Porto Meets Bleecker Street

By Paco Underhill, CEO & Founder, Envirosell

The west end of New York’s Bleecker Street is awash in vacancy signs. Just three years ago, it was the hottest retail real estate in the city. Small storefronts in elegant late 19th-century buildings attracted high-end designer brands from around the world willing to pay major league rents. There were four Marc Jacobs stores within 600 ft., now gone. Ralph Lauren, Mulberry and Brooks Brothers have all come and gone. The Christofle store, Club Monaco and Burberry remain, but the burnish to that end of Bleecker has disappeared thanks to so-so sales, looky-loos and changing times.

The brands were focused on the tourist traffic attracted to the “Sex and the City” steps and the ogling of aspirational housing. Where else can you get close to homes with eight-figure price points? For residents, the presence of a NARS cosmetic store around the corner did not fulfill a pressing need. When the luxury retail invasion started 10 years ago, neighborhood residents mourned the passing of local convenience stores, small Chinese take-outs and Latin bodegas, much less the laundromats that morphed into Kate Spades. Now, those same residents are looking at empty windows and for-rent notices.

Across North America and Europe, we have charming, often-historic districts with small shops living under residential spaces. What happens to those spaces? Ownership of those buildings tends to be local. Historically, the people who lived above the store made up a percentage of customers. While districts evolved into centers of gravity where the density of like merchants and services created enough of a pull to draw customers from the broader community or, in some cases, national audiences, the original premise is neighborhood businesses are servicing neighbors with goods and services they need.

No one can look at Walmart or Kroger and accuse them of killing downtown retail. Our access to basic commodities has been redefined over the past hundred years. Small retail is not where we buy laundry soap or kitty litter. Even in downtown Bentonville, Ark., where Walton’s Five and Dime has been carefully archived, the near-term answer has been arty and crafty, whether goods or nourishment. In small- and medium-sized cities, the nascent reinvention of small storefronts has been to get local. For those building owners, finding anyone willing to pay rent is a blessing. Visit Brooklyn’s Fort Greene and Williamsburg, and you see street art and artisanal standalone shops and restaurants. For every 30 independent shops, only one is national retail.

One of the terms tossed around in contemporary retail real estate has been “placemarking.” The idea was that a merchant or marketers pulled money out of print and broadcast media and invested in a physical asset. The space operated without the same constraints of profit and loss of a restaurant or shop, but served as a brand statement or brand inoculator. The problem is that placemarkers tend to get stale (as Marc Jacobs may have discovered) if their leases are years, not weeks or months. In Times Square in New York, Oxford Street in London, Via Monte Napoleone in Milan, placemarking works; in mainstream downtowns, however, it is misapplied.

Small retail services, from banks and real estate offices to hair salons, may still be part of the mix, but no one would cast them as traffic-drivers. I spent an evening with the progressive mayor of Porto, Portugal, and kicked around the small-shop retail problem. Through the 1940s, when Porto was a port, the inner city was occupied by all the various classes that made the port work, from customs brokers to sailors. Some of the ground-floor and first-story spaces were offices; the dynamics of working and living were intertwined. Someone could live and work and leave their respective section of the city only on special occasions.

Today on Bleecker Street, like many parts of Porto, the traffic is tourists. Many are willing to step into quaint shops, but are reluctant to buy anything they have to carry. How many art galleries and souvenir shops can you support, and what kind of rent can they afford? We had several suggestions: tax abatements to small landlords for service-related business; syndicated delivery services, meaning if you see and buy something you like, it can be delivered to your hotel; and store locations designed for pop-ups and seasonal promotional activities.

The term we coined was “Aero-Porto,” the migration from city spaces driven by access to the sea to ones with active runways. Pun intended.



Photo by Paco Underhill


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