Hamptons Hope for an End to the Seasonal Store

Summer resort communities have a challenge when it comes to maintaining a vibrant town: how to retain their local character when the population surges with an influx of visitors, then avoid feeling like a ghost town when those part-time residents head home.

 

In the Hamptons, that pattern has been compounded in recent years by retailers who have followed their customers’ migratory habits, appearing for the summer season and closing up shop once the autumn leaves start to turn — and sometimes replacing year-round stores.

 

“This past winter, we had eight or nine vacancies in the core business district of East Hampton,” said Judi Desiderio, president of Town & Country Real Estate, which has eight offices on the East End of Long Island. “That is an enormous amount of vacancy.”

 

East Hampton in particular has experienced an increase in seasonal stores, primarily national and international retailers who test the waters with a summer lease — and often do not return.

 

Hermès, Balenciaga and Gucci are among the high-end brands that have come and gone, yet other luxury retailers continue to find East Hampton a draw: this summer, the shoe designers Stuart Weitzman and Sam Edelman and the clothing line Lacoste have opened stores downtown.

 

Much like residential rentals, the commercial market shifted to shorter-term leases during the recession, a trend agents expect to cool as the economy improves and landlords hold out for more favorable terms.

 

“It is a completely different year versus a year ago,” said Hal Zwick, the director of commercial real estate at Devlin McNiff Real Estate in East Hampton, adding that prices for long-term leases were up 25 percent compared to last year.

 

“We’re not out of the woods yet,” Mr. Zwick said. “But we have the beginning of a recovery.”

 

Agents say commercial leases for prime locations in East Hampton peaked above $200 per square foot at the height of the market, and $100 per square foot in Southampton.

 

This year, Mr. Zwick said, prices for multiyear leases range from $110 to $140 in East Hampton, and $70 to $75 in Southampton, with other villages like Bridgehampton and Sag Harbor closer to $50.

 

Although prices have declined, paying $100 a square foot for a 1,000-square-foot store still adds up to rent of $100,000 for the year, which can be daunting to earn back when the prime shopping season is just three months.

 

“There’s a huge difference in profitability between a retailer who’s paying $90 a square foot and $200 per square foot,” said Roger Blaugh, a vice president at the Corcoran Group in Southampton. “The real offset to expenses is how much you can sell.”

 

For retailers, foot traffic is central to raising those sales numbers, and various factors affect where people walk and how late into the evening they stroll. East Hampton stores benefit from having a movie theater in the center of Main Street’s business district, brokers said, whereas Southampton’s movie theater is on the edge of town.

 

Yet Southampton is credited with rejuvenating its commercial strip by allowing restaurant owners to put tables on the sidewalks, keeping the town lively even after sunset. Store owners say being on the sunny side of the street, near a restaurant or close to the main drag can also affect how many people walk through the door.

 

Billy Lawson, who owns 10 Shoe-Inn stores in the Northeast with his wife, Melissa, said they moved their East Hampton location to a new building this spring, just 100 yards away from their old store on Newtown Lane, but closer to Main Street and its busy pedestrian traffic.

 

“Even though East Hampton is a very small town with two streets, we were at the end of the street and people didn’t go that distance,” Mr. Lawson said. “It’s only 100 yards, but it’s literally night and day for us.”

 

When the Lawsons first opened their store in East Hampton, they were on Main Street for 10 years, but they lost their lease when Ralph Lauren decided to expand and took over their space, Mr. Lawson said.

 

That is a situation many smaller retailers have faced as real estate prices have risen in the Hamptons and landlords have sought higher rents.

 

“It’s the national retailers who will pay more money,” Mr. Zwick said. “Everybody would love all mom-and-pop shops, but the reality is they cannot afford the rent.”

 

Charles DiSapio, the owner of Country Gear, a home furnishings store in Bridgehampton, said if he had not bought the building where he opened the business in 1982, he would not have been able to keep up with rising rents.

 

“I couldn’t afford to be here,” he said. “I’ve seen a lot of stores go out of business because they didn’t own their building.”

 

On the restaurant front, real estate agents said there had been an unusual degree of turnover this year. After nearly two decades in East Hampton, Della Femina closed in May, replaced by the East Hampton Grill, owned by the Hillstone Restaurant Group.

 

Notable openings include a Nobu restaurant at the Capri hotel in Southampton, and Ruschmeyer’s in Montauk, a hotel, restaurant and bar by the team behind the Surf Lodge in the same town.

 

Ms. Desiderio said East Hampton could benefit from allowing more restaurants on Main Street, which are tough to open because of restrictions on establishments that serve food or drinks and that limit even coffee shops and ice cream parlors.

 

“I think we as a community have to find a way to embrace commerce again,” she said. “I’d love to see our goal be wanting people to linger.”

 

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Copyright © 2011 The New York Times Company. Reprinted with Permission.