Wednesday, December 22, 2010

A Walk Up Madison

by Alexandra Lebenthal

In 2008 it was pretty difficult to not notice empty store fronts on almost every block on Madison Avenue. It was tragic to see this glamorous avenue looking as tattered and impoverished as it did. What was worse, at a time when the City economy desperately needed revenues, people who had the wherewithal to do so, were reticent to be seen coming out of stores carrying bags loaded with expensive items.

Last summer however, I noticed a sign announcing the future opening of Brooks Brothers on 86th street. I’d been shocked to see Bolton’s, the former tenant leave as it had been there just about as long as anyone could remember. Brooks Brother’s was definitely going to be a step up. If this wasn’t a sign of things starting to turn around I didn’t know what was. How interesting after all these years for them to be making their first foray to the Upper East Side. What a smart marketing move. The Upper East Side must have the greatest concentration of customers than anywhere else in the City.

All of a sudden, I started noticing more and more new stores and construction sites on the Avenue, and by this Fall my financial microscope (or “macro-scope”) started working. I could see the rebirth happening and was thrilled for what the economic impact could be for the City.

This past weekend I walked up from 62nd street with my new iPod touch taking photos of some of the new buildings, peered inside the windows, noted employment signs, and spent a fair amount of time admiring some of the window displays.
I suspect we aren’t totally out of the woods yet. Amongst the new construction, a number of buildings remain empty; the faded names of their former tenants still legible, for lease signs screaming availability, or brown paper covering store windows, in an effort to mask the desertion and remnants of the former tenants inside.

But from what I can see, there are more stores under construction than empty. $487 million was collected by the City in licenses and permits last year and $594 million was paid in commercial rent tax. And $5 billion in sales tax was collected, an increase of $500 million from the prior year.

The 4 ½% City sales tax is one of the most important numbers in the City budget, so every new store is a critical part of our rebirth. Every dress, watch, shoes and bag sold adds up.

There is a lot I could write, but given the images I have seen myself, and given the wonderful photos that normally grace NYSD, I thought this visual holiday card with a few economic facts, anecdotes, and thoughts would best express my optimism and hope for the next year. Indeed, some of the photos are an effort to do my part by suggesting a few gift items that might be look good under the tree or as a belated Chanukah gift.

Where it all started!
Visions of custom made suits, pin stripe shirts and cufflinks aside, the best image this sign evokes are the people who will hear “We’d like you to work for Brooks Brothers.” To some it will be the first time they’ve heard 'you're hired' in a long time. Indeed, the unemployment rate in the City has declined steadily, and is now at 9.1% down from its peak last year of 10.5%.
Lily Pulitzer has been open for a few years but I noticed these colorful sweaters, a departure from the usual summer prints. Had I not been on my photo mission I might have stopped in for one.

“Silk” stocking stuffers from Jack Vartanian between 77th and 78th.
Brazil’s Track and Field store opened at the end of 2009. This is one of several new stores opened by foreign companies that are coming to New York City for the first time.
The Gagosian store also opened at the end of last year. A concoction of art books and whimsical items, its location between 76th and 77th is in prime real estate amongst art galleries, the Carlyle and Mark Hotels. Given all the Yorkies, Westies and Scotties in the area, I’d imagine these vases sell quite rapidly.
Walking by Gucci on Madison and 70th reminded me that if anyone wants to buy these shoes for me — I'm a 7.
Stephen Russell was one of the brave ones that opened in 2008, so as a tribute to its survival here’s a gorgeous bauble just waiting for someone to snap it up. Price wasn’t available online. I guess the old adage still holds true, “If you have to ask…”
I couldn’t help but notice the streets as well as the sidewalks. When new stores open, or workers need to get to construction sites, the traffic increases, also of economic benefit in many ways. They are all a part of the revenue engine that drives our economy.

If you can catch the limited, $2.25 for a bus ride is still the fastest, cheapest ride up Madison Avenue.

When you see a taxi go by realize the effect of a weak economy. In 2007, 308 taxi medallions were sold totalling $141 million. By 2009, there were only 109 totalling $48 million.
Chances are the monthly garage fee for the Mercedes pictured below is approximately $600 per month including parking taxes paid to the City.

Regardless of whether it’s a sign of wealth to some or vulgar to others, the stretch limo can easily cost hundreds of dollars an hour which adds up to a hefty tab at the end of a day of shopping but is a great way to store all those packages!
These orchid plants in the window of Manrico probably cost several hundred dollars. If people arent buying cashmere sweaters, the flowers don’t get purchased creating a domino affect for the economy.
When I was a few blocks further uptown passing the Herrera store, I again thought of those flowers. The Botanical Garden Orchid dinner a few weeks away and this dress in the window of the 77th Street boutique (below, left) would be the perfect thing to wear. I didn’t go inside to check the price, but I'd guess with the sequin and bead detailing it’s at least $5,000.

