Paloma Wool
Case Study: Paloma Wool - From Pop-Up Pioneer to SoHo Flagship
The Challenge: No Track Record, No Problem
When Barcelona-based Paloma Wool approached me in 2022 about opening their first permanent flagship in New York, they had a unique problem. This husband-and-wife team (Paloma and Pau) had built a cult following through their innovative "Paloma Wool World Tour" – pop-up experiences that would appear in major cities for weeks before vanishing, creating intense anticipation and exclusivity.
But when it came to securing prime SoHo real estate, their ephemeral success story meant nothing to landlords. No US retail history. No traditional financial statements. No proven sales per square foot metrics. Just passionate customers and an unconventional business model that Manhattan landlords couldn't evaluate using standard criteria.
The Solution: Let Results Do the Talking
Instead of asking landlords to take a leap of faith, we created our own proof. We structured three progressive pop-up experiences at 425 Broome Street, each building on the previous success while generating concrete data for landlord presentations.
Pop-up #1: Proof of concept. Lines around the block, inventory selling out faster than projected. We documented everything – foot traffic, conversion rates, transaction values, demographics.
Pop-up #2: Refined the experience and validated their unique sales model. Rather than traditional browsing, Paloma Wool assigns each customer a personal concierge who brings selected items in their sizes. This personalized approach drove impressive metrics while creating an elevated experience.
Pop-up #3: Undeniable pattern established. Each activation exceeded goals, creating a compelling narrative of consistent growth. We now had data forecasting sales per square foot that would comfortably support the $250 PSF asking rent.
The Deal: Creative Structure for Mutual Win
Armed with performance data, we proposed a lease structure that acknowledged both Paloma Wool's proven success and their need to manage fixed costs during the transition from pop-up to permanent retail.
The Structure:
Base rent slightly below asking rate
Percentage rent kicking in above agreed thresholds
Landlord delivers space with all electrical/mechanical work at her expense
Minimal free rent period
This approach gave the landlord confidence in base rent plus upside participation, while providing Paloma Wool manageable fixed costs and reduced capital requirements. The landlord's infrastructure investment leveraged her contractor relationships and streamlined the buildout, while the short free rent period demonstrated Paloma Wool's commitment.
The Result: Redefining SoHo Retail
The 4,600 square foot flagship at 425 Broome Street has exceeded every projection.
The space features dramatic floor-to-ceiling windows – among the largest in the Cast Iron District – creating an almost gallery-like atmosphere that perfectly complements Paloma Wool's artistic approach.
The store regularly draws lines around the block. The personalized concierge model, initially seen as risky in fast-paced New York, has become the store's most celebrated feature. Customers frequently comment on the elevated service experience, proving that maintaining brand identity rather than adapting to local conventions was the right strategy.
Key Lessons: Strategic Validation Over Speculation
Progressive Validation Works: Rather than asking for faith, we provided evidence. This approach required patience but resulted in stronger negotiating position and sustainable relationships.
Creative Structuring Solves Complex Problems: Aligning interests through percentage rent and shared infrastructure investment created true partnership. The landlord gained a successful, high-profile tenant enhancing building value; Paloma Wool established their flagship without excessive risk.
Preserve Brand Identity: Paloma Wool's New York success stems from maintaining their innovative retail experience, not adapting to local conventions. Our role was supporting their vision, not changing it.
The flagship's success has opened doors for expansion discussions and provided credibility that would have taken years to build through traditional channels. It demonstrates the power of strategic thinking, creative problem-solving, and calculated risk-taking in pursuit of exceptional outcomes.
Photos courtesy of Paloma Wool