As footwear stores across the U.S. continue to close, one business, Charleston Shoe Co., appears to be bucking the trend. The South Carolina-based footwear brand is expected to open its sixth outpost in two months by the end of April, upping its store count to 25.
To expand into new markets, Neely Woodson Powell, CEO and founder of Charleston Shoe Co., said her team searched for markets with high foot-traffic among its target consumer group. The result: a major statement in Manhattan and the Greater New York area with three stores opening at once.
“In New York, no one knows yet who Charleston Shoe Co. is. But now they’re going to start seeing it in multiple places and that’s going to reinforce the brand and the product,” said Joseph Aquino, president of JAACRES and the real estate broker who worked on the deals. “This is the model that I always try to encourage retailers to do but not all of them are that fearless.”
Rents in the New York area have been falling, and that’s led to an upswing in retail lease agreements. Nevertheless, this real estate approach seems to counter industry norms. There is considerable risk when simultaneously launching multiple locations in an untested market, particularly for a smaller company. A more traditional strategy would be to open one, with plans for additional doors after the first has pulled in reliable sales figures; even finding one ideal location can take significant time and investment.
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However, Powell and her team believe they have an edge: their brand of comfortable and versatile shoes resonates with women on vacation who need shoes that will take them from walking tours to restaurants. Shopping is still an inherent part of many people’s vacation experience, making tourists a more reliable brick-and-mortar customer.
“When looking to open a new location, the first question to ask is ‘who is your customer, what is their age and demographic?’” said Amira Yunis, EVP of retail at real estate brokerage firm CBRE. “Once you know that, we ask ‘where is the highest density of these shoppers?’”
Following that line of thinking, Charleston Shoe Co. has focused on building its brick-and-mortar presence in areas with affluent vacationers. In addition to stores in Savannah, Ga., and both North and South Carolina, Charleston Shoe Co. has opened locations in Florida, California, Martha’s Vineyard and Nantucket. Tourist-packed Manhattan seemed a natural fit.
“New York was always on our radar, it was just whether we were willing to take that big of a risk financially,” said Powell. “I think specifically with these markets — Sixth Avenue, Soho, Southampton, Pier Village — we’re still keeping with our same model, which is a good mixture of not only local customers but also the tourism industry.”
For retailers looking to take advantage of the lower rents, Yunis at CBRE suggested dedicating time to finding the right space. When looking at existing locations to determine future strategy, Cushman & Wakefield senior associate in retail services Aylin Gucalp recommended looking at data beyond store sales figures to determine success — the store’s halo zone, customer acquisition and generated loyalty are all important considerations.
Nevertheless, Charleston Shoe Co.’s expansion could be seen as a reflection point for New York retail real estate. Footwear, in particular, is well-positioned to take advantage of a favorable market.
“Footwear will always be a product category that relies heavily on brick and mortar simply because most consumers need and want to try on the product,” said Gucalp. “The variability in sizing — and frequently the additional desire for service when picking performance-based shoes — has the customer going into the store.”
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