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Sincerely,
Linda Curtis & Brian Rodgers
Stop Domain Subsidies
512-535-0989
Luxury sellers flock to Austin
TERI AGINS The Wall Street Journal
AUSTIN - This is the year high-end retail discovered Austin. Although Dallas and Houston have long tended toward gowns and spangles, this intellectual hub has had a jeans-and-T-shirt reputation. But now, as new technology wealth comes to town and the local charity-gala circuit booms, Austin has become one of dozens of U.S. cities undergoing a fashion and luxury-goods makeover.
This year, some 30 high-end retailers have opened boutiques in Austin, including Tiffany & Co., Michael Kors, Ralph Lauren, David Yurman, Louis Vuitton and Burberry. These names - the vast majority represented in Austin for the first time - are among the retail tenants of a $250 million shopping and residential complex, Domain, that Indianapolis-based developer Simon Property Group opened in March. Neiman Marcus, which has exclusive rights to sell Chanel and other labels in Austin, is the anchor tenant.
As the U.S. gets richer, more people outside the traditional fashion strongholds of New York and Los Angeles are lining up for designer labels and accessories. The country's affluent have traditionally splurged on homes, cars or jets, but only recently have wealthy Americans developed enough of a taste for pricey fashions to support a coast-to-coast industry.
"We consider the U.S. the biggest emerging market for luxury goods," says Andrea Guerra, chief executive of eyewear giant Luxottica Group SpA. This month, the company is launching a chain of boutiques in the U.S.
For luxury companies, such expansion carries risk. Many luxury-goods marketers have already blanketed the big cities, so they have little choice but to seek growth in smaller markets. But by doing so, they may erode the impressions of exclusivity and scarcity that have been responsible for much of their allure.
Austin typifies the newest preening of America. As high-tech jobs have brought in money and wealthy transplants from other parts of the country, the city's society scene has been supercharged. Where there were a few black-tie events each year in the 1990s, now there are scores.
Earlier this decade, the city added two monthly society magazines, Brilliant and Tribeza, that document balls, fund-raisers and other society events with color photos.
As Austinites pay more attention to what they wear for the cameras, retailers are paying more attention to Austinites. "Cities that come up on our radar have many black-tie events," says Karen Katz, president of Neiman Marcus Stores, a division of Neiman Marcus Group Inc.
Andrea McWilliams, 35, is seeing people dress up like never before. For years, fashion-minded Austinites shopped at By George, a boutique that carried some European and U.S. designers, and at Last Call, a Neiman Marcus outlet, where they bought marked-down designer labels. McWilliams says she did most of her shopping on business trips to Dallas.
Simon Property Group, which operates six other malls in the Austin metropolitan area, targeted this city for its Domain project for its wealth and high-fashion spending, says Richard Sokolov, Simon's chief operating officer. The city of Austin also granted tax incentives totaling about $37 million, including sales- and property-tax rebates, over 20 years.
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