As one top Los Angeles-based real estate broker says, if you are a luxury retailer, and you are located on Rodeo Drive, you’ve made it. It’s just three blocks, dotted with palm trees, home to over 100 of the world’s leading brands, melding with art and culture. Rodeo Drive is a force of influence in the retail world, the home to world-class fashion and luxury boutiques, felt as far north as Toronto. And it’s strength now (its vacancy factor has never been more than 5%) is another sign the luxury market is emerging nicely from the pandemic, even from a symbolic perspective.
The Rodeo Drive Committee reported a surge in real estate and business activity earlier this month. Vaccines and safety protocols propelled that. Governor Gavin Newsom announced a full state-wide opening for June 15. Merchants on Rodeo Drive, some of the world’s leading luxury brands, are reporting double-digit increases in online and in-store sales. Boutiques are opened for regular hours now. New collections are displayed in windows. People are venturing out. Even international visitors are starting to return.
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On the luxury car front, according to Technavio, an auto industry research company, Ferrari, leasing a space on Rodeo Drive for the first time, had a share price jump of 27 per cent last year. Lamborghini’s order book is full through October. Porsche has the Porsche Design Clinic on Rodeo Drive, and reported in March that revenue reached an all-time high.
So while the re-opening of businesses from the pandemic continues to drag north of the border, it’s good to know that the appetite for luxury items is there. We should see something similar when we get our act together up here. That’s especially important for Canada’s luxury retail hubs. That includes places like Bloor St. and Yorkville in Toronto, Alberni St. in Vancouver, and Golden Square Mile in Montreal.
Piaget and Jaeger-LeCoultre are two major brands that have taken up new residences on Rodeo Drive. Cartier, Chanel and Dior are long-time residents and are investing in their presence there. Over the past year there was the $122 million sale of two adjoining landmark properties on the two-mile long Beverly Hills strip. That’s home to flagship stores for Alexander McQueen and Brioni. A private real estate investment and development firm made that purchase.
Regarding Luxury spoke with Mark Tronstein, whose family has owned multiple properties on Rodeo Drive dating back to the 1970s. We also spoke with Kathy Gohari, president-elect of the Rodeo Drive Committee. They talked to us some more about how boutiques, restaurants and hotels are re-opening as Covid-19 restrictions ease:
Kathy Gohari: All the talk has been about the rise in e-commerce shopping over the past year, but expand on the positives of the face-to-face shopping experience, and how that will impact business on Rodeo Drive coming out of the pandemic?
How has the psychology of people changed, coming out of a pandemic, regarding their view on luxury?
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Do you think people will be more drawn to luxury after a year of lockdowns, sitting at home in loungewear, with nowhere to go?
Loungewear is absolutely going to stick around, but as things reopen, it’s certainly time to ditch the sweatpants. People are trying to put the last year behind them and establish a new normal. They’re looking to renew their wardrobes and many are bursting to dress up and venture out into the world in new luxury pieces. We have dedicated a whole episode on Rodeo Drive–The Podcast to this subject. It’s called Kick the Sweatpants, Get Ready to Dress. It can be listened to on Apple Podcast and all major podcast platforms.
Mark Tronstein: Even as north as Toronto, there is fascination with Rodeo Drive. What is it that makes it so interesting?
In what sector of the luxury world do you see an uptick for Rodeo Drive, from a real estate perspective?
Private investors are also adding prime Rodeo Drive retail properties to their global portfolios, even during the pandemic. Another key development on the street is LVMH’s Cheval Blanc Beverly Hills hotel, designed by architect Peter Marino.
There’s real activity in hospitality, in fine dining with the recently opened Gucci Osteria by Michelin-starred chef Massimo Bottura, and in retail. Together they make Rodeo Drive a fashion thoroughfare like no other.
What properties on Rodeo Drive does your family own?
Our family has owned multiple properties on Rodeo Drive since the 1970s and has been fortunate to see Rodeo Drive transform into one of, if not the, premier luxury and shopping destinations in the world.