rithmetic. For retail today, however, trends are all about the three Fs: Fitness, Fashion and Food!

Even though shopping for commodities such as books, music and electronics continues to move online, shoppers still crave socialization, whether that’s working out in the latest fitness trend, getting opinions on a potential apparel or footwear purchase, and dining out. Wise urban landlords and shopping center managers are answering those needs by leasing to a variety of tenants that satisfy at least one of those needs. And many new tenants are accommodating at least two.

Whether the location is a suburban shopping center or urban Main Street, landlords are finding increasingly that combining tenants focused on health and fitness, apparel and dining creates a synergy that attracts more shoppers, more often for longer periods of time.

Large fitness facilities are taking vacant anchors and big box stores around the country — LA Fitness, Planet Fitness, Blink (Equinox’s more affordable division), YouFit and Retro Fitness have been expanding rapidly. But even more recently we’re seeing a rise in boutique studios that focus on specific workouts. Indoor cycling is featured at SoulCycle, Flywheel and the Peloton stores that sell the cycle and a package of online classes that allow the family to exercise at home. If reports that SoulCycle is considering an IPO are true, expect a huge expansion of that chain. More on the toning side are Pure Barre, YogaWorks, FlyBarre and CorePower Yoga, with expansion fueled by an influx of private equity investors.

It’s no coincidence then that some of the fastest-growing retail chains focus on athletic wear.  Lululemon athletica has grown from one store in Vancouver, British Columbia, in 1998 to an international chain by offering apparel that is appropriate for yoga and other activities, yet stylish enough to wear for casual activities. That company’s growth is being matched by new chains including Athleta (from Gap), Bandier, Lole and Under Armour, among others.

Even major high fashion designers such as Cynthia Rowley are creating fitness lines. The line, Rowley, will officially launch in the fall, joining other names including Rebecca Minkoff and Ramy Brook that already have done so. It’s not inconceivable that any of these could become standalone stores if they succeed.

Not all retail growth is fitness-focused. Teenagers and young adults are still shopping, but looking for value at chains such as Five Below (aimed at tweens and teens), which sells products that cost less than $5. The chain seems to be entering new markets almost daily. Young adults are visiting the growing Brandy Melville chain, which features casual clothing that clearly appeals to the most fit women – sizes here are invariably small.

Meanwhile, everyone must be working up an appetite, because we’re also seeing ever more dining options opening, particularly focused on healthier eating. Juice bars such as Juice Press, Liquiteria, Juice Generation, Organic Avenue and more all have major expansion plans around New York City, and often locate near or adjacent to fitness facilities. And quick-service dining entrances opening around the country include such names as LYFE Kitchen (for Love Your Food Everyday) which focuses on fresh local ingredients, sustainability and giving back to the community. Shake Shack, of course, will accelerate its growth after going public. On the fast-food side, Potatopia is growing around the metro New York area, offering various sauces to accompany its different potato dishes.

Don’t think that the traditional meat and potatoes are being neglected. Texas Roadhouse has been expanding steadily, and has plans for some 700 to 800 restaurants in the United States and internationally.

Even fashion names are getting into the act, adding dining as part of the shopping experience. Long part of the department store experience, food is now being added to designer boutiques. Polo Ralph Lauren’s Polo Bar, with its traditional menu and classic cocktails, is the latest to do so in New York City, which also boasts dining from Tommy Bahama and Giorgio Armani. 

Clearly, the combination of fitness, fashion and food are an unbeatable combination for brick-and-mortar locations, providing much-needed activity on city streets and suburban shopping centers from morning till night, with activities many people want to do together.

Faith Hope Consolo is chairman of the retail sales, leasing and marketing division at Douglas Elliman Real Estate in New York City.

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