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A woman named Anita is waiting in front of the glass doors of the new Hennes & Mauritz store at 11th and F Streets NW. The H&M outlet held its grand opening five days before, when 200 people swarmed the sidewalk for the chance to see the store and get a free “I Love H&M” T-shirt.
Today, however, only a handful of people have joined Anita to storm the notoriously trendy retailer’s gates. The security guard pacing inside pretends not to see all the eyes that are on him. He looks at his watch, then stops. To the waiting shoppers, he mouths, “Two minutes.”
“It’s 10 o’ clock. Tell that man put ’10’ on there,” says Anita, pointing at a glass door.
The guard steps outside onto the sidewalk and pauses just in front of the entrance.
“Where do I find size 16?” Anita quizzes him. “Second floor?”
The guard smiles and puts a hand on his head. He doesn’t understand what she’s talking about.
“You better get that information,” says Anita. “People’ll ask you.”
After she saw the opening-day crowds on the evening news, Anita decided to come down and check out the new H&M for herself. Over the past few days, friends and colleagues who have been to the store have shared their impressions. Anita is especially disturbed by a rumor that the sizes only go up to 16. “I wear a 16, but that’s not going to do me justice if I put on a little weight,” she says.
Once the doors open, Anita heads for the second level, via the store’s escalator. “I’m taking the steps,” she says. “I need the exercise.”
At the top, she exhales. “Good lord, now I need a chair. Looks like I might have to go back to Hecht’s.”
Anita says she’s glad there’s something new downtown to bring people in from the suburbs. But she’s not sure if she’ll come back. After a quick survey, she begins searching for the down escalator. “They done hyped this store up, but I don’t see anything I want….be for small people, not big people. I don’t see nothing for me in here.”
“No,” she says, taking one last look over her shoulder as she heads out the door, “this is not for me.”
Anita’s experience marks a huge letdown for the space that used to house the Woodward & Lothrop flagship store. Ever since the Woodie’s building closed its doors for good, in 1995, city officials and downtown boosters have wanted the building to house a come-one, come-all department store. That is, a place whose market niche is just about everything. Perfume cases that have Jean Naté as well as Jean Patou. Women’s clothing racks that go from 0 to 22. A genuine race- and class-mixing institution to cater to Anita as well as to Britney Spears wannabes.
Yet the District’s hopes of scoring a department store to flank the downtown Hecht’s have come to naught. In 1995, the May Department Stores Co. bought Woodward & Lothrop and discarded the full-block flagship store, leaving the trademark display windows empty. Then the Washington Opera bought the building in 1996, only to put it on the market three years later when opera officials realized they couldn’t afford the cost of renovations. Developer Douglas Jemal, who had bid on the building in 1996, snatched up the 10-story behemoth for $28 million. He came close to fulfilling the city’s dream of installing another department store in the Woodie’s building, but negotiations with Macy’s executives eventually broke down in 2001.
The string of disappointments convinced District officials to give up on what was once received wisdomnamely, that the only way to re-establish the long-declining downtown as a shopping district was to place a hulking department store in the middle of it. The notion has deep roots: As far back as the ’50s, the area kept at least five major department stores humming.
H&M clearly communicates the post-department-store capitulation: The hip retailer sells only clothes and accessories for men, women, and children. No waffle irons or luggage. And it occupies only a portion of the first two floors of the Woodie’s building.
A gleaming white storefront with openings on 11th and F Streets broadcasts H&M’s presence a block away. The newly installed display windows, filled with snazzily attired mannequins and clothes suspended on wires, make the rows of dirty or absent windows above and around them look all the more forlorn. The new downtown plan calls for a succession of H&M-like chains to light those windows up.
“H&M is a line in the sand,” says Stephen J. Moore, chief marketing officer for the Downtown D.C. Business Improvement District (BID). “It’s the beginning of 36 months of incredible change.”
Many of the District residents who flock to the store in its first days come for a look at the new downtown, to figure out if they belong there. For every Anita, there is a Kareem D. Jenkins, who has made several trips to H&M since it opened. In one visit, he bought a pair of thong underwear. “It’s really hard to find a good thong,” he says.
