LAS VEGAS — Developers are breaking ground — but it's the ground on which they've already built.
It's a matter of necessity with a weak U.S. economy, rising costs, little room left in the country to start up completely new projects, flattening rents and the shutting of retail doors, which leaves landlords with vacancies to fill.
The "intensification" or "densification" or "organic growth" of existing shopping centers, as executives call it, is the top priority in a nation that's overstored, overmalled and in an economic malaise.
And that means finding, then rolling out, new retail formats for selling fashion, and redeveloping tired and underutilized space with food and restaurant offerings that go beyond the traditional food court menu. It also means adding entertainment features, such as theaters and parks, as well as hotels and office and residential space.
"Intensifying the use of property is certainly the major innovation," said John Bucksbaum, chairman and chief executive officer of General Growth Properties, the nation's second-biggest developer, during an interview at last month's International Council of Shopping Centers annual convention here.
At the Cottonwood Mall, in Holladay, Utah, near Salt Lake City, for example, "we've put a lot of emphasis on offices and residential growth," Bucksbaum said. "That's a mall being de-malled." The conventional enclosed mall will reopen in 2010 with a mixed-use format for fashion shops, cafes, restaurants, a specialty grocery, a cinema, condos, town houses, cottages, single-family homes, offices, streets for strolling, riverside trails and a public plaza.
GGP also has an aggressive program to bring farmers' markets to its properties. "Maybe it's time for food to come back to shopping centers," said Alexander Berman, senior vice president at GGP, during one of the convention's panel discussions.
"You need to give people more choices," said Scott Schroeder, vice president of marketing and communications for Developers Diversified Realty. "Nobody wants to make eight stops to get what they need." He noted that the performance of certain specialty retailers and smaller "junior" anchors was an ongoing concern for the industry. "The more we can create a hub that combines value and fashion, the more appeal we have and the more customers we will retain.""Isn't it time to reevaluate one-stop shopping?" asked Ian Thomas of the Vancouver-based Thomas Consultants, who moderated a panel on international growth.
The one-stop notion is an old format with renewed relevance as mall traffic wanes and gas prices spiral.
In Phoenix, Macerich is studying the addition of two residential towers at the Biltmore Fashion Park, a highly productive open-air center, and in Scottsdale, Ariz., it's looking at putting residential or office space on the site of a former Days Inn in Scottsdale Fashion Square, another upscale center. Macerich is moving forward with a number of projects in the West, including the Oaks Mall in Thousand Oaks, Calif., which will open in phases beginning this fall. The firm also is taking the roof off Santa Monica Place and overhauling the 30-year-old center to integrate it more with the coastal community.
"We are taking a fresh look at projects and asking, is there a demand for other mixed uses?" said John Genovese, executive vice president for development at Macerich. "We take a very patient approach. We want to do the right thing for [our] assets."
"Providing a sense of the outdoors is very important," said Robert Taubman, chairman, president and ceo of Taubman Centers, in describing an industry trend. In one of the few new projects going up, Taubman is developing the mixed-use City Creek Center in downtown Salt Lake City with a retractable glass roof over much of its 700,000 square feet of retail. The project is massive, with 1.4 million square feet of offices planned, along with a Marriott Hotel and a 50,000-square-foot Harmons grocery store, among other features. The project is being done in conjunction with the Church of Jesus Christ of Ladder Day Saints, at a cost sources put at around $2 billion, including $60 million for the roof.
Los Angeles developer Rick Caruso said, "Our main goal is to make the shopping experience feel different and feel special," noting that, at his Americana at Brand center, there are uniformed elevator operators and fountains with water displays choreographed to music. "Even the rest rooms are opulent. When the novelty wears off, we'll introduce new stores, we'll do something spectacular."Caruso's planned Shops at Santa Anita, slated for 2010, will take the outdoor-village concept one step further, with opulent residences and horse-drawn carriages at the center.
The other big trend is going global. That expansion is happening faster than ever, with Russia, India, the Far East and Eastern Europe prime targets. "The shift to the global focus has rejuvenated the shopping center industry," stated Rene Tremblay, president and ceo of Ivanhoe Cambridge and the outgoing chairman of ICSC, in a keynote speech. "Shopping center development has continued to thrive around the world, though less in North America. In North America, not many new spaces are being built. I never would have imagined the day when we would be doing business in 12 countries."
But there is a big dilemma in going overseas. Can the developers lure the retailers abroad? Macy's and Lord & Taylor revealed that they're interested in exploring overseas opportunities, and Saks Fifth Avenue already has two stores operating in the Middle East, announced a third there recently, has one in Mexico and is planning another in Shanghai.
However, "any department store has difficulties translating across boundaries," said J.C. Penney chairman and ceo Myron Ullman 3rd, who was on stage at the convention for a Q&A. "It's easy to announce international expansion. It's much more difficult to make it work for shareholders." RETAIL CONCEPTS TO WATCH
According to Taubman executives, Victoria's Secret, Apple and Abercrombie & Fitch are the three most desired U.S. specialty chains in overseas markets. Internationally, Inditex and its Zara chain and Hennes & Mauritz are the best poised for further expansion.
At home, developers said they're closely watching the expansion of Japanese fashion retailer Uniqlo, which opened its first U.S. store in November 2006. Safeway's new concept, called The Market, a 20,000-square-foot box for produce and prepared food and a service deli, is also on the radar, as is Gilly Hicks, the intimate apparel chain launched by Abercrombie & Fitch last winter.
Other retail nameplates of keen interest are Metro Park; Forever 21, which is looking to open larger footprint stores (for more details, see page 16); J. Crew and its two-year-old Madewell division, as well as the even newer VSX, a shop selling activewear and yogawear that was launched by Victoria's Secret in a single site in Easton, Ohio, last year.
Another newcomer from the West Coast, called Love Culture, is gathering steam. The chain has seven stores operating, five under construction, 15 set for next year and another 20 seen for 2010. It's privately owned and sells women's moderate-to-better-priced fashion.
Two chains that have been around for awhile, but continue to impress developers are Puma and Apple.
At ICSC's "hot retail" session, in the food category, Five Guys Burgers and Fries, Pinkberry, Pollo Campero and Stir Crazy took the honors, and women's fashion retailer Apricot Lane, board sports chain Billabong, Tesco's grocery concept Fresh & Easy, L.L. Bean and toy car retailer Ridemakerz were also honored as the best.
"We've seen a lot of innovation in new retail, even with the apparel retailers, which is not easy to do," said ICSC president and ceo Michael Kercheval. "It's great to see, but more importantly, it's imperative in order to keep shopping centers new and interesting."
At other sessions, developers at the conference cited Costco, Wal-Mart and Target as highly desirable tenants in a down economy, largely because of their pricing and their grocery offerings, which have fared well, and the new view that they can be neighbors to upscale stores in the same centers. Westfield Group, for example, will house Target as well as Neiman Marcus as anchors this year in its Topanga center near Los Angeles' San Fernando Valley. DDR has a Costco anchor in its Christown Spectrum Mall in Phoenix, and in the fall, Macerich will open its first in a former Macy's at Lakewood Center, one of the largest enclosed malls in the Los Angeles area. Other mall-based Costcos are in Simon Property Group's Potomac Mills in Prince William, Va.; General Growth Properties' Cumberland Mall in Atlanta, and the Cafaro Co.'s Spotsylvania Towne Centre in Fredericksburg, Va.
"The lines are all blurred. The days of saying we won't or can't do a mix don't fly now," said Anthony Buono, CB Richard Ellis' executive managing director of retail services. "Your Target customer is the same as your Nordstrom customer is the same as your Saks customer."
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast