You will find many many FAKE designer bags and clothing on the street. Anyone who tells you they bought a "real" designer bag on the street is either lying or fooling themselves!

SoHo is fantastic for boutiques, and the Prince St/ Broadway Area has lots of chain stores as well. H&M is great for cheap well-designed clothing. Mango is also good. Intermix and Scoop (also in the SoHo area) are great for smaller designers.