Hermes, Tiffany, Gap, Banana Republic, and Bruno—Profiting From The Current Trend In Panama
“I didn’t just wake up one day and think, ‘Well, wouldn’t it be nice to build a hotel in Panama City?’
“There’s more to it. There are bigger-picture reasons I’m here in Panama right now.”
Our friend Bruno, originally from Milan, Italy, was speaking over lunch on Friday. Bruno has enjoyed a hugely successful four-decade-long career as a global property developer, developing hotels, condominiums, and commercial space in Europe, the United States, and Latin America. We met Bruno three years ago, when he’d recently turned his attention to Panama.
You might say that Bruno’s timing wasn’t ideal. Three years ago, in 2008, Panama City’s property market was beginning what would amount to about a 25% decline over the coming three years. Bruno was aware of the shifting market at the time. He knew, like everybody, that not only the property market in Panama City, but many worldwide were set for falls.
But Bruno, as he explains, takes a big-picture view. Over his 40+ years as a global developer, he’s seen property markets cycle before. Looking around the globe last decade, Bruno noticed Panama. It stood out for him because, as he reminded us on Friday, it has something the whole world needs and is going to continue to need looking as far ahead as anybody can look–the Panama Canal.
Bruno’s not the first one to make this observation, of course. This isthmus has been a trade hub as long as folks have been trading. Since before it was Panama. Since before it was part of Colombia (as it was from 1821 until 1903). Since before, even, it was part of Spain (1538–1821). The difference today is that it’s easier than at any time in this little strip of land’s history for a trader to come and go with his goods. And it’s going to get easier still when the Canal expansion project is completed and even bigger ships will be able to pass through to get from one coast of the Americas to the other.
As a result of its geography and its tradition of trade, everybody comes to Panama. North Americans, Europeans, Asians, and Latinos. The big guys take their container loads through. We little guys shop for electronics, clothing, and luxury items that, notably, are much harder or even impossible to find in most of the rest of Latin America.
This was the real point of Bruno’s insight last decade. Being from Italy, Bruno has connections there, including in the fashion world. He knew that those in the fashion world, including one Italian designer in particular that he knows well, are interested in doing more business in Latin America. They see this is as an important growth market.
Bruno thought of Fashion Week in Paris. And he conjectured that a Fashion Week would work in Latin America, too. But what would be the regional equivalent of Paris?
Now, Panama City isn’t Paris. I know. I’ve lived in Paris. But in the context of Bruno’s conjecturing, I understand the thinking. Everyone in the fashion biz in Europe, indeed everyone in fashion worldwide, is happy to come to Paris for the annual weeklong trade show. Those in fashion in the Americas, Bruno thought last decade, would be happy to come to Panama City to do business in the same way.
Because it’s a hub. A trade hub and a travel hub. Because it’s increasingly the place all Latin America comes to shop anyway. As it becomes more and more difficult for Latinos to get visas to travel to the States, fewer and fewer of them make their traditional annual shopping expeditions to Miami and New York. Instead, they come to Panama City.
Panama City now boasts four big U.S.-style shopping malls. The highest end of these, MultiPlaza, features a wing dedicated to all things luxe, from Hermes to Tiffany, from Cartier to Jimmy Choo, from Ferragamo to Ralph Lauren. And it’s not only luxury-level shoppers from around Central and South America who seek out Panama City in ever-greater numbers. It’s more typical shoppers, too. Gap and Banana Republic have noticed this, evidently, for they are opening new stores here in February 2012.
Hermes, Tiffany, Gap, Banana Republic, and Bruno. They all see the trend.
Bruno doesn’t do retail. He does hotels. And he has connections in the fashion world.
What if I built a five-star, luxury-level hotel, unlike anything Panama has seen to this point, in the heart of the city…and then worked with my fashion world connections to develop Latin America’s answer to Fashion Week in Paris? That’s what Bruno thought to himself a few years ago.
If he could do this, Bruno thought, not only would his hotel tap into the growing high-end executive traveler market emerging in this city, but it would enjoy the added occupancy from the fashion muckety mucks who’d stop by for the trade event each year.
That’s what Bruno is doing. Speaking as a woman who likes to shop, I look forward to the end result.