Labels launch space scramble.

An emerging trend in retail real estate is the branching out of fashion labels from department stores to their own flagship spaces aimed at establishing a sense of branding.

The labels have sparked a scramble for space in the trendiest areas of Manhattan as they endeavor to attract hard-core fashion-followers and trendsetters.

"Many brands have both wholesale and retail sides, but when they breakout into their own retail store they are trying to brand their identity with people that are considered to be more focused shoppers, who are not driven by price, but by fashion and experience," said Stephen Stephanou, principal of Madison Retail Group.

Brands such as Juicy Couture, purchased by Liz Claiborne Inc. in 2003, have products sold in Macy's, Neiman Marcus, Nordstrom, Bloomingdale's, Saks Fifth Avenue, Bergdorf Goodman and other established department stores. However, the company has also opened three stand-alone stores in recent months at 103 Fifth Avenue, 368 Bleecker and, their newest, at 860 Madison Avenue.

"The brands going into more contemporary streets, like Bleecker, might be very selective going into a mall-type of environment and have chosen to have more of an urban component to their identity," said Stephanou, who's team represented Liz Claiborne in the deals for the three stores.

Josh Strauss, managing director of Robert K. Futterman & Associates, said the labels are attracted to stand-alone stores for several reasons. "In general, what a stand-alone store provides for designers is control on how the product is being portrayed, how the environment looks and how they sell their product. It frees them up to make more money by not selling wholesale."

Futterman & Associates has represented Crocs Inc., a comfort shoe wear; Custo Barcelona, a fashion line at 474 Broome Street, Carolina Herrera, at 954 Madison Avenue, Ralph Lauren, on Bleecker and Madison, Diesel's 55DSL label at 1 Union Square West and Vera Wang's ready-to-wear label at 991 Madison Avenue, in locating their flagship stores.

Other then trying to establish their own identity within the real estate market, retailers aim to give the customer exclusivity through purchasing at their flagship stores. "Sure [customers] could get Polo at Macy's, but shopping on West Broadway is more groovy. That's part of the psychology of branding; people recognize the name as fashion, fun, exclusivity and they know when they buy something there not everyone will be wearing the same thing," said Stephanou.

Historically, major brands have had representation in the Plaza District with retailers like Gucci, Prada. Hermes and Tiffany's, but Downtown fashion was not the huge array of retailers it is today.

"All this happened in a period of five years, when national brands couldn't afford higher rents in Soho or the Flatiron District and that changed the complexion and character of retail, because instead of getting smaller it got bigger, with the brands who could afford to moving in," said Stephanou.

It's a growing concept that doesn't seem like it's going anywhere else anytime soon. "You can see that by the simple demand for space for more new and international brands," added Stephanou.

Added Strauss, "At the end of the day, branding translates into bigger business, not just on the retail level, but in wholesale as well, because even if the flagship store is not making high profits, having showrooms helps build the brand among the public."