A TRIO OF RECENTLY OPENED SHOPPING CENTERS HAS TRANSFORMED THE RETAIL LANDSCAPE OF DALLAS.
Byline: Holly Haber
It’s getting cutthroat in Big D. Three shopping centers opened last summer, including a huge high-end mall, in a metropolitan area that is already dense with stores.
“We have a lot of retail square footage — more than the average city — and I don’t know that there is necessarily the demand for this new footage,” said Brad Forsberg, partner in charge of the retail practice at Andersen Consulting. “Will there be some fallout? There could be.”
But this is also a place where shopping is still akin to sport, and developers are optimistic about their prospects, given the affluence of the neighborhoods surrounding their sites.
Close to the downtown skyline, West Village and Mockingbird Station are two mixed-use centers that combine specialty stores with loft-style apartments and multiplex cinemas. But the biggest splash was made by The Shops at Willow Bend, a mammoth 1.5 million-square-foot shopping center that opened Aug. 3 on the North Dallas Tollway in Plano, an affluent suburb that seamlessly abuts Dallas on its north side.
“We thought it was one of the great markets in America,” said Bill Taubman, executive vice president of Taubman Co., which built Willow Bend. “The growth has been unbelievable out there — quite astounding — and that’s why we got the stores to sign that we did.”
Taubman said his company started looking into the area at the request of executives at Neiman Marcus, who were looking to revitalize or replace the retailer’s unit at Prestonwood Town Center, a dying mall on the northern edge of Dallas on Interstate 635 LBJ Freeway.
As with its other properties, Taubman focused on high-end retail at Willow Bend, aiming for one quarter of its 200 specialty stores to be luxury retailers. They include Armani Collezioni, Escada, HUGO Hugo Boss, St. John, Burberry, Lalique and Wolford.
“Dallas and Texas are terrific markets for us,” said Caryn Lerner, co-president and chief marketing officer of Escada USA, which has a 6,000-square-foot store here that produces more than $1,000 a foot. “Our research has shown that there is still great opportunity for us in the Dallas area, and we may not be maximizing the potential of the market.”
Other retailers seem to agree. Most of Willow Bend’s anchors built big: Neiman Marcus has 152,000 square feet and Foley’s, and Dillard’s units are each 250,000 square feet. Lord & Taylor occupies a fourth pad of the W-shaped mall with a 140,000-square foot prototype store. And Saks Fifth Avenue is scheduled to be ready for business at Willow Bend in 2004.
Forty-three retailers opened their first stores in Texas at Willow Bend. Among women’s apparel retailers, the list includes Aldo, Bisou Bisou, Daniel Foxx, Everything But Water, Japanese Weekend Maternity, MaxStudio.Com, Nicole Miller, Privilege and Reference.
Also testing prairie soil for the first time are Bernini designer men’s wear, Bruno Magli leather goods, Caswell-Massey fragrances, Charles David handbags and shoes, Charles Jourdan Paris accessories and shoes, Christian Bernard fine jewelry, Diesel jeans, Jacqueline Jarrot accessories, Kabana fine jewelry, Lalique and Swarovski.
The center is lavishly built, with limestone prairie-style architecture, luxurious sitting areas and a spacious indoor playground for children. There are also two high-end restaurants, Mercury and Napa Valley Grille.
Neiman Marcus in July closed its 110,000-square-foot unit at Prestonwood mall in north Dallas in preparation for the bigger store opening the following month several miles north at Willow Bend. The Plano store offers a greatly expanded designer array, including boutiques for Chanel, Yves Saint Laurent and Dolce & Gabbana, as well as a prototype cosmetics center designed to accentuate special events and personal appearances by makeup artists.
“It’s a very exciting store for us,” said Malcolm Ruben, senior vice president of stores at Neiman’s. “We have the best assortment this company has to offer under that roof, and we think we will be very successful.”
He declined to project sales, but clearly, expectations for Willow Bend are far higher than they were at the Prestonwood store it replaced.
Willow Bend retailers are banking on luring big spenders from Plano, an unusually wealthy pocket of new housing developments and young families. More than a third of households reap annual income over $100,000, and 75 percent exceed $50,000, according to the Plano Chamber of Commerce.
It’s one of the fastest-growing cities in the country, swelling 81 percent to a population of 231,650 in 2000 from 127,885 in 1990. In 1960, Plano’s entire population was a mere 3,695. The suburb is also home to a handful of big corporations, including J.C. Penney and EDS.
Taubman expects Willow Bend will also draw from Dallas, whose northern edge lies seven miles south of the mall. Dallas has a fairly wealthy northern tier and a well-known penchant for shopping as entertainment, though it’s unclear whether residents will forsake such popular shopping spots as NorthPark Center and the Galleria. But Dallas County is leader in retail sales, shelling out $12,166 per capita in 1997 — 32 percent higher than the national average of $9,190, according to the U.S. Census Bureau.
The two mixed-use centers that opened this summer near downtown Dallas also hope to capitalize on the affluence of nearby residents. West Village in the fast-growing Uptown area began opening stores in May and is expected to be completed by yearend. It was developed by Henry S. Miller Interests, owner of the prosperous luxury center Highland Park Village here, and Phoenix Property Co., an apartment builder.
The property is an unusual amalgam of architectural styles, including traditional red brick and colorful Art Deco, meant to evoke the feeling of an American main street, where structures have been built over time.
West Village comprises 125,000 feet of retail space, a five-screen art-film theater planned to open Dec. 15 under management by Magnolia Pictures, and 179 loft apartments. The center is 90 percent leased, said Henry S. Miller III, president of the real estate developer.
