Furniture retailer West Elm to close store in downtown Washington

Home furnishings retailer West Elm will close its downtown Washington store next month, less than three years after opening to much fanfare in the historic Woodward & Lothrop building.

Developer Norman Jemal, who negotiated the original deal, said the trendy clothing chain Forever 21 will occupy the space instead. The chain originally planned to lease only the 25,000 square feet next to the furniture store but decided to take the additional space once West Elm signaled it would leave, Jemal said. Forever 21 is slated to open between late spring and early summer.

"I don't view this as a negative in any way," said Jemal, who directs leasing for Douglas Development. "One store is closing, a more dynamic and hotter retailer is opening."

Douglas Development spent an estimated $100 million renovating the famed Woodies building, which was left vacant when its namesake department store chain went out of business in 1995. The ornate building -- a former home of the Washington National Opera that spans about 500,000 square feet, bordered by 10th, 11th, F, and G streets NW -- is now one of the cornerstones of the revitalized downtown shopping district. Its tenants include Madame Tussauds wax museum as well as the H&M and Zara clothing chains.

At the time the West Elm store opened in August 2007, it was the biggest of the fledgling furniture chain's locations; at 38,000 square feet, it was about double the size of its location in Tysons Corner Center. The store arrived at the tail end of the housing boom, and anticipated demand failed to materialize as housing prices plummeted and the recession gripped the region.

"It's not surprising given what's happened in the broader residential marketplace," said Richard Bradley, executive director of the Downtown Business Improvement District. "I think they're very much a victim of the broader economic trends."

Bradley said he has heard more positive reports from West Elm's neighbors. Forever 21 is one of a handful of retailers that have opened stores aggressively during the recession, relying on low prices and a high fashion quotient to reel in shoppers. The chain also has begun experimenting with larger, department-store formats that include men's and children's clothing.

West Elm received $4.9 million in tax-increment financing from the District when it opened. Under the program, the city promised to repay Jemal part of the cost of helping build the store over 10 years through sales tax revenue generated by West Elm. The status of that program was unclear on Tuesday.