To the casual observer, Chicago’s East Oak Street retail district appears to be just another trendy shopping scene.
In fact, just behind the glittering facades of the Gold Coast trade area lies an artfully constructed and cleverly orchestrated array of unique spaces that house select local, national and international retailers who are able to rack up big profits while boldly making their fashion statements.
It wasn’t always so for Oak Street, which despite its growing chic has had to play second fiddle for many years to Michigan Avenue, the acknowledged retail location leader due, in large measure, to Water Tower Place, one of the country’s most successful malls.
Now, after a decade of reshaping itself, Oak Street has come of age, blossoming into a destination of its own as the top names in international fashion scrap for the few remaining spaces on the street.
“More and more upscale retailers are looking at the Oak Street area as not only a viable alternative to North Michigan Avenue, but rather as a definite preference,” said Fred Lev, vice president of retail properties for Koll/Rubloff and a Gold Coast retail specialist for 12 years.
That has been especailly true in the last year, with some vibrant new additions to the street.
Jil Sander, an expensive line of women’s clothing, opened its first American store at 48 E. Oak earlier this year. Shirley Jones, showcasing local designers, recently relocated to the second level of 102 E. Oak from the Oak Brook Center mall in the western suburb. And the home accessories store Elements, formerly on Wells Street, opened at street level at the address in July.
“Each merchant must have a distinct presence on the street to showcase its name. It’s a subtle form of advertising and a means of keeping alive recognition of its lines in the market, whether or not that particular location makes money,” Lev said.
The cluster of boutiques along the one-block section of Oak Street from Noth Michigan Avenue to Rush Street comprises many established retail jewels, such as Joan Weinstein’s first store, Ultimo Ltd., at 114 E. Oak, and next door the Marilyn Miglin Institute, a skin care, cosmetics and fragrances clinic that opened it doors in 1963.
Bustling around them is the ongoing energetic placement of new gems in the ever-expanding Gold Coast retail landscape.
Lev noted that the Oak Street cachet has even extended to a few established North Michigan retailers such as Lester Lampert Jewelers and Trabert and Hoeffer jewelers, both of whom have relocated to Oak Street within the past year.
“Lampert was virtually a North Michigan Avenue instituition. But now it occupies a phenomenonally architecturally pleasing building, whereas on the Avenue it had just a storefront,” Lev said.
Finding Oak Street to be the perfect location for individual lines of upscale women’s wear, Ultimo’s Weinstein has brought her other properties-Sonia Rykiel from France, Armani from Italy and, most recently, Jil Sander from Germany-to rub shoulders with Ultimo.
The moves are a reflection of Weinstein’s belief that such tiny retailers get lost among the monolithic structures on North Michigan.
“We are a group of diverse small stores, each with a slightly different point of view, but having the same overall philosophy,” Weinstein said. “We attract customers who like to hunt, to be surprised, and who view shopping as an adventure rather than a chore.”
That these Oak Street merchants have found their niche is evidenced by the record high $75 to $100 per square foot rents that they are being asked to pay, the more than 90 percent occupancy rate along the street and the 10-year-plus lease commitments that they are executing, according to Lev.
In fact, Lev sees the Oak Street appeal creating increased interest on the more eclectic Walton Street paralleling Oak to the south. The west end of Walton, near Rush, recently became home to Shabby Chic, an upscale furnishings store, and Burdi, a men’s suitery that numbers Michael Jordan and Scottie Pippen among its clientele.
But Lev said he expects room to be made for more of these stores on Oak Street itself, if the city of Chicago grants a developer’s request to allow the Esquire Theater, 58 E. Oak, to alter its historic facade and add windows-changes that would pave the way for creation of ground-floor retail where six cinemas now stand.
“We’re sitting on 40,000 square feet of space that is currently not generating the kind of business it should,” said Buzz Ruttenberg, president of Lakewest Inc. the real estate company that is part owner of the landmark theater building. “With the changing nature of the neighborhood, we welcome the addition of retail space. Oak Street needs more daytime activity, providing the new use is compatible with existing stores.”
Ruttenberg said he thinks the increasing popularity of Gold Coast reail reflects the upper end of a trend existing in the city as a whole.
“After fleeing to Chicago’s suburbs in the 1970s and 1980s, many merchants now are realizing the city is a profitable place to be,” he noted. “Chicagoans long have been underserved by quality retail. Many simply traveled to New York and Los Angeles for high-end fashion and design.
“Now globalization has brought more international as well as national retailers to Chicago, and the city’s retail picture is robust.”
Ruttenberg said the high amount of disposable personal income found in Chicago and its suburbs, ranked No. 1 in the country in that regard in at least one business survey, is what gives the area its retail strength.
