Shreve & Co. losing Union Square store in namesake building
San Francisco’s booming real estate market, which has led to the displacement of nonprofits, artists and longtime residents, is now set to oust one of Union Square’s oldest and most storied retailers.
Shreve & Co., the high-end jeweler that moved into 200 Post St. in March 1906, a month before the earthquake and fire, has been unable to renew its lease, said Lane Schiffman, the company’s managing partner and co-owner. Schiffman’s, the Greensboro, N.C., jewelry store chain that bought Shreve & Co. in 1992, is looking for a new home near its Union Square address, he added.
New York jeweler Harry Winston will move into the space in the Post Street edifice that is named the Shreve Building, according to Union Square real estate sources.
“You know the market right now — it’s wild,” Schiffman said. “We worked exceedingly hard to negotiate to stay, but the market conditions have been exploding and the timing for our renewal invited a lot of competition. It’s a tough place to maintain your position.”
Schiffman said he would like to find a
space larger than the 4,300 square feet the jeweler now has. Shreve, which also has stores in Portland, Ore., and Palo Alto, employs about 50 workers in San Francisco, where it has been since 1852.
“One thing you can count on in San Francisco is the rent going up,” Schiffman said. “The most important thing to know is that Shreve is a fantastically healthy fine jeweler with basically no debt. We are very strong and will transition to new space and be better than ever.”
Rents at Union Square are at an alltime high, and vacancy rates are at an all-time low.
Less than 2 percent of retail space in the area is available, and rents at buildings on the square have climbed above $700 per square foot, with prime locations off of the square pushing $500 per square foot. Luxury retailers are offering “key money” to current tenants — essentially paying big money to buy the terms left on existing leases.
International brands
The tight market and astronomical rents are chasing out regional or national retailers in favor of international companies, for whom the Union Square address is as much about marketing as day-to-day trade, according to brokers. Within a block of the Shreve Building are Bulgari, Loro Piana, Christian Dior, Gucci, and Cartier. Other retailers to sign recent deals include Dutch menswear store Suitsupply, Belgian designer Maison Martin Margiela and British couturier Alexander McQueen.
“The shift that you are seeing is that — unfortunately as was the case with Shreve — many of the local and regional retailers are losing out to the international brands,” said Kazuko Morgan, a top retail broker.
“The displacement of Shreve from its namesake building shows that even the most iconic San Francisco businesses are vulnerable to the unsparing economic forces reshaping our city,” said Mike Buhler, executive director of San Francisco Heritage.
“Architecturally and symbolically, Shreve is San Francisco’s jewelry store,” he said. “It is the quintessential ‘legacy’ business if there ever was one.”
‘Just like Gump’s’
Julie Taylor, a retail broker with Newmark Cornish & Carey, compares Shreve’s situation to that of Gump’s, a landmark home furnishing business which in 1994 was forced to move a block down Post Street after failing to reach a deal to stay in the building it had occupied since 1909.
“Shreve’s will find a new home, just like Gump’s found a new home 20 years ago,” she said. “It is not uncom- mon, even for a heritage business, to have to shift a block or two to capture its home for the next 100 years.”
Shreve and Gump’s are “small companies relative to these global luxury brands,” which makes them that much more valuable, Taylor said.
“People care about that. When you are a tourist from wherever, and you come to San Francisco, you don’t want to see the exact same thing you see on every other ultra-chic street around the globe. You want to see something that is local,” she said. “Any local independent that lasts 100 or 150 years is best in class. Otherwise, they wouldn’t still be around.”
Schiffman said Shreve will remain at the corner of Post Street and Grant Avenue until “well into” 2016, adding that the 110 years at the site have been “magical.”
A plaque on the side of the 11-story building reads: “It was here that Shreve & Co. exhibited the 720 carat Yonkers Diamond, the jewelry of Catherine the Great of Russia, and created the State of California’s coronation gift to Queen Elizabeth II.”
“It is one of the last remaining buildings that exists from that era, which makes it a special place,” said Schiffman. “At the end of the day, we are excited to move to a new facility that will be appropriate for the next 160 years.”
No signs of slowing
Meanwhile, CBRE retail broker Laura Sagues said that there is no sign tenant interest in Union Square is cooling off.
“There is no lack of tenants in the market who are not just kicking tires but looking to make a deal,” she said.