Givenchy Drops $25M For Early Exit At Madison Avenue Flagship
Givenchy is leaving its ritzy retail location on Madison Avenue seven years early, paying millions for the right to do so.
LVMH, Givenchy’s parent, is paying $24.5M to landlord Wharton Properties to be able to terminate its lease at 747 Madison Ave. in 2022, despite it being set to expire in 2029, Commercial Observer reports, citing Tel Aviv Stock Exchange documents.
The $24.5M figure included a $15M fee for rescinding the original contract plus $9.5M prepaid rent up until March 2022. From then, LVMH is free to leave with 60 days notice, and the landlord in turn can terminate its lease with the same amount of notice. The lender on the property, JPMorgan Chase, agreed to the terms, and the store is expected to keep running until March 2022.
It is yet another development that points to a rapidly shifting retail landscape in the city. Direct ground-floor retail availability hit a new high of 254 spaces across the 16 prime retail corridors in Manhattan, according to a CBRE retail report released this month. Asking rent hit dropped 13% year-over-year to $659 per SF in the third quarter.
The uncertain outlook at falling rents is starting to make its mark on values. Akris, a Swiss clothing retailer, paid $45M for three retail properties on Madison Avenue this month, The Wall Street Journal reported, marking an 80% drop from the peak of the market in 2014.
LVMH is exiting the property as talks have resumed in its $16B takeover attempt of Tiffany's, with the French conglomerate expected to get a $425M discount to its original takeover agreement, Bloomberg reports.