ADAPT OR DIE: Caruso Affiliated founder and chief executive officer Rick Caruso isn’t backing away from statements he made at the National Retail Federation convention in January declaring the end of the typical American mall. “I talked about the death of the indoor mall and I felt and I still do that in 10 to 15 years the indoor mall is going to die. It’s a historical anachronism. There’s just no place for it,” he said Tuesday at real estate conference RealShare Los Angeles. The difference between the around 15 properties in Caruso Affiliated’s portfolio and most indoor malls, he stressed, is the experience his properties provide. “I’m in a commodity business. Anything you buy at The Grove, The Americana, The Commons [at Calabasas], you can buy anywhere else in the city, so how do I get someone to bypass all of those other stores and come shopping with us?” he said. “It’s the experience.” Overall, though, Caruso emphasized he foresees “a bright future for brick-and-mortar retail,” just not for retailers that don’t understand connecting with the consumer.
“The problem with Sears’ growth and their business plan right now isn’t online hurting them. The problem is they are not really good at what they do,” said Caruso. “My example is they built the tallest building in the world and, even at that vantage point, they never saw Wal-Mart coming.”
This story first appeared in the March 26, 2014 issue of WWD. Subscribe Today.
Caruso Affiliated, which has reported 20 percent compounded annual growth, has set out to create its differentiated experiences at a few more properties. It is in escrow on 2.77 acres in the tony L.A.-area community Pacific Palisades and is looking to build on 48 acres in Carlsbad, Calif.
In other Caruso Affiliated news, the company has appointed Judy Johnson chief marketing and communications officer. Before joining Caruso Affiliated, Johnson spent 17 years at communications firm GolinHarris in various capacities.