Skims Pop-Up Shop in Rockefeller Center.Getty Images for SKIMS
Celebrity-driven retail was once a relatively minor trend that has now become mainstream. According to recent research, almost 60% of all retail brands were founded by celebrities in the last six years. Even Bloomberg is tracking the trend and highlighting the top celebrity brands to keep an eye on in 2024.
The frontrunner is Kim Kardashian's SKIMS, a $4 billion shapewear and apparel brand that originally launched online. SKIMS plans to open a 5,000 square foot flagship store in Los Angeles in the first half of 2024 and plans to open a second store in New York City soon after.
SKIMS now belongs to an exclusive club as, surprisingly, only 11% of celebrity brands have opened brick-and-mortar stores. However, this rarity is decreasing as more celebrities break the traditional retail cycle and opt for standalone stores rather than branded offerings or pop-ups.
Getting the clicks
The rapid development of social media has contributed to greater fascination with the lives of celebrities, with many often sharing every waking moment with their followers. This has led to huge marketing potential, as celebrities who have founded retail brands have a combined 7 billion followers on Instagram alone.
Because of their reliance on social media and influencer marketing, prominent brands can seamlessly evolve alongside an e-commerce platform, marketing and selling directly to their large fan base.
Digital sales will be supported by the purchasing power of Generation Z, which Bain and Company predicts will grow three times faster than other generations. This generation will already make up a third of the market by 2030.
But relying solely on e-commerce comes with risk. Prominent brands must contend with rising marketing and customer acquisition costs as they expand. The brands also tend to be in the more expensive categories such as clothing and jewelry, which often require a personal “touch and feel” experience.
The storefronts are being rolled out
To further increase brand awareness and personally attract new customers, celebrity brands have traditionally pursued one or two paths:
- Partner with established retailers to sell their products in physical stores. Exclusive celebrity brand partnerships include Ariana Grande's REM Beauty and Tracee Ellis Ross's Pattern Beauty (Ulta), as well as Selena Gomez's Rare Beauty and Lady Gaga's Haus Labs (Sephora).
- Open independent pop-up locations in target markets where short-term leases allow well-known brands to test the market while providing landlords with additional revenue from spaces they wouldn't normally rent out. For example, model Gigi Hadid opened holiday pop-ups in New York City and Aspen for her cashmere brand Guest in Residence just months after the brand's 2022 debut.
But more recently, celebrities have opted to open standalone brick-and-mortar stores to test the longevity of their brands. They also hope the stores will reinforce the brand's halo effect, which is when a brand's online traffic in a market increases due to the opening of a new physical store in the area.
Celebrity-backed retail brands have opened more than 300,000 square feet of space in the U.S. over the past decade – with Los Angeles being the most popular city for their first permanent location. Surprisingly, however, 75% of stores opened in the last decade were located in a mall.
With foot traffic declining, traditional retail brands have shown less interest in extending their mall leases. This creates opportunities for digitally native retailers such as Warby Parker, Allbirds and well-known brands to secure affordable leasing contracts – and for shopping centers to fill vacant spaces. Prominent brands can sign shorter-term leases, reducing their overall risk compared to traditional 10-year leases and giving them a similar opportunity to experiment as with pop-ups, but with more control.
Through physical stores, celebrities can bring their creative vision to the physical environment – resulting in immersive experiences, themed arrangements and captivating aesthetics that customers can't get online. These elements extend the customer experience and encourage repeat visits.
Today, celebrities are encouraged to share their lives, thereby piquing consumers' interest in the clothing, jewelry and other products they wear. Meanwhile, Generation Z continues to increase its purchasing power and fascination with actors, musicians, athletes and influencers. As we've seen over the last decade, the physical retail landscape will continue to evolve and may even serve as a new frontier for celebrities to continue engaging with their followers in a real-world retail environment.
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I have over 20 years of experience in retail real estate and am currently President of JLL's Retail Advisory Services division. I am responsible for the overall strategy, business development and growth of the retail advisory platform, driving our business to create effective, world-class connections and collaborations. I am client-focused and knowledgeable in all aspects of retail in the U.S. and abroad, specializing in multi-market entry strategies, site selection analysis, acquisition underwriting, portfolio optimization and divestiture strategies. Throughout my career, I have represented a diverse client base, from large retailers to apparel and lifestyle clients to global professional services companies. Prior to JLL, I served as Senior Managing Director of Retailer Services at CBRE, where I oversaw and managed all tenant representation matters for CBRE's retail division in the U.S., Canada and Mexico. I am currently Chair of the Global Retail Leasing Board, which oversees JLL's cross-border retail initiatives.
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