NEW YORK — There’s another big-box retailer in town looking for real estate.
Babies ‘R’ Us opened a 30,000-square-foot, three-level store on Union Square East last month, joining the growing contingent of category killers and large-format retailers finding sites in Manhattan and seeking more. Real estate sources said The Home Depot, The Container Store, Target, REI, H&M, Whole Foods, Best Buy and Wal-Mart are prowling for space.
Babies ‘R’ Us operates more than 200 U.S. stores, but the Union Square space is the chain’s first in Manhattan. “We’ll open more stores in Manhattan — absolutely,” Rick Markee, president of Babies ‘R’ Us, said at the ribbon-cutting ceremony.
However, he said that no additional leases are signed and a second Manhattan unit wouldn’t open until after 2006. Finding sites in Manhattan is challenging, Markee explained, because Babies ‘R’ Us requires large formats, preferring 25,000- to 37,000-square-foot footprints. Competition for space is heating up with other big-box players.
“Some retailers have to downsize to enter Manhattan, but they are still big box, and must have usable lower levels or second levels,” said Jeffrey Paisner, executive managing director of The Lansco Corp. “They can’t use the same size format they use in the suburbs because the operating costs in an urban setting are far greater and it’s tough to find the right multilevel situation. Retailers are further limited by community opposition in certain residential areas.”
Arnold Aronson, managing director of retail strategies at Kurt Salmon Associates, said, “The high costs are made up by high volumes, and if you put in a compelling product story, you are going to do a lot of volume.”
Despite difficulties, some retailers have managed to find the space. “Just look at Whole Foods. They’ve found locations all over the place,” Aronson said, citing the locations on Union Square South, in the Time Warner complex on Columbus Circle and on Seventh Avenue and 25th Street, with units set for Greenwich Street in TriBeCa and on Bowery and Houston Streets.
With the city’s dense population as the key attraction, Markee contended that Babies ‘R’ Us in Union Square, on the site of a former Toys ‘R’ Us, should do well considering that 100,000 babies are born each year in the five boroughs. He said the store is heavily stocked with the largest selection of newborn and infant merchandise. Babies ‘R’ Us is the sister division of Toys ‘R’ Us.
Related Articles
You May Also Like
Pam Wallace, Babies ‘R’ Us general merchandise manager, said the new store reflects the company’s drive to make Babies ‘R’ Us more fashionable, whether that involves cover-ups, strollers, furniture or exclusive merchandise. She cited strollers in a range of colors from hot pink to turquoise and black, and added that some key vendors, such as Nautica, are supplying “commodity needs and fashion items,” she said.
In addition, Babies ‘R’ Us has an exclusive collection of nursery decor, furniture, layettes, plush and gifts designed by Wendy Bellissimo. She built her reputation creating nurseries and kids’ rooms for celebrities such as Kelly Ripa and Mel Gibson, but with Babies ‘R’ Us, she said her mission is “to offer style, quality and a collection at an affordable price.”