High incomes vs. wealth as an indicator of what might be more or less successful retail: CityCenterDC
A few weeks ago, the Washington Post Magazine had a long article, "D.C. got everything it wanted out of CityCenterDC — except the crowds," about the CityCenter development, a four-block mixed use retail development on the site of the old city convention center, well located in Downtown.
The RFP for the site specified unique retail targeting high income segments of the consumer market and luxury brands. But so far, the retail there isn't performing particularly well. From the article:
D.C. officials spent more than a decade turning the site of a failed convention center south of New York Avenue, between Ninth and 11th streets NW, into a luxury emporium filled with brands that could help reestablish downtown as a place to be.
Over two square blocks, CityCenter offers 30 stores and nine eateries, a pedestrian alley, fountains, a courtyard with a permanent video installation and an outdoor plaza. Most of it opened two years ago after it almost wasn’t built because of the financial crisis, and it has survived bumps like a salmonella scare.
I think this comes down to how commenter charlie admonishes me on occasion to better distinguish between wealth and high income when I write about certain things.
On a recent weekday evening, Peter and Rhoda Trooboff are walking through CityCenter on their way to a meeting of the Jane Austen Society of North America, laughing arm-in-arm.
Peter has the most Washington of jobs, as a senior international trade attorney at the white shoe law firm Covington & Burling, in the offices upstairs. They’ve been to a couple of the restaurants, they say, but they have never bought anything from a store nor plan to. “Who is buying these things?” Peter says. “Is it enough to keep these stores going?”
People who are wealthy buy luxury goods--aren't fazed at all by the price of a $4,000 dress or bag. People who are high income but not extraordinarily wealthy don't buy large quantities of luxury goods on a regular basis.
Since the DC area is marked more by high income households and less by wealthy households, and because international tourists aren't thinking of DC when they are making big shopping trips, unlike the motivation for trips to cities like New York, London, Paris, and Milan ("How can fashion brands leverage shopping tourism?," Luxury Daily), it shouldn't be a surprise that the high end retailers at CityCenter aren't doing so well.
Still, the article makes the point that CityCenter has attracted luxury retailers from Friendship Heights -- maybe that has contributed to the upcoming closure of the Saks Jandel store there ("Saks Jandel, a legendary Washington boutique, will close after 128 years," Washington Post), Hermes is closing their store in Tysons in Fairfax County Virginia in favor of Downtown DC, and such stores don't need to have large crowds to be successful because they are selling high ticket items.