Popular brands like Baggu say high customer demand prompted them to open a store in Chicago

Small groups of shoppers stroll along the Gold Coast on a sunny, warm Friday evening, darting in and out of the upscale shops on North Rush Street. Among the shoppers are 17-year-old Ariel Brown and Katherine Peck, friends who traveled from the Milwaukee area to Glossier’s Chicago headquarters.

Known for its makeup and skincare, the Glossier store at 932 N. Rush St. has attracted customers from around the world since opening in April 2023. While the pair are casual users of the brand, they have purchased a fair few Glossier products and appreciate the warmth of the Chicago space.

“I think the aesthetic (of the store) is nice and I know they have good quality products,” said Brown, who bought Balm Dotcom, the beauty brand’s most popular lip balm, for $16, which she has been buying since middle school.

Stores like Glossier, streetwear brand BAPE and jewelry store Studs, as well as the opening next month of a reusable bag company called BAGGU in Wicker Park, are giving hope to a Chicago retail market still recovering from the pandemic.

The city’s retail market “remains in balance,” according to a report by real estate research firm CoStar. The vacancy rate is 4.8% and asking rents rose 0.7% in the third quarter. Growth in the market will depend on new construction activity, the report said.

Cushman & Wakefield said Chicago remains attractive to retailers looking to open stores because it is home to numerous Fortune 500 companies, including United Airlines and McDonald’s, and the city has a large number of high-income households.

“If incomes are high, that means people are spending money, so that’s attractive to retailers, restaurants and others,” said Chris Bobowski, senior director at Cushman and Wakefield.

The city’s growing economy, diverse workforce with graduates from universities like the University of Chicago and Northwestern, and accessibility are also attracting other companies to relocate, expand, or open. For example, construction is underway on the James R. Thompson Center, where tech giant Google will set up its Chicago headquarters, and a number of tech companies have set up shop in the West Loop.

The popularity of some affluent neighborhoods has become a driving force for businesses, as each attracts pedestrians, and the Magnificent Mile, Gold Coast and West Loop districts continue to attract apparel retailers.

Glossier isn’t the only retailer to open a store near the affluent Gold Coast. In June, Japanese streetwear brand BAPE opened its first Chicago store at 113 E. Oak St., the company’s fourth U.S. location after New York, Los Angeles and Miami.

Studs, an ear piercing studio and jewelry brand, also opened its first Chicago store last year at 1165 N. State St. in the Gold Coast. The area was a prime location for the audience they wanted to serve.

“The Gold Coast made sense for us to start with because we thought there was really good foot traffic there and it would be a good location for the brand. We also found a location that we liked from an economic perspective,” said Anna Harman, CEO of Studs.

Bobowski said the Gold Coast has historically been a prime location for luxury retailers and “because of that reputation, other retailers want to be nearby.”

But the focus isn’t just on Chicago and downtown. According to CoStar, demand for retail space continues to shift toward suburban and urban residential areas. An example of that shift is pop superstar Rihanna’s lingerie brand, Savage X Fenty. The brand opened its first Illinois store at Orland Square Mall in Orland Park earlier this summer.

A number of retail stores have opened at the Fashion Outlets of Chicago in Rosemont, including the first Midwest location of luxury brand Alexander McQueen.

Jamie Bourbeau, vice president of leasing at Macerich, owner of Fashion Outlets, said he has 27 stores under construction this year and next, or nearly 100,000 square feet, like Vuori and Marc Jacobs. And foot traffic and sales are higher than they were before COVID.

“I would say we’re stronger than we’ve ever been,” Bourbeau said. “A lot of these brands don’t have a huge portfolio of outlets, so they’re really just focused on flagships — maybe one in the East, one in the West, one in the Midwest, to cover the whole country.”

But competition is fierce, with availability in Chicago’s suburban and urban markets being low at 5% to 6%, according to CoStar.

“Many suburban shopping centers have very low vacancy rates, which makes it difficult for retailers to open stores in many of these shopping centers. Retailers looking for larger spaces will find few other options in Chicago,” Bobowski said.

In Wicker Park, BAGGU announced plans to open its first Chicago store at 1639 N. Damen Ave. It will be the brand’s fifth brick-and-mortar store, joining locations in California and New York.

The brand has a loyal following thanks to its recent popularity on TikTok, where fans can rave about its nylon bags in a variety of shapes and colors, with prices ranging from $12 to $78.

Stephen Stananhan, head of retail at BAGGU, said Wicker Park makes sense because the 60647 area code has the largest number of customers who buy their products.

“Putting roots down makes sense for a few reasons. First, it’s our third-largest market at baggu.com after New York and Los Angeles, and we felt we could better serve them by opening a physical store where they could shop and experience our brand firsthand,” Stananhan said. “I wanted to make sure our store was easily accessible to those customers, because they’re the ones who made this expansion possible.”

West Lawn resident Paola Juarez, 28, is looking forward to visiting the new BAGGU store to browse the range of colors and styles with friends.

“Sometimes when you look at them online, the colors can seem lighter or darker, and when you receive them, it can be confusing,” Juarez said. “I’ve loved BAGGU since they started posting and have always supported them. My friends and I are ready for them to open up.”