Stores that have opened since May are: Tommy Bahama, Gap, Lucky Brand, Polo Ralph Lauren, Ann Taylor Loft, Banana Republic, Legacy Trading, a Dallas furniture and clothing store, Near & Far home furnishings, Avalon day spa with an Aveda boutique and several restaurants.
Tenants that are under construction include: Sara Lasier, a designer boutique featuring D&G apparel and Sergio Rossi shoes for men and women; Vespa, the first U.S. boutique built by the Italian scooter company for its clothing and vehicles; Design House Stockholm, a Scandinavian furniture store; Daniel Taylor men’s clothing; Paris Vendome restaurant and Celebrity Bakery.
West Village is planning a street fair to celebrate its opening Nov. 9-11. All of the stores should be open by the end of the year.
Sales at West Village have been sluggish due to the abundance of ongoing construction activity at the site, tenants said, and the tragedies of Sept. 11 have affected business for retailers nationwide.
“I think we’ll have to figure out a way for everybody to cut their expenses and make the most of the business we have for a while,” said Henry S. Miller III, president of the real estate developer. “But I don’t think it will last. The economy is fundamentally strong. We’ll have tough times over the next several months, but then it will start coming back.”
Simon Dallimore, president of retail for Los Angeles-based Lucky Brand Dungarees, maintained a positive outlook.
“We feel pretty comfortable that Texas is a good market for us,” Dallimore said. “We came to Dallas first because of the availability of real estate. We certainly see the potential for at least another store there. The population density of Dallas can really afford that.”
Bounded by busy McKinney and Lemmon Avenues, West Village is in an area that is rife with new condominiums and largely populated with single professionals and childless couples. Average household income is $95,000 and the median is $65,000 within a five-mile radius, according to research by New American Network.
Two miles northeast is Mockingbird Station, located at a stop on Dallas’s new light-rail line at the frenetic intersection of Mockingbird Lane and Central Expressway. It’s on the edge of Lakewood, one of the older middle-to-upper-class neighborhoods in Dallas, and across the expressway from tony Southern Methodist University and wealthy University Park.
“This is a totally underserved market,” said Ken Hughes, who teamed with David Dunning to develop the center. “There is no regional mall, but tons of kids. The Gap at Highland Park Village does $1200 a square foot, and I fully expect them to do that here.”
Their company, UC Urban, converted and expanded a former Western Electric telephone factory into stores and loft apartments. They also bought adjacent buildings to house more retail, for a total of 175,000 square feet plus office space and an art movie complex run by Angelika Film Center that offers stadium seating and a liquor license throughout.
Tenants include Urban Outfitters, Ann Taylor Loft, Victoria’s Secret, Bath & Body Works and Aveda Salon, among others. A prototype 25,000-square-foot Virgin Records, the first in Texas, opened in September.
“What we’re after is an artsy, edgy, fashion-minded customer,” said Hughes.
The developers plan to break ground early next year on a boutique hotel.
This city, of course, has felt the national slowdown in retail sales. But developers are hopeful that new shopping centers ultimately will prosper.
“You work on these projects a long time, and they are built for the long term so you can’t focus on what the economy is at this particular moment,” Taubman reasoned. “We would all like the economy to be better than worse. It doesn’t impact our planning in any way.”
Retail typically is strong here because shopping is a popular diversion in an area with few natural recreation destinations and a strong, diverse economy.
Supported by oil and high tech firms, including Exxon and Texas Instruments, Dallas and its suburbs also boast the highest concentration of telecommunications companies in the world: some 600 firms, according to economists at the Federal Reserve Bank of Dallas.
The Dallas-Fort Worth Metroplex is the fastest-growing large urban area in the country, according to the last census, expanding 29 percent from a population of four million in 1990 to 5.2 million in 2000. The city of Dallas, ranked eighth nationwide, grew 18 percent to 1.2 million residents from one million over the same period. In Dallas County, which spans a broader metro territory and has 2.2 million residents, median household income is $40,960.
Which malls might feel a pinch from all this new development?
Taubman said he expected Willow Bend would most severely affect the Galleria, a touristy mall on the northern edge of Dallas anchored by Saks, Nordstrom and Macy’s and dotted with such luxury retailers as Tiffany, Cartier and Gucci.
“Galleria has some very good stores, but it doesn’t have strong critical mass, and I think with our combination of architecture, merchandising, the environment, access and a superior department store mix, we feel we have the best of the best from the standpoint of Dallas,” he asserted.
Some observers question the future of Stonebriar Centre, a year-old mall five miles north of The Shops at Willow Bend in Frisco. Anchored by Nordstrom, Macy’s, Foley’s, J.C. Penney and Sears, it has been producing more than $400 a foot, according to general manager Steve Lay.
“We’re more complementary than competitive,” Lay reasoned when asked about Willow Bend. “They appear to be positioning themselves at the high end of the market, and we’re below that. One thing that would distinguish us is our entertainment mix with Dave & Buster’s [dinner theater], a 24-screen AMC theater, a carousel and an ice-skating rink.”
“All the high-income individuals, where have they gone?” said Forsberg of Andersen Consulting. “A lot of the big companies have gone up north to the Legacy area [in Plano.] Highland Park Village was close to Highland Park and University Park, and there hasn’t been a comparable destination in the Plano, Frisco area. With West Village and Mockingbird Station, they are trying to fill in some gaps for some of those people in the downtown area.”