Some readers of this site might gasp as you read this (and some husbands might shudder), but the seamstress that worked on it for hours, hand beading every detail, appreciate every dress that is sold, for it enables them to feed their families and probably send money home as well. What’s more the money raised by the Garden at its dinner goes to fund needed programs, particularly with the budget cuts they’ve had to make over the last several years as revenues and grants from the City and private patrons have declined.
Carolina Herrera’s main store is on 76th Street but last year she opened CH, for the bridge line, on Fashion’s Night Out which two years ago helped make shopping fashionable again.

The Sharper Image declared bankruptcy a few years ago. I was shocked that their store front on 72rd Street languished at long as it did, but lo and behold Milly is opening up in part of that location. Milly is a great New York entreprenuerial success story, celebrating its tenth year in business next year.
I'm guessing as many if not more of Michelle Smith’s delightful coats and dresses will sell as did massage chairs in the past.

Lisa Perry’s boutique has been open for several years.

The store is modeled after the designers own sense of “mod” style. These dresses would be perfect for four friends to wear to the Central Park Conservancy “Hat Lunch” in May.
The lunch represents the incredible economic power of women in the city, raising $2.5 million for the care of Central Park last year. Their work keeps the park beautiful regardless of the economic climate, a far cry from the 1970s when there were no private donations, and no public money for its upkeep as the City struggled to even pay for trash collection.
For the last several years I have been devasted by the closure of Gardenia Coffee Shop and then I read last week that Tory Burch is opening there. Sounds better than a tuna melt to me — and no more schlepping to the meat packing district for Reva flats and tunics!

Michael Kors is currently on Madison and 77th. This is a much larger location, to which he will be relocating. There’s that beautiful employment sign again.
The long awaited J Crew Bridal store opened last Spring next to Dennis Basso and Nespresso. J Crew also boasts a boutique on 79th Street and Crewcuts on 87th Street, and thus has become a key tentant on Madison Avenue.
According to Crain’s New York Business, rents have dropped from $1200 per square foot at the high point of the market to $800-$900. The drop was enough for many brands to decide the time was right. Below are some signs of life!
Two stores are opening up next to one another on 64th Street. I'm a little embarassed not to have heard of Freywille, but they are a Viennese jeweler with more than 60 boutiques world wide. Another global company to decide the time was finally right for New York City.
The other is the more than well known watch maker Vacheron Constantin, whose pieces sell for tens of thousands of dollars. Add the New York State and City sales tax which totals 8.875% (4% for the State, 4 ½% for the City and an addional .375% for the MTA) and that’s $3,550 per $40,000 watch. As someone who has grown up understanding the need for taxes to support our economy I have always cringed when asked if I have an out of state address I’d like to have something sent to in order to evade the sales tax.
At Kentshire Antiques, diamonds are a girl’s best friend. Wrap it up ... I'll take it!
Viand has the best roast turkey sandwiches in the City, so Agent Provocateur will hopefully have a steady stream of customers when it opens next door this Spring.
A few years ago, a young designer from Hong Kong moved to the City to expand his business. He worked out of his atelier at home. I was lucky meet him and wear some items from his collection, so I was very pleased to see this storefront announcing his new boutique.
Husbands may shudder at the thought of cocktail parties in stores, but many new stores attract P.R. and clients by these events. The champagne, the caterers, the public relations staff and the photographers are all paid that evening. Social life in the City does have a financial impact.
Above all though, the crown jewel of Madison Avenue’s renaissance must be the new Ralph Lauren Store across from its flagship at the historic Rheinlander mansion. The new building looks as if it’s been there forever. It’s hard to remember the old site that had stood there, virtually unchanged for decades.
The pre-Ralph Lauren site. The old site.
The new site.
I'm often accused of being an eternal optomist, but I'm also a realist. I use real signs to reinforce my intuition. I can only feel good by all of these new developments and hope that the coming year prooves me right. A warm, prosperous and joyous holiday season and 2011 to all.
(Note; the economic figures in this article were taken from the November 30 New York City General Obligation bond issue Official Statement.)
Alexandra Lebenthal learned from her father, Jim Lebenthal, and grandmother before, about the basics of finances and investments. Today she is the CEO of Lebenthal & Co., LLC and its wealth management division, Alexandra & James Co.