H&M satisfies a need deeper than a hankering for tiny panties. Jenkins, a native New Yorker, says that, after three years of living in D.C., he finally feels at home. “When I close my eyes and squeeze my stomach, I almost feel like I’m in New York,” he says. “Then I open my eyes and see all the D.C. ‘Bamas.”
His two companions share his you-are-what-you-wear worldview. Rick James gushes over the store’s European-pop soundtrack. Kwesi Imani Thus says the convenient supply of mesh tanks and ruched pants produces a pleasant new sense of conformity. “I can wear a wrinkled shirt on the street and people don’t look at me funny anymore,” he says.
Thus’ only complaint is that the employees aren’t as into self-expression as he is; none of them have purple or blue hair. “Here,” Thus sniffs, “the staff look regular.”
Despite their rigorous standards, the fashion-forward trio are realists: F Streets is not Fifth Avenue. And H&M can’t overpower the blue-shirted hordes of Washington overnight. But it’s a start. “If you can’t get a ticket to go to Paris,” says Jenkins, “this is it.”
In the three years that H&M, which began as a single store in Stockholm in 1947, has been in the United States, it’s become synonymous for cheapness and trendiness. It has more than 800 stores in 14 countries and is the largest apparel retailer in Europe. Last year, H&M rang up more than $6 billion in global sales. The store crossed the Atlantic in 2000, setting up shop on Fifth Avenue in New York. Ironically, it was the stores he saw in New York just after World War II that inspired H&M’s late founder, Erling Persson, to open his first shop.
Here in the States, the chain has gained cachet as the ultimate purveyor of disposable fashion, the IKEA of urban chic. On the heels of its New York debut, H&M spread up and down the East Coast, opening outlets in Boston and Philadelphia. The rollout has had its share of glitches; the chain leased stores that were too big, sometimes stocking them with merchandise that didn’t always appeal to American consumers. H&M has yet to break even in this country, though company officials say it will by the end of the year.
The first H&M in the D.C. area opened in February to little fanfare in Maryland’s Arundel Mills shopping mall. By the summer, there were three more locations, all in Virginia: Dulles Town Center, Tysons Corner Center, and Manassas Mall. The first store in the District opened in the Georgetown Park mall in May.
H&M has managed to reel in customers without blowing its budget on television commercials. The word-of-mouth strategy grew out of practicality. “We’re not big enough in the U.S. to spend a lot of money on advertising,” says company spokesperson Steve Lubomski.
In the age of the jaded consumer, however, low-to-the-ground buzz turns out to be worth more than a TV spot during the Super Bowl. H&M engineers fine distinctions among its various outlets, and customers occasionally get exaggerated notions of the differing selections.
Take, for example, this scene at the downtown H&M: A fellow trying on pants in the dressing room turns to his confidant and says, “There’s a store in Georgetown with totally different stuff.” Everyone within earshot looks up.
The strategy of tailoring inventory to local tastes is one of the lessons the retailer learned the hard way. When the company first began expanding in this country, it filled suburban mall stores with the same merchandise as urban stores. Company executives soon discovered that suburban shoppers tended to be less adventurous than city dwellers. H&M now distributes cutting-edge lines to its city stores and caters to the ‘burbs with more classic styles. D.C. dwellers, for example, get faux-fur coats; Anne Arundelians get sweat suits.
H&M’s arrival delivers much-needed retail reinforcement for D.C. residents, who enjoy far fewer shopping options than their counterparts in the suburbs. (D.C. has about 11 square feet of retail per person, compared with about 22 square feet per person in Northern Virginia and Maryland, according to the D.C. Marketing Center.)
Even in cities, no two H&M stores are exactly alike. The Georgetown outlet, for instance, is geared toward college students. That means fewer blazers and more belly shirts.
Keeping the illusion of endless possibilities alive falls on the shoulders of each store’s visual team, who are responsible for styling all the displays inside and out.
The “visuals”as they refer to themselvesput considerable effort into outfitting the downtown store’s “Young Trend” window on F Street. (Company policy prohibits them from talking to the press.) Inspiration for the windows, which are a marked contrast to the dowdier Hecht’s displays over on G Street, comes directly from H&M headquarters in Stockholm. H&M design gurus relay their vision in fashion shorthand such as “English rose,” “’30s romantic feel,” and “urban vibe.”
