malls

For the past year or so I've been a little obsessed with the state of shopping malls. Some stories I've read have said that the shopping mall is evolving into more of an outdoor shopping venue such as the Grove in Los Angeles, others have said that its disappearing entirely. One thing is for certain many malls have a lot of vacant space lately, partly because some of those anchor department stores are disappearing or consolidating. All that vacant space is forcing mall owners to get creative. One mall, the Westfield North County Shopping Mall in Escondido near San Diego, California may move a supermarket into the area that once housed a Robinsons-May store.

Big box retailers like Costco have also moved into some malls, taking over prized anchor spots vacated by department stores. Westfield already has a Gelson's Market at Westfield Century City in Los Angeles and a Bristol Farms at Westfield San Francisco Centre and has found that overall mall sales have increased as the mall becomes one-stop shopping. There's a hope that the big retailers will lift the sales of the smaller specialty stores in the same way that department stores did in the past.

Other ideas for attracting patrons to malls including indoor skating rinks, spas and community centers. Another type of mall that seems to be thriving is the specialty mall. The Christian Science Monitor recently had an interesting piece on the rise of ethnic malls which have continued to thrive even in a tough economy. This hints at an idea that for some malls the feature might not be in trying to appeal to everyone just to get them in the door but instead focusing on a select population of shoppers who will remain loyal.

It looks like all those door-busting sales didn't do much good this holiday season and it could mean that some malls may be permanently out of business. The slowest retail holiday season in 38 years could end up dooming 2,000 to 3,000 malls by the middle of the year with an estimated 200,000 more businesses shutting down. Even those that are still around will be cutting back on store locations, shutting down stores that aren't making good sales numbers. An ABC News article quotes Howard Davidowitz, the chairman of retail consulting firm Davidowitz & Associates who says that: "The American standard of living is changing forever."

At the beginning of 2008 we mentioned the dying out of the traditional indoor shopping mall which was being replaced by outdoor shopping areas. But the recent economic fallout is affecting both the indoor and outdoor kinds of shopping malls as what is now changing isn't how people shop but whether or not they shop at all.

The beautiful and historic city of Istanbul seems to be suddenly becoming a hot spot for travel and shopping, not just for those looking for a historical experience but for those looking for the latest stores and hotels. The International Herald Tribune recently did a story on the rise of shopping malls in the Turkish town. Income is rising in Turkey and malls are attracting shoppers by offering newness and one-stop shopping, food and entertainment. Foreign retailers are starting to move in as well. WWD reports that the Christian Dior boutique at the Istinye Park shopping complex is thriving. Although the general economic environment is worsening, Turkish retail is very appealing to foreign investors.

One foreign brand making a move in Istanbul is W Hotels Worldwide which will mark its entry into Europe with the grand opening of W Istanbul. The W Istanbul is the centerpiece of the Ottoman Row Houses. W Istanbul features 134 guest rooms, including 26 suites, Chef Jean-Georges Vongerichten's Spice Market restaurant, and a signature spa. The rooms include private gardens, terraces and cabanas and are designed in a blend of modern and Turkish design.The project complex in which W Istanbul is located includes luxury residences and retail shops which will offer global luxury brands.

Last year I wrote about Nouvelle at Natick, a new development attached to a mall in the suburbs of Boston. The mall itself, the Natick Collection, seems to be in a bit of trouble. The Boston Globe reports that the mall, which is home to the state's first Nordstrom and first suburban Neiman Marcus, is having trouble attracting shoppers. The mall seems to be a victim of several different factors that include the fear of a recession and high gas prices as well as the fact that those in the suburbs of Boston are conditioned to heading to the city to do their luxury shopping. According to the Globe, the older part of the mall, which is home to traditional mall fixtures like Macy's and Gap is still doing well. Meanwhile the new luxury portion of the mall is hosting cocktail afternoons, lunches and yoga classes to attract attention.

