Savills Cuts High-End Retailer Derek Lam’s Occupancy Costs by 35% With Perfect New Location
Derek Lam International, LLC (“Derek Lam”), a high-end women’s fashion company, was located in SoHo at 10 Crosby Street across two floors. Derek Lam’s business was growing having recently launched a second clothing line. In addition, Derek Lam’s lease was due to expire in 18 months at the point Savills was engaged to help resolve their long term needs as well as their short-term growth.
Derek Lam’s floor plates at 10 Crosby Street were long, narrow and inefficient. Savills quickly determined that by relocating to a single floor with a more efficient floor plate, Derek Lam could continue to grow their business without the need for increasing the size of their space. Additionally, Derek Lam needed to keep out-of-pocket costs associated with a potential relocation to an absolute minimum so that they could continue to fund their retail expansion. Over the course of the next 12 months, Savills identified over 50 potential relocation alternatives throughout Manhattan and toured over 30 buildings that could accommodate Derek Lam’s requirement. Eventually, Savills began negotiating with three different relocation alternatives and began leveraging each against the other.
Savills uncovered the ideal alternative at 105 Madison Avenue a solution, that allowed Derek Lam to house its entire operation on a single, more efficient floor plate while reducing their overall footprint. Additionally, Savills negotiated a favorable rent and leveraged the other relocation alternatives to convince the landlord of 105 Madison Avenue to build the space with no out-of-pocket cost to Derek Lam. Instead of a “building standard installation”, Savills arranged for the landlord’s architect and project manager to inspect Derek Lam’s installation at 10 Crosby Street and required that the landlord agree to replicate the installation in order to secure them as a tenant. Ultimately, Savills was able to reduce Derek Lam’s occupancy costs by 35%.