VOGUE BUSINESS | KATI CHITRAKORN
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Key Takeaways:
After only two years, 10 Corso Como in New York is closing its doors, citing the acceleration of the coronavirus.
Curatorial stores have had more endemic problems, such as rising rents and changing consumer shopping habits.
While there are opportunities for multi-brand specialty stores once the virus passes, factors like location and proper partners are key to survival.
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The arrival of 10 Corso Como at the Fulton Market Building in New York’s Seaport was highly anticipated. Former Italian Elle chief editor Carla Sozzani pioneered the luxury concept store when she opened the original location in Milan in 1990, bringing together high-end goods with art, food and live events before shops like Colette and Opening Ceremony.
Sozzani expanded the brand outside Italy in 2002, when, together with Rei Kawakubo, she opened the 10 Corso Como-Comme des Garçons store in Tokyo. Six years later, she unveiled a three-storey 10 Corso Como store in Seoul. Outposts in Shanghai and Beijing soon followed. Then, the company arrived in New York in September 2018.
But after 18 months, 10 Corso Como New York permanently shut down on 1 April, citing an inability to pay overhead in the wake of coronavirus, which halted the store’s cash flow.
“10 Corso Como New York was the most beautiful, incredible place that I could have imagined,” says Sozzani. “But the Seaport District is for people to be there, and circumstances today do not allow that vision to flourish right now.”
In a crisis, the arts are often among the first casualties, but curatorial stores have had more endemic problems. “They are not immune to the difficulties faced by the department store segment,” says Anusha Couttigane, EMEA principal fashion analyst at Kantar.
Parisian boutique Colette, long considered an apex of fashion trends and a vital champion of emerging labels, shut its doors in December 2017 amid rising rents for retailers in Paris and the changing tastes of consumers, which includes a shift towards more fashion-spending online. At the start of 2020, Opening Ceremony, the high-end retailer popular among millennials, closed all its stores and sold remaining assets to New Guards Group, with co-founders Carol Lim and Humberto Leon explaining that their decision came at a time of “immense change in the way people shop”. And in February, Barneys New York, once a curatorial pillar of the US fashion industry, shut for good, impacted by changing consumer shopping habits and being unable to keep up with its high cost structure.
Steve Dennis, a strategic retail advisor, says challenges in the sector include “rampant overbuilding, a shift to e-commerce and the battle for scarce attention in a world of abundance”. While 10 Corso Como New York’s abrupt closure was accelerated by the impact of the coronavirus, there are other factors at play that hint at larger pressures on the curated concept store.
Location, location, location
Sozzani’s vision for 10 Corso Como in Milan quickly attracted a well-heeled clientele after it launched as a gallery and added ready-to-wear in 1991, a year after opening.
“The idea of 10 Corso Como was to create a place where people could meet, talk, share opinions and socialise,” says Sozzani. “In the ‘90s there was no internet, so to offer a micro-world one could experience with all their senses was the concept.”
10 Corso Como was early to the idea of experiential retail, something that’s become a common strategy for brands and retailers looking to drive foot traffic. Francesca Cattagni, director and head of high street leasing at real estate group Savills in Italy, observes that the original store in Milan is in a popular shopping area that attracts locals, fashion shoppers and design lovers, as well as “an important percentage” of tourists. These customers spend time “not just to shop but also for a glass of wine at lunch or dinner”.
10 Corso Como New York | © 10 Corso Como
For Robert Burke, of New York-based fashion consultancy Robert Burke Associates, the store’s New York location was its biggest challenge. “There are a lot of tourists, the food is good and it’s an attractive development,” he says. “But within any kind of luxury retail, it’s important to have alike brands surrounding it so that the customer isn’t going to have to travel in Manhattan just for one store. This co-tenancy of luxury brands is really important, which 10 Corso Como didn’t have.”
The retailer’s downtown location by the pier also made it vulnerable to the weather, and the store saw slow traffic in the winter months of January and February, according to Alexa Zhang, who has worked in sales and marketing for 10 Corso Como New York since its opening. Jennie Wan, who joined 10 Corso Como New York last August as a sales associate in the jewellery department, says that while the store was a draw for international customers, the location was “tricky”.
“Ultimately it was a very large store that was in the wrong location. They got the distribution of many of the designer brands, but the customer didn't go there,” says Burke.
The importance of partnerships
When 10 Corso Como entered the US, it made experienced hires such as Averyl Oates, a veteran of Harvey Nichols and Galeries Lafayette, who was hired as managing director to help Sozzani run the US side of the business.
For the property, a 28,000 square-foot space, the retailer struck a deal with real estate developer The Howard Hughes Corporation, who had been working to revitalise the former Pier 17 into an experiential destination. “Their goal in having 10 Corso Como was to attract other high-end retailers and brands to come to the development,” says Burke.
But the Dallas-based developer didn’t have extensive experience in operating retail. “When you go up the food chain of high fashion, it becomes a very specific consumer and specific market. If you have someone who is not well versed in that world, it can be very challenging,” says Burke. “[Howard Hughes] was a real estate company, not a retail operator.”
10 Corso Como in Seoul and Milan | © 10 Corso Como
Finding the right operating partners can make or break an international expansion. When 10 Corso Como expanded into Beijing and Shanghai, it partnered with Trendy, a Guangzhou-based group backed by L Capital Asia that runs stores for brands like Miss Sixty and Superdry across China. But Trendy specialised in mass-market fashion and had little experience running a high-end operation.