For the downtown store’s first two weeks, the prompt for the Young Trend window is: “8 Mile/Boys Don’t Cry/Trailer park” the latter not being a movie but simply a state of mind.
The result looks like a diorama of a music video. It features mannequins striking various poses in front of a montage of blown-up images: a beat-up Chevy, playing cards tossed in the air, a scruffy boy in a trucker hat and a girl locked in a half-kiss, and a group photo of grungy-stylish youngsters keeping it real in a convenience store, indicated by a neon Lotto sign. The mannequins, which are supposed to be channeling Eminem and Brandon Teena, sport ski jackets, miniskirts, purple fishnets, and rainbow leg warmers.
Mike Smith, a D.C. club promoter, checks out the window on a weekday afternoon. “It’s just a bunch of uptown kids trying to look poor,” he says. “Not that there’s anything wrong with that.”
Douglas Jemal, the building’s owner, didn’t show for the Aug. 29 grand opening. But he’s been spotted around the store. “I’ve been there every day,” he says, to see how business is doing. On one such visit last week, Jemal wandered in just before the lunch rush. Holding a cell phone to his ear the entire time, he leisurely strolled through the first-floor men’s section, fingered a few shirts, then walked out a few minutes later, heading east down F Street.
Jemal doesn’t have to be a customer, though, to prove his loyalty to the store. He made a pilgrimage to the flagship store on Fifth Avenue three years ago. “I said, ‘Wow, who the hell are these guys?’” As a developer, he knew what a specialty retailer such as H&M could do for downtown D.C.
Even before he bought the Woodie’s building, Jemal was trying to convince the city that the glory days of D.C. department stores were over. As far back as 1995, he told the Washington Post, “It’s ridiculous. You’re not going to get another department store like Woodie’s; that’s an era long gone.”
The advantage suburban shopping malls have over center cities, Jemal explains, is land under the control of one owner. “Traditionally, a department store will go into a million-square-foot shopping center. The developer gives them 150,000 square feet well below market rates. [The department store] is the draw and the attraction,” he says. “In an urban environment, you don’t have another 750,000 square feet that you subsidize [the department store] with.”
From time to time, Jemal would throw out ideas for smaller-scale tenants such as the Gap or a big-box anchor such as Wal-Mart. In the end, he didn’t manage to close a deal with either one. And that was fine by city planning officials.
“There was resistance to saying to Doug, ‘Oh you can fill it with anything,’” says Ellen McCarthy, deputy director for development review and coordination of planning for the D.C. Office of Planning. “[Woodie’s] was a one-of-a-kind asset,” she argues, worth holding on to to make one last play for Macy’s. “Really, leaving it vacant and land-banking it was not a bad strategy.”
Woodie’s wasn’t the only vacancy that city officials and downtown boosters were looking to fill, though. Julius Garfinckel & Co., which catered to a more upper-crust clientele at 14th and F Streets NW, had closed in 1990; the building was still empty when Woodie’s shut its doors. District economic-development officials tried to convince Lord & Taylor to move into the Garfinckel’s site, but they “weren’t able to bridge the gap between the owners and May Co. [Lord & Taylor’s parent company],” says Frank Rich Sr., a former downtown retailer who was an economic-development aide under Mayors Marion S. Barry Jr. and Sharon Pratt Kelly.
The F Street Real Estate Co., the owner of the Garfinckel’s building, had its own plans for the site. Its leaders, like Jemal, didn’t see much of a future chasing after department stores. Local zoning officials allowed F Street Real Estate to get out of a city requirement to keep the Garfinckel’s building as a department store and let the company put in more office space, which is more lucrative. The Downtown Cluster of Congregations, led by Executive Director Terry Lynch, a believer in landing a Macy’s or maybe a Saks, challenged the zoning decision in court and tied up the building until 1996, when a court ruled in favor of the owner. The former luxury emporium, now called Hamilton Square, houses a mix of office space and ground-floor retail that includes a Borders book store and the restaurant Butterfield 9.
