Podcast Summary: Fashion People – "Stores: What Are They Good For?"

Episode Information:

• Title: Stores: What Are They Good For?
• Release Date: June 6, 2025
• Host: Lauren Sherman, Puck Correspondent
• Guest: Jonathan Schley, Global Retail Real Estate Advisor at Newmark
• Description: In this episode, Lauren Sherman engages in a deep conversation with Jonathan Schley about the evolving role of physical stores in the fashion and luxury industries. They explore how real estate strategies have transformed over the past two decades, the impact of social media, the importance of foot traffic, and the future challenges facing luxury brands.

Introduction

Lauren Sherman opens the episode by sharing insights from her recent experiences at the Global Fashion Summit in Copenhagen, emphasizing discussions around environmental, social, and corporate governance (ESG) within the fashion industry. She hints at an upcoming interview with Veja co-founder Sebastian Kopp, highlighting the ongoing discourse about the meaningfulness of sustainability and corporate values in the industry.

Guest Introduction

[02:13] Lauren Sherman:
"Today with me on the show is Jonathan Schley, a global retail real estate advisor at Newmark."

Jonathan Schley introduces his role, detailing his work with fashion and consumer product brands in North America and globally. He explains that his approach goes beyond traditional real estate brokerage, involving strategic planning and market penetration to align with brand objectives.

Evolution of Retail Real Estate in Fashion

Lauren and Jonathan delve into how the relationship between real estate and the fashion industry has transformed over the last 20 years. Jonathan notes the shift from localized, isolated decisions to more cohesive, globally aware strategies influenced by media and social platforms.

[09:53] Lauren Sherman:
"How did it work in like the 90s and the 2000s with real estate? And how did the development of conglomerates change the dynamic for luxury real estate over the past 20 years?"

[16:00] Jonathan Schley:
"Real estate and brand strategy has always historically been a very locally focused effort... Now, with social media, there's significantly more visibility into day-to-day operations, necessitating uniform and cohesive strategies."

Impact of Social Media

Jonathan highlights the pivotal role of social media in shaping real estate strategies. The ability to create Instagrammable stores has become a cornerstone for attracting foot traffic and enhancing brand visibility.

[17:12] Jonathan Schley:
"The biggest factor at play is media, specifically social media. It has fundamentally changed how strategies work together."

They discuss iconic examples like Acne Studios' highly Instagrammed store in 2013, illustrating how social media can drive both exposure and foot traffic, albeit with varying impacts on actual sales conversions.

Foot Traffic and Conversion

The conversation shifts to the importance of foot traffic in modern retail. Jonathan explains that while foot traffic is still vital, its significance varies by brand and geography. For luxury brands, mere visibility often doesn't translate directly to sales.

[19:46] Jonathan Schley:
"It’s less important for luxury brands in terms of conversion. More foot traffic doesn't necessarily mean more sales unless there is sufficient dwell time."

He emphasizes that maximizing dwell time—how long customers stay in-store—is more critical for converting visits into sales.

Luxury Brands and Real Estate Strategy

Jonathan discusses how luxury conglomerates like LVMH have altered their real estate approaches by acquiring prime locations to create concentrated brand presences. This strategy allows them to control the retail environment and enhance brand exclusivity.

[30:19] Jonathan Schley:
"Luxury groups are buying more real estate to create singular density in desirable areas, which can sustain a high level of critical mass and control the retail environment."

Lauren references LVMH's strategic flexibility in leasing versus buying, highlighting their CFO's stance on maintaining openness to both options based on economic evaluations.

Mixed-Use Developments

The duo explores the rise of mixed-use developments, citing successful examples like Chelsea Market and Westside Provisions in Atlanta. These spaces blend retail, dining, and creative offices to create vibrant environments that encourage longer visits and repeat engagement.

[34:48] Jonathan Schley:
"Mixed-use developments like Chelsea Market blend retail with creative spaces and dining, effectively increasing dwell time and creating engaging environments for consumers."

He contrasts these successes with ambitious projects like Hudson Yards, questioning their scalability and alignment with local consumer behaviors.

Consumer Behavior and Store Strategy

Lauren and Jonathan examine how consumer behavior has evolved, particularly in the context of digital versus physical shopping. They discuss the necessity for brands to adapt their in-store experiences to remain relevant and compelling.

[49:55] Jonathan Schley:
"Retail is the best place to own your customer journey. Controlling aspects like staffing, design, and storytelling are crucial for maintaining brand integrity and customer loyalty."

They note that while online shopping offers convenience, physical stores provide unique opportunities for brands to engage customers on a deeper, more experiential level.

Challenges in the Luxury Industry

The conversation turns to current challenges facing the luxury industry, particularly the decline of the Chinese market—a significant consumer base for many luxury brands. Jonathan expresses concerns about brands' ability to articulate their value propositions amidst shifting market dynamics.

[55:13] Jonathan Schley:
"I’m concerned that many luxury brands can’t clearly articulate what they’re selling or doing, which jeopardizes their ability to maintain customer loyalty."

Lauren adds that luxury brands need to innovate and perhaps redefine their strategies to stay relevant in a post-pandemic world where traditional customer bases are shifting.

Conclusion

Lauren and Jonathan conclude by emphasizing the necessity for the fashion and luxury industries to adapt to changing real estate and consumer landscapes. They underscore the importance of creating meaningful in-store experiences and maintaining flexibility in real estate strategies to navigate future challenges.

[65:29] Lauren Sherman:
"Jonathan, this was so fun. I love chatting with you always. It's good that we do have similar taste."

[65:38] Jonathan Schley:
"You're the best. Have a great weekend."

Notable Quotes:

• Lauren Sherman [02:13]:
  "Weird, but an original look at what's really going on inside the fashion and beauty industries."

• Jonathan Schley [09:53]:
  "Real estate and brand strategy has always historically been a very locally focused effort."

• Jonathan Schley [19:46]:
  "It’s less important for luxury brands in terms of conversion. More foot traffic doesn't necessarily mean more sales unless there is sufficient dwell time."

• Jonathan Schley [30:19]:
  "Luxury groups are buying more real estate to create singular density in desirable areas, which can sustain a high level of critical mass and control the retail environment."

• Jonathan Schley [34:48]:
  "Mixed-use developments like Chelsea Market blend retail with creative spaces and dining, effectively increasing dwell time and creating engaging environments for consumers."

• Jonathan Schley [49:55]:
  "Retail is the best place to own your customer journey. Controlling aspects like staffing, design, and storytelling are crucial for maintaining brand integrity and customer loyalty."

• Jonathan Schley [55:13]:
  "I’m concerned that many luxury brands can’t clearly articulate what they’re selling or doing, which jeopardizes their ability to maintain customer loyalty."

Conclusion

This episode of Fashion People offers an insightful exploration into the symbiotic relationship between retail real estate and the fashion industry. Through Lauren Sherman and Jonathan Schley’s engaging discussion, listeners gain a deeper understanding of how physical stores continue to play a crucial role in brand strategy, customer engagement, and the evolving landscape of luxury retail.