10 Corso Como’s store at SKP Beijing was shut in 2017 due to losses, despite SKP being one of the most lucrative luxury retail destinations in China. Two years later, 10 Corso Como’s Shanghai store closed when Trendy declined to renew the lease and the partnership. The 10 Corso Como-Comme des Garçons store in Tokyo has also shut, as its licence reached maturity in 2012, according to the retailer.
“Like life, they have all followed a natural progress. In Tokyo, Shanghai and Beijing, our contracts came up. In New York, there were factors that nobody could have anticipated that changed the dynamic of the project. Each 10 Corso Como has been very different, with its own reason to open and end,” says Sozzani.
The remaining 10 Corso Como stores today outside of Milan are in Seoul: a standalone boutique in the upscale district of Gangnam and another inside Korea's largest luxury department store Avenue L, owned by Lotte Corporation. Both stores are operated by Samsung-owned marketing arm Cheil, which also manages pioneering South Korean retailer Boon the Shop.
In South Korea, it's not uncommon for retailers to all be owned and operated by chaebols, a Korean term used to describe family-owned, multi-interest conglomerates. Chaebols became a key part of the South Korean economy in the 1960s when the government used them to modernise the economy. According to statistics from Euromonitor, chaebols accounted for about 85 per cent of South Korea’s GDP in 2017.
Like Boon the Shop, 10 Corso Como in Seoul has thrived. “Their expansion to Seoul has worked thus far because they leveraged their insider status to be an entrant into a fast growing, large fashion city at the right time,” says Dennis.
“The key here is to have operators that are extremely experienced in the luxury fashion sector,” says Burke. “When you have someone who’s doing a licence, it’s a very difficult proposition if they don’t have a significant amount of experience in fashion and luxury retail.”
The challenge for concept stores
10 Corso Como has always been more than a clothing retailer. Sozzani made the first Milan store a success by channeling her point of view.
She convinced the company of French furniture designer Pierre Paulin to recreate his circular sofa for one of the store’s centrepieces. A collaboration with Martin Margiela launched at the New York opening, alongside classic and iconic pieces from the late Azzedine Alaïa. The interiors were designed by Sozzani’s partner, the American artist Kris Ruhs. Most of all, she was a great supporter of emerging brands, such as 2020 LVMH Prize finalist Chopova Lowena, Dutch cult-favourite Camiel Fortgens and contemporary label Vien Atelier.
“10 Corso Como gave us a level of exposure to certain types of customers that are unique to the shop. We had an amazing sell-through in our first season,” says Emma Chopova, who co-founded the label with Laura Lowena. The British brand was picked up by 10 Corso Como in their second season, for Autumn/Winter 2019. “It’s one of the most important stores in the world and being there has brought our brand to another level,” agrees Vien’s creative director Vincenzo Palazzo.
“We wouldn’t be at the point where we are now without 10 Corso Como,” adds Fortgens, whose label is also stocked at Ssense, LN-CC, H Lorenzo and Tom Greyhound. “They have been very loyal to us for four seasons now, which means a lot to us. 10 Corso Como is still one of the biggest orders we get from Seoul.”
But the retailer’s success in Milan wasn’t easy to replicate. Despite Sozzani focusing business on food and beverage, the New York restaurant and cafe closed down in its second year. Those who had visited 10 Corso Como in Milan said that the experience in New York couldn’t match up. The retailer said it would focus on customised catered events instead.
“The concept was a little esoteric for the US, particularly for that area within New York,” says Burke. “With any concept, when you take it internationally, it needs to be adjusted to the local consumer’s mentality and taste level. You don’t want to change it so much that the store does not reflect the DNA, but sometimes the concept can be limiting in its appeal globally.”
One of the biggest challenges of a curatorial store is converting footfall into sales. “10 Corso Como is a place to see and be seen. While the influencer crowd may appreciate the aesthetic of the destination, the vast majority of people who go to 10 Corso Como are visitors, not shoppers,” says Couttigane.
And there’s no undoing the impact of e-commerce, which contributed to the demise of curation-led retailers like Opening Ceremony and Colette. “Like the luxury department store segment, showrooming is an endemic problem for [concept retailers],” Couttigane continues. While concept stores take visitors on a voyage of discovery and very often introduce them to new and exciting products and ideas, consumers later look for a cheaper alternative elsewhere, online.
“All of these stores are exceptional in quality and in their ability to curate a very interesting assortment, which reflects the personality and taste of their founders. They are likely going to work best where they first originated, where their founders have higher notoriety and traction, and where they may have the best real estate deals. But the difficulty is always the same: having enough sales to support the store economics, and this is becoming more difficult for multi-brand stores in the new era ushered by Covid-19,” says Bernstein's senior luxury analyst Luca Solca.
The culmination of these factors represents a precariousness for highly curated, concept retail that predates the spread of Covid-19. Burke is optimistic for a rebound in luxury spend and believes there are still opportunities for multi-brand specialty stores. The Webster, Kith and Ssense, which “closely control their designer assortments, DNA and brand image”, have demonstrated this, he explains. “After the virus passes, it's going to go back to being about personal service and having connections with sales people.”
Sozzani plans to keep going. At 72, she says there are no plans for her to retire.
“The structure behind every 10 Corso Como is editing what is present, in the surroundings and the culture. We are like a magazine; a living magazine, a continuation of my experience as an editor; this has never changed. 10 Corso Como is not a marketing project. On the contrary, its concept became a marketing study, but there is no template. We are sad to say goodbye to New York, but the future is yet to be created,” she says.