“Chicago is the strongest metropolitan community in the nation today,” he said. “Historically, we’ve been viewed as just that `blob in the middle of the country.’ But in our slow and plodding way, we have been protected from the major retail downturns that hit both coasts.
“Now, as more and more merchants are arriving and pushing the boundaries (of established retail districts,) our reputation as a premier retailing center is growing even mightier.”
Russell Salzman, executive director of the Greater North Michigan Avenue Association, a nonprofit membership group that covers the area, said that as North Michigan Avene retail has flourished, the streets which intersect the boulevard have all enjoyed increased activity, following Oak Street’s example.
“Oak Street is the acknowledged leader today because it has conscientiously evolved over the years through adherence to certain standards,” Salzman said.
“Oak Street merchants are different from the masses. Close attention to detail and emphasis on property maintenance and beautification of public spaces have become an important piece of their business image. These high standards tend to spill over to the Avenue, benefitting us all,” he said.
A strong and consistent marketing plan, backed by a passionate community spirit, is credited with making Oak Street the retail magnet it is today, according to Marilyn Miglin, one of Oak Street’s retail pioneers and current president of the Oak Street Council, a nonprofit trade organization.
“We decided to create a demand for quality and set a condition in motion to invite the finest stores to come to Oak Street,” Miglin said of the council’s creation in 1987. “In addition to our beautification program, we were intent on sharing `Chicago’s best kept secret’ with the rest of the world.”
The council has succeeded handily. Today, Oak Street has one of the largest contingencies of goods and services in the world and attracts an interesting mix of locals, tourists and conventioners, Lev said.
“Oak Street represents an extraordinary coming together of merchants who often are in competition, but who also actively support the broader goal of the community,” Lev said, citing the charity events sponsored by the council and the landscaping program that resulted in the late Mayor Harold Washington’s proclaiming the street “Chicago’s International Center for Art and Design” in 1987.
“Oak Street always will be an elegant investment for the right tenant,” Lev said.
And Lev prides himself on knowing what type of tenant is right, having located space for more than 40 Oak Street retailers in the past decade. Among his deals are such retail notables as Sulka, Wolford Hosiery, Pratesi Linens, Pea in a Pod and, most recently, Luca Luca, Milanese designer Orlando Luca’s women’s clothing line, comfortably ensconced in the 61 East Oak building.
“Working on the highest retail level has enabled me to appreciate the standard of excellence these individual boutique names require and to service their needs appropriately,” he said.
“For example, we may fixture and equip a store such as Hermes of Paris, Armani or Sulka with a cost upwards of $200 a square foot, compared with an average retail cost of only $40. With the Hermes store, we knocked down the original structure and built a new one; for the interior they imported hand-rubbed woods from Africa.
“When you’re talking about selling an unlined windbreaker for $1,500 to $2,000, accompanying accessories must be highlighted with the finest hangers, trims and store displays money can buy. At such high price points, these merchants can only be situated in the center of North Michigan Avenue or on Oak Street, preferably in their own building.”
Conversely, Lev noted that if a store does not possess “Oak Street potential,” simply locating there is unlikely to garner the expected results. That was sadly discovered by the owners of the women’s clothing boutique Lanina, formerly on Broadway, who recently terminated their lease and closed their short-lived Oak Street store.
“It takes a little more time to find the perfect location for upscale retailers, but they are usually no harder to work with than generic retailers who typically are spending less money,” said Cynthia Fircak, a retail leasing associate with Equis Inc., a nationwide real estate firm headquarted in Chicago.
Fircak currently is representing a British women’s clothier with an eye on one of the few remaining spaces on Oak Street.
“More and more international concerns are interested in coming to Chicago, and they want to feed off the demand created by those who are already here,” she said. “They usually start out saying they want Oak Street or Michigan Avenue, and we have to figure out which is better for their needs.”
Oak Street was the obvious choice for Gianni Versace, whose Chicago store at 101 E. Oak is the designer’s only free-standing retail outlet in the world.
“We were one of the first European boutiques to come to Chicago nine years ago,” said Versace manager Joy Sandler.
“Others followed suit when they saw us prosper. It’s just gotten better and better, so today Oak Street is the Madison Avenue or Rodeo Drive of Chicago. And we are still where we should be.”
Lev said that although the rush of upscale retail to Chicago in general and to the Gold Coast in particular did not occur overnight, there has been a definite progression of high-flying outsiders coming into the city over the last four or five years, resulting in space being at a premium both on Oak Street and North Michigan.
No significant amount of new space is expected to be available in either location until 1996 or 1997, when redevelopment of the 600 North Michigan block and a portion of the the 700 North Michigan block are expected to be completed, given current development timetables.
“Certainly such high-end retailers have to look carefully at the people around them before setting up shop,” Lev said.
“But these days, they look around and see that Chicago is no longer the Second or Third City-in retail or anything else. And that’s good news for all of us.”
