FOR DECADES, WEALTHY TOU
rists and transplants in Miami Beach bought their Chanels, Gucci, Cartiers, Diors and the like at one place: Bal Harbour Shops.
Last year, the International Council of Shopping Centers described it as the single most productive shopping center in the world.
But recently a string of big-name tenants -- Louis Vuitton, Hermès, Cartier and others -- have abandoned Bal Harbour for a scruffy city neighborhood 10 miles away. Names like Valentino and Giorgio Armani are expected to follow.
Their destination is the Miami Design District, once an enclave of furniture showrooms in the shadow of two interstate highways. There, real estate developer Craig Robins is engaged in a $1 billion effort to transform the neighborhood and crack Bal Harbour's hold on luxury purveyors.
The fight comes as affluent shoppers have returned to stores, especially in Miami, a popular destination for moneyed foreigners from Latin and South America.
"This is the third-largest luxury market in the United States and there was this remote, inaccessible, beautiful mall that controlled 100 percent of the market share," Robins said.
Bal Harbour has kept its cachet through lease clauses and its relatively small size, which has left merchants wanting more.
Emmanuel Perrin, the president and chief executive of Cartier North America, said Miami has tremendous potential as a retail center. Since leaving Bal Harbour, it has increased its retail footprint markedly.
To jumpstart his vision, Robins's firm, Dacra, entered into a partnership with private equity fund L Real Estate, whose investors include LVMH, one of the premier luxury companies in the world. Its labels include Celine and Louis Vuitton.
For several years, he quietly bought up property in the neighborhood at attractive prices then created pedestrian plazas, luxury condos, restaurants and parking garages.
"I believe Miami is a two-location market and I want to be one of them," Robins said.
One big prize was Hermès.
"When I met Craig Robins and he presented his vision of what the Design District could become, I was really convinced from the first minute that he started talking," said Robert B. Chavez, the president and chief executive of Hermès of Paris.
Hermès closed its 4,300-square-foot Bal Harbour boutique after its lease expired last December and plans a flagship store to open in the district in 2015, with 13,000 square feet and a rooftop garden.
The Whitman family, which owns Bal Harbour, is meanwhile fighting back with its own expansion plan.
Earlier this month, it filed to expand Bal Harbour by 250,000 square feet.
"We are responding to the needs of the marketplace, and what our tenants tell us they need, which, in two words, is more space," said Matthew Whitman Lazenby, the president and chief executive of Whitman Family Development, the parent company of Bal Harbour Shops.
The Whitmans have also entered into a partnership with a Hong Kong real estate company for a new project in downtown Miami's financial district called the Brickell CityCentre. There, they will develop 600,000 square feet of retail space.
"All signs in our mind absolutely pointed to Brickell," he said.
"It has for a long time been the Wall Street of the South. It is where Latin America does its banking. It has a healthy reputation for being a solid business tourist destination."
But Robins, who helped South Beach become trendy two decades ago, says he wants to turn the Design District into more than a commercial destination.
Even tenants choosing Bal Harbour, like Laure Hériard-Dubreuil, chief executive and founding partner of The Webster, a high-end labels boutique, say good things about the Design District.
"I think it's a really amazing project," she said. "I think the more the merrier."