District officials tried laying the welcome mat for Federated Department Stores Inc. and May Department Stores Co.together the owners of most of the major department-store chainselsewhere downtown as well. In 1998, when Manulife Financial, a Canadian financial-services firm, was looking to build an office-retail complex at 555 12th St. NW, cater-corner from the Woodie’s building, the District required that the new structure include enough retail space to accommodate a department store. Manulife built it, but a department store didn’t come. The space is now occupied by the likes of the ESPN Zone, Barnes & Noble, and Potbelly Sandwich Works.
As the remaining department-store-sized spaces were being carved up, the Woodie’s building became the only site left in downtown big enough to accommodate such a giant retailer. At the same time, the space was anachronistic even by department-store standards. The building, at 10 stories, is several more floors than modern department stores use. And it needs tens of millions of dollars worth of renovations.
No department store, then, was going to move into Woodie’s without hefty incentives. For much of the ’90s, the city’s budget woes left few public officials or economic-development advocates keen on dipping into District coffers for the likes of Bloomingdale’s or Neiman Marcus.
“I remember talking to [former D.C. Council Chair] David Clarke about [tax-incremental financing],” says Merrick Malone, who in 1995 was deputy mayor for economic development. “We almost had a fistfight. I said, ‘You better back up.’ He’d say, ‘Why are we giving this money away?’ We didn’t have a whole lot of tools in our bag. The constituency for economic development is not as boisterous when you’re cutting the police force.”
Department stores held onto their constituency at Judiciary Square and the Wilson Building for good reason. They are institutions in a way that an H&M or a Gap never will be. “Cities want [department stores] because they are iconic. They send a message to the national retailing community. Other stores want to cluster around them,” says D.C. Marketing Center President Michael Stevens.
On a dollars-and-cents level, department stores are powerful magnets for consumers, no matter how drab their reputation. “They advertise regionally and extensively,” says McCarthy. “The shopping-mall owner gives away the space because the advertising generates enough foot traffic that they can charge high rents for smaller stores.”
A single specialty-store anchor, on the other hand, doesn’t generate the same number of ad pages. Whereas H&M may allot the same proportion of its sales to advertising, a store such as Hecht’s can afford to spend more because its sales volume is far greater, says Steven Wishnow, a former Hecht’s marketing executive.
McCarthy says city officials, developers, and other downtown boosters were divided on the merits of the department-store focus. “There were those [analysts] who said department stores were dinosaurs. Others said the market was looking up because we have a high concentration of female executives and workers….Hecht’s new store [which opened in 1985 at 12th and G Streets NW] was one of their best-performing stores,” says McCarthy. “Everyone was looking into their crystal ball and trying to see what demand would be in the future.”
Even Jemal gave the idea of a department store in the Woodie’s building a decent try; he came close to convincing Macy’s to move in. But after a year of negotiations, store officials balked at the level of municipal subsidy for the project. “Macy’s asked for more than was fiscally prudent for the city to give,” says Office of Planning and Economic Development spokesperson Chris Bender. Macy’s wanted incentives not only to move into Woodie’s, but to open a store in Friendship Heights. One real-estate insider familiar with the talks confirms Bender’s account: “Macy’s tried to hold up the city.”
Before Macy’s walked away from the Woodie’s building, the city struck a zoning deal with Jemal. Housing activists had badgered him for years to put housing at the old department-store site. And developers and city officials knew that retailers often cited a dearth of housing when bypassing downtown. Jemal agreed to build apartments in the 400 block of Massachusetts Avenue NW. In return, the city allowed him to transform Woodie’s into a mix of office and retail.
“Once Macy’s fell through, the continued loss from having Woodie’s be vacant outweighed the possibility of a department store coming,” says McCarthy. “We hated to use it for anything less. But it was better than have it be a drag on development.”
By the time H&M began sniffing around for land in D.C. two years ago, District economic-development officials had come around to the specialty-store-as-anchor approach. Now, it was H&M that needed convincing. When Jemal first showed H&M executives the Woodie’s site, he says, they wouldn’t get out of the car because the street was deserted. “They said, ‘What’s this? We’re not going there,’” Jemal recalls.
