“You can’t think of your property as just a mall. Think of it as the intersection of life,” said Michael P. Glimcher, chairman and ceo of Glimcher Realty Trust, which develops and operates mixed-use, open-air, enclosed and outlet centers including The Outlet Collection/Jersey Gardens in Elizabeth, N.J. “Mix things you do with things you buy,” Glimcher advised. “It’s about how you complement the Internet, providing things the Internet can’t provide, not so much how you compete with the Internet.”
“The biggest challenge is figuring out how to take advantage of this omni opportunity,” observed Mike Kercheval, president of the International Council of Shopping Centers. “Simple things like putting free Wi-Fi in shopping centers, most consumers have come to expect. Simon Property Group was an early adopter.” A better trained and compensated sales force would also help malls compete with the Internet, Kercheval observed, adding that salespeople are notoriously underpaid.
Answers, according to developers, real estate and retail experts contacted in the past week, lie in coming up with fresh, trendier anchors; making the space entertaining and experiential beyond traditional shopping needs, and embracing categories, services and amenities the online world can’t provide. That means adding spas, workout clubs, facilities for yoga and exercise classes, health clinics, concierges, staff to carry packages to where shoppers are parked, theaters, concerts and downsizing the traditional food court to bring in higher-quality restaurants, groceries, coffee bars, wine bars, tea salons, nail salons, bakeries, “fast casual” restaurants, organic and health food establishments.
It’s also about narrowing the focus and less about trying to cater to everyone’s needs. As notions of anchors and smaller tenants are changing, traditional department stores are giving way to specialized concepts with smaller footprints. Among those cited as high on the wish lists of developers are Trader Joe’s, True Food, Uniqlo, Sprouts, Athleta, Free People, Desigual, Michael Kors and Tory Burch, as well as those nameplates that have been around longer and remain firmly popular, like Apple, Whole Foods, Lululemon, Sephora, Tiffany’s and Dick’s Sporting Goods. “Dick’s sells a lot of outerwear and active apparel from such brands as Nike and The North Face. It’s not all about bats and balls,” Glimcher noted.
Among other trends gaining momentum:
• Developing pockets in urban markets that lack groceries and better retail, be that Queens, Brooklyn or Harlem in New York or growing Hispanic markets in California or Texas. “Mercados,” or markets catering to Hispanics, are springing up. “Developers are finding they can make money retailing in some of the those urban underserved markets,” Kercheval said.
• Bringing a higher grade of retailing to subway systems. In New York, that’s currently happening around the Union Square and Columbus Circle subway hubs.
• Downsizing or opening smaller stores as brick-and-mortar retailers increasingly meet product requests from consumers in the stores with online fulfillment. That means malls themselves should be smaller.
• Adding omni-type services in the malls. Simon Property Group Inc. uses Shopkick to reward shoppers with electronic coupons for walking into its malls; General Growth Properties Inc. rolled out a home delivery program, in partnership with a third-party service.
In the spirit of being open to innovate, developers, retailers, real estate brokers and consultants, in the thousands, will be attending the ICSC’s annual New York conference Dec. 9 to 10. Kercheval believes the mood will be good. Preregistration is running ahead of typical years, with 5,000 registered as of last week, compared with 3,000 to 3,500 typically. The event is being held at the New York Hilton & Towers and the Sheraton New York & Tower, although with registration and the demand for booth space both growing, next year’s conference will be at the Jacob K. Javits Convention Center in Manhattan.
“There is an energy and enthusiasm spreading across the retail industry,” Kercheval said optimistically. “We’re looking at a better than 3.5 percent gain for holiday sales, possibly 3.7 percent. If we miss it, it will be because we’re too low. When we did our forecast, we did not anticipate gas prices would go down. Entering into this calendar year, we didn’t think it was going to be terribly strong. We were concerned about the payroll tax increase, the international situation, the Middle East, sequestration, the government shutdown. Everything looked like it was not going to be very good. But stores have managed inventories very well and we’ve been surprised at every turn by the resilience of shoppers. Things are actually picking up going into this holiday season. The traffic continues to be strong and retail sales continue to be positive and growing. Seasonal retail jobs are up 2 percent over 2012, to over 900,000.
“Also, we are hearing customers are not going to wait as much to do last-minute shopping. They will be spending early on and strong, rather than weak and rush at the last minute. Procrastinators will have a problem,” finding what they want. “They will be disappointed if they wait.”
On the traditional development front, “Nothing new is being built,” Kercheval acknowledged. “It’s all existing product — how to redevelop it and reposition it. One of the trends across the country is recognizing that a mall is not successful if it’s everything for everybody. Today, that’s being done on the Internet. Increasingly, successful real estate properties are finding a niche, defining themselves as luxury brand destinations, or family destinations, or for food and entertainment.”
“Malls are challenged, but people with jobs are still shopping but for other things, for entertainment and for food,” said Faith Hope Consolo, chairman of Prudential Douglas Elliman’s retail leasing and sales division. “Mall owners are looking for more diversified food concepts, restaurants and marketplaces, more wine bars, sweet shops. Forget food courts. Food is fashion.”
On the other hand, outlets are continuing to be developed, in places like Staten Island, N.Y.; Laredo, Tex.; St. Louis and Phoenix. “What’s really interesting is that outlets are coming closer to the cities, where presumably full-price stores are located,” said Consolo.“The word on the street is that Nordstrom Rack is already committed to Staten Island,” where an outlet center on the waterfront, next to a Ferris wheel that would be the tallest in the world, is proposed. “Saks Off 5th is also fighting for position.”
“Number one, everything is about bringing in quality, especially with A- and B-plus malls. They are really focused on re-merchandising to go for quality,” observed Andy Graiser, copresident of A&G Realty Partners, which works with brands and retailers on maximizing their real estate assets, including acquisitions, dispositions, due diligence, lease renegotiations and lease renewals. “Number two, we are starting to see mall guys shelve some C- and D-level real estate, and put their time and efforts into better quality real estate. That’s creating opportunities for other types of developers to create multiuse environments and reconfigure some space.”
Jennings suggested creating stronger adjacencies by concentrating retailers of like categories in the same vicinity. “From the perspective of layouts, department stores have been creating children’s worlds and men’s worlds. Shopping centers need to do the same. If a customer wants to buy kids wear, she wants to shop a big kids area in the mall.”
Jennings said the Victoria & Alfred Waterfront in the historic heart of Cape Town’s harbour, is a must-see model for the future. It’s become among South Africa’s most popular destinations, with sea and mountain views, eclectic shopping and entertainment options, offices, a hospital, hotels including a former prison that converted to the Breakwater Lodge, and luxury apartments. It concentrates together stores that specialize in a certain category, so for example, kids apparel and toys and everything else to do with kids is in one area; women’s in another area. “It just makes easier shopping,” Jennings observed. “Shopping center managements have got to think like retailers, about entertaining, creating that theater.”
Rx for Reinventing Malls
• Offer services, categories and amenities the Internet can’t.
• Rethink the food court for greater culinary experiences.
• Re-merchandise to focus on changing lifestyles, emerging categories and hot retail brands.
• Make it experiential, with special events, concerts, spas, yoga classes.
• Downsize traditional retail space as online fulfillment grows.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye