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retail-features

Summer in the Hamptons: Better, But No Boom

The Hamptons aren’t over. They’re just mellowing out amid the global recession.

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Michael Kors new Southampton store.

Photo By Robert Mitra

Retail in the Hamptons.

Photo By Robert Mitra



J. Crew Group doesn’t view its stores in East Hampton and Southampton as seasonal. “Our following is year-round. We are not in it for a quick splash, summer-in-the-Hamptons-image thing,” said Millard “Mickey” Drexler, chairman and ceo. “We have long-term leases. We treat our stores in the Hamptons like collection stores,” which offer J. Crew’s higher-price range.

However, it remains to be seen how Hamptons residents will respond to some of the more costly merchandise being introduced this year. And at least one luxury tenant has already decided to forgo this season: Gucci, which had a presence in East Hampton last year, is not returning.

But there are plenty of others breaking in. While some retailers go the low-cost, whitewash and driftwood route for their summer stores, Balenciaga’s new 1,000-square-foot unit at 54 Main Street in East Hampton — a collaboration between designer Nicolas Ghesquière and contemporary artist Dominique Gonzalez-Foerster — features modular spacecraftlike fixtures, lime green felt carpets, mirrors and white lacquered wood. “[The East Hampton store’s] seasonal opening is our way to bring a special service to our clients (especially the ones spending time in the Hamptons), and anticipating their summer expectations,” said Isabelle Guichot, president and ceo of Balenciaga. “They will be able to discover, at the same time as our clients in New York or Los Angeles, our new accessory collections.”

For Jamee Gregory, a longtime resident of Southampton, early indicators bode well for the season. “Houses are starting to sell again,” said Gregory, who returned to Southampton last weekend after a trip to Los Angeles to find quite a different scene than the one she left. “When we left, it was very quiet and peaceful,” she said. “When we came back, it was insane. There was nowhere to park your car in town. We went to Sant Ambroeus [a restaurant in Southampton] and people were screaming and fighting over the booths. I went to Lynch’s nursery and people were fighting over the pink hibiscus,” she said, noting that garden center activity is a sign people are feeling better about the economy.

Unlike last year, “there was a flurry of leasing activity in March, and by April 15 some retailers were scrambling for space,” said Joel Isaacs, president of Isaacs and Company, who leased the East Hampton site to Balenciaga. “Prior to the recession, rents went as high as $200 a square foot. Clearly this was not sustainable based on the sales tenants can generate in a primarily seasonal community. We saw a great deal of vacancies as a result.”

Brokers said rents are now about $100 a square foot on Newtown Lane in East Hampton and a bit more on Main Street.

“Retailers are cautious about committing permanent funds,” said Laura Pomerantz, partner in PBS Realty, citing the rise in pop-up shops on the East End.

“The Hamptons had a tough season last year,” she said. “A lot of things didn’t rent. What happened in the rest of the world hit the Hamptons.”

Pomerantz said East Hampton has a history of generating higher sales per square foot than Southampton, but last year the reverse was true, with East Hampton pockmarked by vacancies.

Situated between Southampton and East Hampton are Water Mill, Bridgehampton and Wainscott, which have fragmented retail pockets, where right up to last week, a few vacancies were evident in each locale.

Bridgehampton Commons shopping center has experienced some tenant turnover, with Gap and Eddie Bauer closing units, though Staples is moving in. In the Commons, Waldbaum’s, the largest supermarket in the Hamptons; Kmart, which features one of the chain’s most extensive Lands’ End presentations, and TJ Maxx are often busy. The property has a moderate price aura but also charges less rent, at $40 a square foot to $50 a square foot, versus twice what’s seen on street locations. Executives from Kimco Realty, owner of the center, were not available to comment.

In East Hampton, HB Home moved into 83 Main Street, two doors east of Intermix. Juicy Couture took a spot at 17 Newtown Lane. Chico’s grabbed 75 Main Street, next to AT&T. Hampton Cards and Gifts relocated to a site just behind Main Street, Hugo Boss moved into the former Gucci space, while Magaschoni is occupying the former Cole Haan space on the corner of Main Street and Newtown Lane. Michael Stars has also opened on Newtown Lane. Meanwhile, Cynthia Rowley has launched a shop in Montauk, and Michael Kors traded East Hampton for Southampton.

Some stores, like Scoop on Newtown Lane in East Hampton and J. McLaughlin in Bridgehampton, are expecting double-digit gains off last year’s lower base.

“We are very excited about the upcoming season,” said Susan Davidson, president and ceo of Scoop, which operates a store in East Hampton that’s getting “a mini facelift” with new visuals, furniture and fixturing. “Year-to-date, we have one of our biggest increases going, and it’s not even the season yet. Anything beach related — Missoni cover-ups, Poupette gauzy summer tops and dresses, the dress business and shorts are through the roof. What women are dropping to buy dresses is unbelievable.”

 

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