H&M’s representatives came back two more times. “You can’t just fly into town and understand this city,” says Jemal. He eventually sold them on Woodie’s and “the commitment I had to putting that street back together,” he says, referring to F Street. And Jemal closed the deal without the carrot of public subsidies. A veteran real-estate hand who is knowledgeable about the transaction says that the city’s biggest contribution to landing H&M was staying out of the way. Jemal says he’s talking with Bed Bath & Beyond, Linens ‘n Things, and Virgin Megastores about filling up the rest of the Woodie’s building, which is little more than a shell. The top floors are office space; the Environmental Protection Agency is moving into a portion of it.
Macy’s may still be in the picture. City officials met recently with the store’s executives about locating downtown, says McCarthy. A Macy’s spokesperson says she can’t confirm that the meeting took place or whether the department store is actively looking at sites in D.C.
Downtown observers don’t think it’s likely a deal with Macy’s is on the horizon. “Candidly, I think it’s dead,” says Jemal. All the choice spots big enough to accommodate a department store are gone, notes the Downtown BID’s deputy director, Joe Sternlieb. The old convention center site, at 11th Street and New York Avenue NW, is a possibility, but so far, neither developers nor District officials have talked about luring a department store there. “The priority [for downtown retail] is filling that first-floor space,” says Bender. “One big anchor doesn’t give people enough reason to stay downtown.”
Department stores have a couple of allies left among downtown boosters. Among them, Terry Lynch is perhaps the most die-hard. He advocated for them in the name of his ultimate priority, which is more jobs for D.C. residents. He’d still like to see a department store downtown, though he realizes the real estate is harder to assemble. “I think we gave [space] away too easily, and now we’re going to the [specialty]-anchor-store model by default.”
Lynch and others believe D.C. could have gotten a department store if its leaders had tried harder. “The city blinked when it was negotiating with Macy’s,” he says. “There was just not the right mix of politics, PR, and players such as [Wizards owner] Abe Pollin and Marion [Barry, as in the MCI Center project], or the Board of Trade initiatives, like the convention center.”
In light of his history, Lynch has embraced the new approach to repopulating downtown storefronts as much as can be expected. “H&M is wonderful. So are anchor stores like Barnes & Noble. A mix [of smaller stores] adds up to uses a department store would have,” he notes. “But it’s hard to get the right mix. Anchors can do it, if it’s done right….H&M alone isn’t going to get us there.”
Downtown revitalizationists and District officials know Lynch is right. Jemal can boast that Woodie’s is now the hottest building downtown for office and retail. But in real estate, speculation doesn’t pay until someone signs a lease. And unlike the tonier Dupont Circle and Georgetown, “downtown is not a proven market yet,” says Sternlieb.
To ensure that downtown lands a Diesel store, and not a Dollar Store, a group of downtown business interests called the Downtown Retail Committee, working with Deputy Mayor Price’s office, have crafted an incentive system for retailers. To qualify, a business has to locate in an ailing stretch of F Street, G Street, 11th Street, or 7th Street.
In July, the D.C. Council approved $30 million in tax-increment financinga device whereby the city issues bonds backed by future sales-tax revenuesto fund the program, called the Downtown Retail Incentive Program (DRIP). DRIP allows retailers to borrow a limited amount of funds to subsidize build-out costs. Sternlieb says DRIP is projected to produce $50 million in tax revenue from retail sales and payroll taxes over the next 10 years, in addition to 1,000 jobs for D.C. residents. Retailers must pay their loans back in five years. The city risks nothing. If a business goes under before it pays back its loan, the developer is ultimately on the hook for the money.
Only general merchandisers can benefit from DRIP. Restaurants and bars are out of luckmany of them have managed to move downtown without taxpayer help.
The amount of money available to a business under DRIP depends on how many points the business earns on a scorecard that the city uses. “If the District gives money to one retailer, then every retailer in the city will come asking for money,” Sternlieb explains. “So we had to come up with a system that was consistent, predictable, fair, and transparent.”
DRIP rewards high sales volume and something downtown’s retail engineers call “collateral leasing benefit,” or how attractive a neighbor a business is to other retailers. Brooks Brothers, for instance, likes to be near Ann Taylor, and vice versa. Suits beget suits. On the DRIP scorecard, being the cool kid on the block wins a business 8 points.
