Japanese Retailer Likes Bay Area Urban Cores

By Sharon Simonson

A Japanese retailer whose brand image echoes American society’s current quest for a more sustainable lifestyle is opening a 7,000-square-foot store in downtown San Jose, its second West Coast outlet.

Muji U.S.A. Ltd., which sells household items and apparel, champions lower pricing by adopting cutting-edge product development and design, progressive use of materials and minimalist decoration and packaging, the company says.

In July, Muji announced its first West Coast store in San Francisco at 540 9th St., a location on the western fringe of the gentrifying South of Market district, near the Mission, Potrero Hill and Showplace Square neighborhoods.

Both the San Jose and San Francisco locations are near existing and rapidly expanding numbers of apartments. The San Francisco store, which is to open in November, will be the company’s fifth U.S. location; the other four are in New York City. The San Jose Muji is expected to open next year.

The retailer will bring much-needed new momentum to the South Bay’s only large-scale metropolitan center, said Ann Marie Larocco Joel of Ritchie Commercial, who represented both Muji and the landlord, Imwalle Properties Inc., in the transaction. “It’s a milestone for downtown San Jose retail,” she said. “They are absolutely awesome.”

Muji could have located anywhere including San Jose’s Santana Row and Westfield Valley Fair, the retail, restaurant and residential juggernaut roughly three miles from downtown and a steep competitor to downtown’s merchants and restaurants. Instead they came downtown because “they are urban and chic, and they wanted Class A retail space,” she said.

The site is located on the first floor of the San Jose Fairmont Hotel, facing South First Street and the Paseo de San Antonio. The paseo is a four-block pedestrian walkway that connects the landmark Cesar Chavez Park on the west to San Jose State University on the east. It begins at the Fairmont and links apartments, condominiums and parking to street-level restaurants, entertainment, shops and the San Jose Repertory Theatre.

The downtown San Jose selection echoes Muji’s other locations in San Francisco and New York City, said Don Imwalle Jr., president of San Jose-based Imwalle Properties, which bought the Fairmont retail space from the former San Jose Redevelopment Agency. The retailer approached him about the site, and he has negotiated with them over the last several months.

“I think they want to stand apart,” Imwalle said. “Their store in San Francisco is not on Union Square. They have a very distinct product, and they pride themselves on selling something that is different from everyone else.”

“My sister is an interior designer, and she knew them straight away,” he said.

He believes the downtown San Jose’s highrise apartment and condominium dwellers offer fertile ground, Imwalle said. Muji’s designs are intended to appeal to the Japanese consumer, who typically has a small living space.

The location is adjacent to a local light-rail station, and the transit line connects directly to thousands of apartments being built on North First Street close to state Highway 237.

Downtown San Jose also is adding housing. Simeon Residential Properties is expected to formally announce its intent to build a highrise apartment building a few blocks from the Muji location near San Pedro Square. Russell Pitto, chairman of San Francisco-based Simeon told The Registry in July about the company’s plans, and San Jose Mayor Chuck Reed said Oct. 12 that he expected the city to receive a permit application the following week to develop a $100 million residential tower downtown. “The council reduced the taxes, fees and red tape specifically for downtown to get someone to move,” he said.

In addition, last year, the former owners converted the 213-unit high-rise housing tower called 360 Residences from condominiums to apartments, then sold the property to a long-term institutional investor.

In San Francisco, hundreds of new apartments are being built close to the Muji location. Swinerton Builders expects to complete 418 apartments at 1190 Mission St. at the end of June for Angelo Sangiacomo and his Trinity Properties and is working to secure the work for a third apartment tower next door. Another 463 apartments are being built by Essex Properties Trust Inc. at Folsom and 5th streets.

Muji follows fellow Japanese retailer Uniqlo into the Bay Area retail fray. Uniqlo opened a 29,000-square-foot Union Square shop at 111 Powell St. on Oct. 5. The company identifies the store as its “San Francisco flagship” where it will embrace design and technology including 91 rotating mannequins, nearly 80 liquid crystal display screens and a virtual dressing room for customers.

Photo courtesy of Known Gallery

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