LAS VEGAS -- From an alliance between store owners and interactive TV shopping to the prospect of slot machines adding their bells and whistles to those of cash registers, fanciful visions of futuristic retailing were conjured here last...
LAS VEGAS -- From an alliance between store owners and interactive TV shopping to the prospect of slot machines adding their bells and whistles to those of cash registers, fanciful visions of futuristic retailing were conjured here last week.
It was the annual spring leasing convention of the International Council of Shopping Centers and it brought 21,000 retailers, developers and investors to this desert city where fantasy, fortune and failure are all equal partners.
The mood at the four-day conference, which ended Thursday and was held at the Las Vegas Convention Center, was a mix of confidence and caution. Many retailers and developers agreed that the economy is rebounding, but others warned that the retail field is overdeveloped and will become more competitive than ever.
Publicly, executives here discussed industry issues; privately, they were making deals for new store locations. The dramatic decrease in shopping center development in the past few years has apparently not dimmed the enthusiasm for deal-making. Indeed, the most lasting image of this year's convention might well be a developer or retailer pacing the corridors of the convention center, spelling out details of a deal to the home office over a cellular phone.
Following are some of the convention highlights.
Many retailers here predicted that a developed interactive home shopping industry was 10 years away, and some said that could be a part of their overall retail store strategy. Leslie Wexner, chairman and chief executive officer of The Limited Inc., said shopping center retailers could use computer technology to get consumers into the stores.
"I think there's a wonderful opportunity for stimulating retail marketplace sales by using the media," said Wexner. "So, for somebody sitting at the end of their PC, I think I will be able to figure out how to say, 'Come to the store; if you come here something good will happen to you or you will get some benefit.' I don't necessarily have to be the victim."
The smokeless mall is a growing trend. The ICSC predicts that at least one-third of the nation's 1,800 enclosed malls will be smoke-free by the end of the year. The Simon Property Group said all of its 70 enclosed malls will be smoke-free by July 1. In Arkansas, all nine regional malls banned smoking in public areas as of May 14.
Bernard Brennan, chairman and ceo of Montgomery Ward, criticized President Clinton's proposed health care overhaul. Brennan, who also is chairman of the National Retail Federation, argued that the President's proposal to have employers pay for much of the costs for their employees' health insurance would have a "devastating" affect on retailers and developers."The bill represents the single biggest challenge we have ever had in our combined industries," Brennan said.
Shopping center developer Melvin Simon predicted that in 20 or 30 years, many retail projects will be tied to gambling. He said as municipalities legalize riverboat gambling and casinos, stores will be built around them.
One of Simon's most lucrative shopping centers, the Forum Shops at Caesar's Palace, is such an example, although Simon did not mention it. Connected to the Caesar's Palace casino and Las Vegas strip, stores such as Warner Bros. Studio Stores and Gianni Versace sit among slot machines and "talking" water fountains.
Shopping centers will have to provide more entertainment to attract consumers of the future. Simon attributed part of the success of his Mall of America outside Minneapolis to an amusement park, theaters and other attractions that bring people to the mall for primary reasons other than shopping.
For example, a working mother might have to choose between going to her child's Little League game and going shopping. The solution is to "bring the ball game to the mall," he said.
Wexner observed that shopping itself used to be adequate entertainment, but today's consumer needs more than just product to be entertained. Some of the most successful retailers will be those that go against the obvious trends that others are following, he said.
Some executives heralded the rebound of department stores. During one seminar, aggressive expansion plans at J.C. Penney and Federated Department Stores were discussed.
Penney's plans up to 20 new full-line stores and 10 smaller ones, said Michael Lowenkron, vice president and director of real estate. And Federated, said Gary J. Nay, vice president of real estate, plans 10 new units this year, including the rebuilt unit at Cutler Ridge, Fla., that had been destroyed by a hurricane.
But others questioned whether this expansion, and plans for new centers, is too much, considering the overstored retail climate.
Philip Ward, senior managing director and head of real estate investments for CIGNA Investments, said aggressive plans for growth in the current economic environment are foolish.
"The whole industry has not read the demographics of the U.S.," Ward said. "I don't think there's enough growth in the U.S. economy to handle the new developments, the redevelopments and new retailers. We're still an industry that's so focused on market share and growth. It's just not there. We're running the risk of hitting the wall again in the next five to seven years if we're not careful."
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