This news comes at a time whenever another huge luxury mall with a residence component has opened in a place not known for luxury stores. This week saw the launch of Americana at Brand in Glendale, California by developer Rick Caruso. Caruso has had a big success with his Grove complex which is located in a more traditionally shopping friendly portion of Los Angeles. Americana at Brand, like the Natick Collection is located in an area in which there is already a thriving mall that caters to a more middle market crowd and it also has a residential part. The article in the Globe posits Natick's affluent surbanites might simply not be ready for luxury spending down the street. Certainly the shopping styles in suburban Los Angeles and suburban Boston differ but it makes me wonder if in six or eight months, Americana at Brand might be facing a similar slowdown. For this week at least the area is swarmed with people checking out the sparkling new shopping center but whether or not that will convert to solid sales will be found after the novelty wears off.

Now of course all seasoned shoppers know that it's not the size of the mall that counts, but the size of the sale and the quality of the selection -- but overseas shopping malls are bigger and badder than ever. The Chinese especially seem to love their enormous shopping centers, as China has by far the majority of the world's largest malls -- including the world's single biggest: the South China Mall. Located in Dongguan, China the South China Mall opened in 2005 and has a whopping 7.1 million square feet of leasable space. And although it might be considered the largest in the world, I'm not totally convinced. With wind mills and theme parks taking up some of that space isn't that cheating a little? I mean, how much square footage of actual shopping does it have?

When I was growing up the shopping mall was the place to hang out, but the mall is quickly becoming a relic from the 1970s and 1980s. In fact, the last enclosed shopping mall in the U.S. was built in 2006. The trend these days is for open-air shopping in a center that offers a mix of high-end national retailers, restaurants and entertainment. Instead of being devoted to shopping exclusively these centers tap into the "shopping as a lifestyle" trend that is popular with all level of consumers. It seems to be a direct reversal of the trend in the 1980s in which the strip mall centers and standalone stores found themselves suffering. At that time many retailers moved in to malls simply because that was where everyone was.

Some malls in the United States are currently in a state of decline. The first thing that happens often is that the big department store anchor closes down. This often forces the smaller stores out of business because there is less foot traffic. For stores without an exterior entrance it is particularly hard to lure shoppers in. The problem is so virulent there are even websites such as Deadmalls.com which pay homage to the fallen.

A fascinating article in the Economist also chronicles the dying mall syndrome and also mentions Rick Caruso, the man currently tearing up the streets near my home in Glendale,CA. Glendale is already home to a huge mall, the Glendale Galleria. Right next to it, Caruos is building a 16-acre development that includes a public square and apartments. Caruso has already created a similar center at The Grove in Los Angeles and is planning another in Arcadia, CA. What is particularly interesting about the article in the Economist is the comparison between Caruso and Victor Gruen, the creator of the first enclosed shopping mall in the U.S. Both were looking to create an idealized city center that would offer shopping but also a place to converge, a sort of modern town square. Gruen's enclosed malls tended to pull people of out downtown areas and into the suburban areas. Now Caruso comes in years later offering an idealized version of a city street causing people to abandon the malls. I wonder if in another 20 years the open-air shopping centers will go through the same life cycle.

When you are out doing your holiday shopping this fall, don't be surprised to see a few shoppers who have come along way to check off their holiday list. CNN Money reports that due to the weak dollar, shoppers from other countries are coming to the States where their money will go farther. Malls and outlets, which are bracing for a tough season anyway, if the predictions about the economy hold true, are welcoming these shoppers with open arms. Free limo rides with Champagne and discounted hotel stays are just some of the perks that are being offered as incentives for these fat-walleted friends from far away. The Chelsea outlet centers in upstate New York, Minnesota and Seattle have Canadians crossing the border for shopping sprees. In Miami, shoppers are flooding in from Latin and South America. Foreign travel agents are busily arranging shopping trips for Black Friday, the day after Thanksgiving which is traditionally the biggest shopping event of the year.