USA’s Leading Men’s Online Store Differio Explores Expansion in NJ

New York City harbors today’s largest fashion market in the U.S. booming with over 900 fashion companies and generating more than $15 billion in annual sales, according to a fashion report by the New York City Economic Development Corporation (NYCEDC).


From SoHo’s designer boutiques to Fifth Avenue’s flagship stores, these thriving five boroughs are where both tourists and locals seek out some of the world’s most coveted brands and events.


Over sixty Fortune 500 companies have established their headquarters in the New York metropolitan area alone – the highest volume of Fortune 500 companies based within a U.S. city, as reported by USA Today.


Although New York City is an optimal locale for retail stores and corporate offices within the tri-state area, it’s not nearly as efficient for obtaining and expanding industrial warehouse space, which is indispensable for the operation of any fashion e-commerce company.


The Wall Street Journal reported that in just the last five years it has already lost millions of square feet for industrial development to live-work space. What remains are outdated buildings unsuitable for operating productive e-commerce distribution.


According to data by Statista, revenue for apparel and accessories in the U.S. is expected to reach over $138 billion by 2022. More importantly, nearly 25 percent of U.S. leasing is related to ecommerce, according to Cushman & Wakefield.


With over 8 million people crowding 302 square miles of land, New York’s fast-growing e-commerce businesses are forced to find warehouses on the other side of the Hudson River in New Jersey.


New Jersey is among the top six states with the “the greatest growth in new industrial development” that also includes California, Texas, Illinois, Georgia, and Pennsylvania, as stated by the National Real Estate Investor.


Gucci was one of New Jersey’s largest industrial transactions last year, which involved leasing 437,500 square feet of industrial property in Wayne, as reported by the Commercial Property Executive.


Furthermore, Differio – leading online multi-brand menswear store based in New York City – recently began exploring warehouse spaces throughout both northern and southern areas of New Jersey.


Net-a-porter, The RealReal, Rent the Runway, and Adore Me are several other fashion e-tailers with fulfillment and distribution centers across Bergen and Hudson County.


North Jersey is a particularly convenient region for New York-based companies to consider warehouse expansion since it’s still within a reasonable distance from their metropolitan headquarters.


However, the CBRE reported that both Northern and Central Jersey have some of the highest warehouse development land prices, making it a less desirable region for industrial expansion.


As a result, more e-commerce businesses are considering warehouse spaces in counties further south that aren’t hit with high leasing prices due to its close proximity to New York City.


Dan McGovern, Vice President of CBRE’s Mount Laurel office, explained to the Burlington County Times, “What was always up (in northern New Jersey) now has pushed down into Burlington County…The cost to do business in Burlington County is less expensive than the warehouses at (turnpike) exits 8, 10 and 12…The rates climb very quickly as you get closer to the ports and New York…Burlington still has affordable and available land.”


Differio may also consider outsourcing a third-party distribution center, which would also pose as an efficient alternative without the long-term warehouse lease.


Jimmy Chrabieh, CEO of Differio, is outweighing the company’s expansion plans from all angles. He explains, “We’re working on finding the optimal distribution center that’s cost effective and provides speedy deliveries in a flexible region. New Jersey is among one of several locations we’re currently negotiating, but the priority ultimately lies in finding what’s best for the growth of Differio.”