Karl Otto Lagerfeld, the famous German fashion designer, and creative director, once made a powerful statement - “architecture stimulates fashion.” Some may dismiss this, but a look at what is happening; from Arizona to Dubai, real estate developers are taking up projects which are heavily influenced by the leading fashion lines. This trend has gradually been gaining momentum, but the pandemic changed everything. The lockdowns and travel restrictions made people feel caged. To a large extent, there has been a shift from big towns to small suburbs as people look for places that offer breathing space.
The movement is being compared with the 1950s suburban migration where many Americans desired to create familial environments which are secure. The only difference is that the federal government then was at the center of suburbanization where they encouraged mass migration from the cities. This time around, the only role government is playing is implementing policies that are meant to curb the spread of infections. The desire to move has been occasioned by some form of claustrophobia, where the feeling of confinement has overwhelmed people and all they need now is some breathing space and a feel of what small cities and towns have to offer.
High-earning people have opportunities to live in places that offer this kind of environment. This movement has affected everything, including retailing and real estate. Even for those who had moved before the pandemic, the effects of travel restrictions can be felt where analysts argued that not everything was gloom, there was a silver lining. Working from home and confined to their neighborhoods led to the thriving of small and community-focused fashion outlets. State of Fashion report 2021 predicts that the shift brought with it new tidings where the number of small fashion stores will increase and neighborhood stores will be designed to forge local connections. What does this mean for the real estate industry? Increased demand in local fashion stores will attract more entrepreneurs, meaning that the commercial spaces will likely see an increase in prices, a plus for the investors in this part of the market.
The fashion industry is greatly dictated by migration; the focus has been on big cities and towns. If somebody were thinking of launching a big concept in the fashion industry, the first places to think about would have been New York or San Francisco, among others. However, with the shift of where people are now working (i.e., from home), small places will now be on top of the list. The changing fashion retail trends will have many rethinking their plans for big cities.
Already some of the big players in the fashion industry are leading the way. RE/DONE has opened a store in the Hamptons and they are set for Greenwich, Aspen, and Connecticut as their new targets in the future. Similarly, Southern California is following the same direction. In their expansion, they are leaning towards small format retail stores in the beach communities where they believe future customers are likely to spend their time. With these areas currently underserved, they cannot go wrong. Karl Lagerfeld was very right - real estate is stimulating fashion.