business news in context, analysis with attitude

by Kevin Coupe

The Wall Street Journal reports that a new mall in New York City’s Hudson Yards development on Manhattan’s west side has embarked a “grand experiment” to see if it can actually take advantage of consumer trend - one entire floor of the mall will be devoted exclusively to stores that began as online retailers.

Among them: Shoemaker M. Gemi, men’s fitness apparel firm Rhone, sock maker Stance and the specialty men’s underwear merchant Mack Weldon.

Hudson Yards, the story says, “represents one of the biggest bets yet that a developer can counter the rise of online shopping by offering customers a chance to visit stores run by a range of popular e-retailers, from drink makers to footwear. The mall developers have offered these companies a longer-term presence at Hudson Yards, with bigger spaces and leases that run for more than a year … The aim is to pique shoppers’ interest with an environment that stands out from the cookie-cutter mall experience focused on transactions and to keep them coming back.”

Projected opening date: March 15.

Now, it seems to me that malls have a choice - they can figure out ways to be completely differentiated, or they can figure out ways to embrace the e-commerce trend and figure out how to make it work for them. (I guess another option is to sell the place to Google for office space, like the Westside Pavilion did in Los Angeles, but that’s not an option open to everyone.)

In this case, I think they’re opting for what could be a canny combination of the two - devoting a floor to brands with e-commerce roots strikes me as making a lot of sense. I’m not sure that long-term leases are the answer … in fact, it seems sort of antithetical to the theme … but I know very little about commercial real estate except to understand that B and C level malls are sucking wind these days. They have to do something.

One interesting thing about Hudson Yards is the fact that it has a “5-acre landscaped plaza and a monument called Vessel that is designed for visitors to hike its 2,500 steps.” I walked by there the other day, and it is impressive … and if one is in any kind of shape, perhaps a certain kind of unique and compelling magnet. It would appear to be, in fact, an Eye-Opener.
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