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FROM COAST TO COAST, NEIGHBORHOOD BY neighborhood, contemporary retail is on fire.
Over the past decade, the category has evolved into a blend of emerging designers, updated sportswear and premium denim that has proven a hit with consumers and a boon for retailers. It has fostered specialty chains like Scoop, Calypso and Intermix, caused established multidoor stores to change direction - witness Washington, D.C.-based Up Against the Wall's transition from streetwear and sportswear in 2002 - and driven established specialty stores to revamp merchandise or launch contemporary offshoots like Neiman Marcus' Cusp and Barneys Co-op.
But leading the charge in this movement has been the independent boutique. "Department stores pick up on what's hot in the boutique market every 10 years," said The NPD Group's Marshal Cohen. "Everyone's driven by contemporary's success and competing for fashionable customers at better price points than designer wear."
Overnight interest in contemporary has already affected independent contemporary retailers. Beyond vying for customers, they have to compete for vendors and battle department store markdowns, general retail growth and global economic uncertainty. Cohen reports there are 21 square feet of retail space for every person in the U.S., and retail will continue to expand as long as the housing market remains relatively healthy. With such expansion comes the risk of neighborhoods oversaturated with boutiques offering similar merchandise.
When Tricia Tunstall opened p.45 boutique in an ungentrified Chicago neighborhood in 1997, she was considered one of the pioneers of Bucktown. Today, Tunstall estimates there are 15 contemporary stores within blocks of her location. "The variety is great for the city, but stores have to share sales and designers unlike before," she said.
The contemporary store boom took even less time in Miami Beach, which grew from a couple to a dozen in five years, with more on the way during high season. "When I opened in 2001, women didn't understand what contemporary meant or see value in unknown designers. Now they do, because of all these stores and magazines dedicated to it," said Bonnie Engelstein, owner of Chroma boutique in Miami Beach.
As the market grows tighter, finding a way to stand out from the competition will be the key to success for many boutiques. "The definition of boutique will evolve from...