It might seem old-fashioned, but high quality at a great price never goes out of style. I have to admit: I do like my designer shoes, but I like them even better at 50 percent off.
While the rest of the retail world undergoes an extraordinary upheaval, one legendary New York department store chain, Century 21, is slowly expanding its footprint. (No pun intended!)
Headquartered in Manhattan, the Century 21 department store chain is famous around the world for offering top-name designer merchandise at a 40 to 65 percent discount and is one of the most successful department store chains in terms of sales per square foot. Founded in 1961 by Sonny and Al Gindi, the family-owned business is now run by Al Gindi’s son, Raymond Gindi.
Until recently, all of Century 21’s stores were located in the greater New York area. Now, the company has announced new outlets in Pennsylvania and Florida. Market conditions are right for this legendary retailer. So, one would assume Century 21 will continue to expand.
One of the most refreshing things about this story is that Century 21 has basically stuck to its original business plan throughout the years.
From the beginning, Century 21 has offered designer clothing for men, women and children, along with cosmetics, handbags, shoes, lingerie, housewares, luggage and gifts. The chain has a cult-like following of shoppers that includes fashionistas, bargain hunters and tourists from around the world. Century 21 is one of the most recognized Manhattan department stores, and it ranks high on TripAdvisor’s list of New York’s top tourist destinations.
Fashionistas believe Century 21 offers “better brands than its closest competitors,” and I tend to agree.
We’re talking deep discounts — 40 to 65 percent off — on very nice merchandise, such as Giorgio Armani suits and dresses, Badgley Mischka blouses and skirts, La Perla swimwear, Blush & More lingerie, Gucci men’s watches, and Dolce & Gabbana men’s shirts and trousers. There are new arrivals every day, and unlike some of its competitors, the company features merchandise that is very much in season. You can also get your staples and basics here, including athletic socks, underwear, T-shirts, gloves and scarves.
Expanding to Pennsylvania and Florida
Century 21 is an interesting case study: While the rest of the retail industry is in the throes of a tremendous upheaval, Century 21 continues to grow.
The chain had long since been famous for decades, but in the summer of 2002, when the Gindi family reopened its downtown flagship location that had been damaged during 9/11, thousands of shoppers waited hours on the morning of the reopening so they could have a sales receipt from that momentous day. The store helped to stimulate the revitalization of lower Manhattan after 9/11.
After decades of business as usual, Century 21 surprised some industry analysts last year when it announced plans for its first store outside of Manhattan: a 100,000-square-foot store in Philadelphia’s downtown Center City retail complex.
Prior to this announcement, Century 21 had always preferred to own its buildings; the opportunity had to have been too good to turn down.
In April 2015, Century 21 announced that it had signed a lease for a 85,000 SF store in Sawgrass Mills in South Florida, the first new location outside of the Northeast. It is scheduled to open in fall 2016. Gregg Goodman, president of the Mills, described why he wanted Century 21 as an anchor tenant: “It’s all about increasing the frequency of visits.” He explained, “Century 21 differentiates by bringing in new merchandise on a regular basis. Shoppers have no complacency. They don’t think that what’s in the store today will be there next week. That keeps shoppers coming back and creates a higher frequency of visits.”
Expansion marks off-price retail sector’s strong growth.
There’s another force at work, too. For decades, the retail industry has been adapting to a discount mentality that, combined with the widening income gap, has created a bifurcated marketplace. Everyone wants a bargain, and retailers have had to be creative to meet that demand. Ever since the rise of Walmart in the early ’60s, low-price shopping has been the norm, affecting every aspect of retail. Even first-tier department stores like Nordstrom, Saks Fifth Avenue and Neiman Marcus have adapted, offering high-end merchandise at their original stores and discounted products at outlet stores, some of which have even moved into urban areas alongside their pricier cousins.
Traditional department stores, like Sears and J.C. Penney, are on the decline. “Department store sales as a percentage of overall American retail spend, has declined from 10 percent in the mid-1980s to 2.4 percent in 2011,” commented Michael Brown, a partner at global consulting firm A.T. Kearney.
But the off-price retail sector is consistently outperforming much of the retail sector, and it’s expected to continue growing. According to a recent report from ICSC.org, by the end of 2013 “Burlington, Nordstrom Rack, Ross Stores and TJX were generating about 8 percent, nearly $28 billion, of the clothing and footwear sales in the U.S.” And the sector, the report continues, is expected to continue to “gain market share as it boosts sales from an estimated 6 percent to about 8 percent over the next 5 years in the U.S.”
So, with traditional department stores closing and the off-price sector growing like gangbusters, communities such as Philadelphia and Saw Grass are clamoring for anchor tenants like Century 21.
Century 21 isn’t a power center or lifestyle tenant; it is targeting buyers who are looking for a really great deal. So, Century 21 is more of an outlet center tenant. And yet, if you look at Century 21’s newer stores, they’re designed to look and feel like a high-end department store with chandeliers and white oak floors.
Because Century 21 is in such high demand, it can afford to be choosy. Unless the landlord is willing to invest a lot of money, it probably won’t make financial sense for Century 21 to lease an older department store space, unless there is a strong desire to reposition the building or project
I’m fascinated to see where Century 21 goes next.
Century 21 has kept up with the times, too. The e-commerce website is clean and easy to navigate. The store offers free shipping on orders over $99.00 and a rewards program. And the Century 21 newsletter gives you a daily fashion fix.
Century 21 has created its own unique formula, and it has succeeded year after year by providing value, enriching people’s lives and staying true to its values.
I don’t know about you, but a pair of Manolo Blahnik leather pumps at 51 percent off would definitely be a buy.
Anjee continues to be an insatiable collector of all things retail. She’s a student of culture living next door to future shoppers, whose fleeting trends constantly change the retail landscape … driving retailers, landlords and developers crazy!