But DRIP’s creators know their Jane Jacobs. So they valued “uniqueness” the most. It’s worth a possible total of 11 points, whereas being locally owned is worth only two. A locally owned fine clothier that other retailers want to be near, with eye-catching displays and merchandise you can’t get anywhere else, would fetch a perfect score of 47.
“Retailers like to be near funky or unique retailers,” says Sternlieb. “It’s our way of trying to separate ourselves from the suburbs.”
On the scorecard, a business’s funk factor computes in various ways: Does it have a cool windows? How many stores are there in the area? Under these rules, the Gap racks up a big fat zero. But the category isn’t a chain-store killer. It works in favor of companies like H&M, which are just entering the D.C. market.
DRIP doesn’t do much for operations such as U.S. Jewelry, which sits around the corner from H&M on F Street. U.S. Jewelry has been in the same location on F Street for 40 years. The current owner, Lam Nguyen, bought it seven years ago. He has an in-house jewelry repairman and a steady roster of clients, including many of the jewelry stores in the immediate area. “I have a very good service for customers. My customers want to keep me,” he says. “To have a good business, you need to be here a long time and build trust with customer. If I move far away, I lose all my customers.”
In March, Nguyen says, he received a notice to vacate the premises by the end of September from his new landlord, Douglas Development, Jemal’s company. Douglas Development is partnering with CarrAmerica to transform the 900 block of F Street into a massive 287,000-square-foot office-retail complex. Nguyen says in the year that Douglas Development has been his landlord, he has yet to meet a company representative. “I never see them. They never talk to me,” he says.
So Nguyen began to hunt around for new space nearby. There was no shortage of empty storefronts. (The D.C. Marketing Center estimates that as much as 20 percent of downtown retail space is vacant.) But Nguyen quickly found out there was little room for a small business like his. He says the spaces he saw were “only for big stores.”
“The rents will go up,” admits Blake Esherick of Douglas Development. “The big deals will get done first. When those are done, I think the smaller stores will fill back in.”
Nguyen doesn’t qualify for DRIP, because he is not interested in expanding and his service isn’t unique to the area. “Because of my age, I don’t want to open a new store, so I decide to retire.”
“I’m a real-estate agent, so I know how it is,” he says. “When I close, I will send the key to [Douglas Development] by certified mail. That’s it.”
Other merchants around H&M are in less dire straits than Nguyen. Many, having survived the dark days that followed the Woodie’s closing, are hoping to stick around to see the building fully reoccupied.
Jane, a vendor of bags and incense, has worked the corner of 11th and F since 1986. Until last year, she had a booth on the sidewalk right in front of H&M. But when renovations on the building began, she and her partner were forced across the street, in front of a Popeye’s chicken franchise. She’s in negotiations with the city now to see if they can return to their former spot.
So far, H&M isn’t having much of a trickle-down effect. “I haven’t seen an impact yet. Hopefully by the end of the month,” says Jane. “We’re praying for more customers.”
Saturday evening, an ambulance is parked on the corner of 11th and F Streets NW, outside the H&M store. Peggie Shuler lies on a gurney. Her eyes are closed as emergency workers lift her into the back of the ambulance and close the doors.
Shuler had complained of chest pains before heading out from her Suitland, Md., home for the Metro. She lay down for a while, then had something to eat. She seemed well enough to make the trip into town with her daughter Sh’Tia Shuler to check out the new store.
The Shulers were on the second floor of H&M when Peggie announced that she couldn’t see Sh’Tia and couldn’t hear her. A store clerk called for an ambulance, and within minutes Ambulance No. 16 from the Franklin Square firehouse pulled up curbside.
As emergency workers check Peggie’s vital signs inside the ambulance, Sh’Tia paces the sidewalk, cell phone pressed against one ear.
After about 15 minutes, the ambulance doors swing open. Emergency workers roll out Peggie, who is still lying on the gurney. Only this time, her eyes are open. Looking much better than she did a few minutes ago, Peggie gets up without assistance. “I’m OK,” she says, waving off the emergency technicians.
“You was sweatin’!” says a family friend who tagged along.
Sh’Tia relays the news home that her mother is fine. Then she and Peggie turn toward the store. Holding hands, mother and daughter march back inside. CP
Art accompanying story in the printed newspaper is not available in this archive: Photographs by Pilar Vergara.