Microsoft Corp.’s first retail outlet opened in Scottsdale Fashion Square Thursday, a week after Barneys New York launched its ninth flagship at the high-end mall near Phoenix.
This story first appeared in the October 26, 2009 issue of WWD. Subscribe Today.
The software giant’s long-awaited brick-and-mortar store — which follows the success of rival Apple stores — is ultramodern in design and covers 7,000 square feet in The Macerich Co.-owned shopping center.
The store features an enormous video wall, as well as customization areas for hardware. Merchandise includes laptops, software from Microsoft and other companies, Xbox gaming consoles and accessories, Windows phones, Zunes, computer accessories and fashion accessories such as laptop bags.
“One of the things we’re really focusing on is personalization,” said Kim Stocks, Microsoft’s director of corporate communications. “The fashion items will also play into that.”
Microsoft’s plans for a retail presence have been watched closely over the past year since the Bellevue, Wash.-based software company hired David Porter, a 25-year Wal-Mart veteran and former DreamWorks executive, to develop retail locations. A second store will launch in Mission Viejo, Calif., later this fall.
Last week, the 60,000-square-foot Barneys opened in a new anchor wing of the shopping center that includes 100,000 square feet of retail space for some 20 shops such as Forever 21, True Religion, Christian Audigier and a new Banana Republic concept store.
The mall now covers about 1.8 million square feet. The developer is playing to a mix of luxury- and value-oriented fashion tenants. Existing tenants include Carolina Herrera and Ferragamo. An H&M unit will open next year.
The openings come as retailers, mall owners and other commercial landlords are looking for signs of life from consumers.
“We have suffered during the economic downturn, but so has everyone else,” said Steve Helm, Macerich assistant vice president of property management. “When the housing market was really booming then fell out, our home furnishing stores took a big sales hit, so we had to anticipate that and backfill the spaces.”
Analysts who cover Macerich and other real estate investment trusts said an upscale center with a tenant mix like Scottsdale Fashion Square’s should fare well even in the challenged market.
“Clearly, having development come online in the current market is not at all ideal,” said Alexander Goldfarb, associate director of equity research for Sandler O’Neill + Partners. “That said, Scottsdale Fashion Square is clearly a dominant center in that regional market. Will it take its lumps like other retailers? Yes. But when the market does turn and people resume shopping, they will be in a very good position.”