NEW YORK — There’s a new game coming to Atlantic City — and it’s called luxury fashion retailing.
Gucci, Hugo Boss, Louis Vuitton, Armani A|X, Bebe, Bebe Sport and Burberry are among the brands that Gordon Group Holdings has signed to be tenants for its $145 million retail, dining and entertainment complex, called The Pier at Caesars, Scott Gordon, president of the family-owned developer based in Greenwich, Conn., told WWD in an exclusive interview.
The 575,000-square-foot project is to rise on the site of an existing pier and extend 900 feet into the Atlantic Ocean. It would have about 100 retail and restaurant tenants on four levels that cover a total of 315,000 square feet, Gordon said. The plan is to open The Pier for the summer 2005 season.
“About 20 tenants will be pure luxury,’’ he said. “That’s a good chunk and definitely enough to make a statement with luxury brands, but not an overwhelming chunk.”
Atlantic City, unlike its main gambling and entertainment competitor, Las Vegas, has not had an enclave for luxury or designer brands. Hotel-casino operators, such as Donald Trump, said that means untapped potential.
“Atlantic City is the biggest sleeper in terms of retail,” said Trump, whose holdings include Trump Plaza, Trump Taj Mahal and Trump Marina. “You watch what happens. The Pier at Caesars will be a tremendous success. There is a huge market. Some of the people walk around in T-shirts and spend a million [dollars] a night.”
Atlantic City draws about 32 million visitors a year, according to statistics from the Convention and Visitors Bureau. Las Vegas had 35.5 million visitors in 2003, said the Las Vegas Convention and Visitors Authority. Las Vegas had $6.1 billion in gaming revenues in 2003, while the New York Times reported that Atlantic City compiled $4.3 billion in gaming revenue in 2002.
Seventy-five percent of Atlantic City’s revenues are through gaming and 25 percent nongaming, including retail and restaurants, Gordon Group said. In Las Vegas, it’s a 50-50 split.
Burberry, Vuitton and Gucci each are taking 4,000 to 5,000 square feet, while Hugo Boss will occupy 2,600 square feet, Gordon said. The luxury component will constitute about 50,000 to 60,000 square feet. Gordon Group, which is known for creating unusual retail settings and then selling them, is also in discussions with Tiffany, among other top retailers, Gordon said.
“We don’t do cookie-cutter projects,” Gordon said. “We pride ourselves on challenges and we focus on niche properties. We are a family business. Not a REIT [Real Estate Investment Trust]. We take one project at a time.”
Gordon said there would be some cosmetics stores, each in the 1,000-square-foot range, as well as other better brands, including Guess. Gordon Group has codeveloped Forum Shops in Las Vegas, which is now owned by Simon Property Group, and developed The Shops at Mohegan Sun Casino in Connecticut, as well as having leasing and development associations with Bridgemarket in New York City, San Francisco Center and The Beverly Center in Los Angeles.
“We are trying to tap into the millions of people who never looked to Atlantic City for anything more than gambling or a beach,’’ Gordon said. “Now they’ll have something else.”
His father, Sheldon Gordon, chairman of Gordon Group, said in a statement, “Just as The Forum Shops was a catalyst for the explosion of Las Vegas, The Pier at Caesars is an overture of what Atlantic City will become in the future.”
While a few of the retailers in Trump’s casinos do sell fashion merchandise, when it comes to designer goods, it’s primarily accessories. Cache has stores in Taj Mahal and Trump Plaza, while the Taj also has Andrew Geller shoes and accessories. Bernie Robbins fine jewelry has units at Taj and Trump Marina, and at Trump Plaza there is also Fine Leathers by Barron, selling Prada, Coach and Fendi, among other major brands.
“At this point, we are looking at expansion plans with Trump Taj Mahal, and that will include additional retail, but there is nothing to announce yet,” said Paul R. Ryan, executive vice president of operations for Trump Hotel Casino Resorts.
In addition, The Walk outlet center in Atlantic City plans to expand and the Borgata Casino Hotel & Spa is proposing a 500,000-square-foot expansion that might bring more luxury retailers. The Borgata project also includes adding bars and restaurants and spa enhancements. The hotel does not have branded designer shops.
Michael Facenda, director of marketing services of the Borgata, which opened in July 2003, said, “Based on customer research, pre- and post-opening, it is clear to us that the right retail offerings add to an upscale experience. It’s very important and the customer is asking for it. We are doing $1,400 [in sales per square foot] and we are working to design the right formula for a product mix for the expansion.”
The Borgata has 11 specialty units, including the Carina boutique with women’s apparel, accessories and shoes, with styles from Prada, Dolce & Gabbana and Manolo Blahnik. There is also the Misura men’s shop, selling designers such as Hugo Boss and Prada as well as furnishings; Borgata Jewels, with items from Rolex, Cartier, Brietling and Franck Mueller, among others, and Bambino, for children’s wear and toys.
“In Atlantic City, merchandise retail has been more of a convenience — the kind of things that people need when they are in hotel, as opposed to leisure shopping,’’ Ryan said. “There is no question that the marketplace is changing.”
Gordon said he thinks The Pier can ultimately exceed $1,000 in sales per square foot, making it one of the more productive centers in the U.S., but he said he had no idea how productive it would be initially. The Forum Shops in Las Vegas exceeds $1,300 in sales per square foot and is undergoing its second phase of expansion. It’s considered among the most productive major shopping centers in the country.
Elkus Manfredi of Boston and the Rockwell Group of New York are creating The Pier at Caesars, which is a restoration of an old pier and located in the center of the Boardwalk.
“It will be very contemporary, with a boardwalk which is like teak wood,” Gordon said. The Pier would be 200 feet wide. The second level is to house the top-priced luxury merchants and a bridge to Caesars casino hotel, while the first level would be more for impulse shopping, with Bebe as well as jewelry and athletic shoe stores. The third and fourth levels are intended for restaurants and night clubs.
Restaurants in The Pier are to include Stephen Starr’s Buddakan and El Vez, as well as Phillips Seafood of Baltimore. Pier Developers Inc., an affiliate of Gordon Group Holdings LLC., plans to announce more fashion tenants and restaurants, and is expected to officially announce the those tenants today.
The Pier would be connected to Caesars Atlantic City by a skybridge and be linked to Bally’s Atlantic City, which includes the Claridge and Wild Wild West casinos.
Caesars Entertainment, which owns the pier itself, will lease to Pier Developers for 75 years.