Malls evolve in fight for shoppers

MUSIC TO THEIR EARS: Black Friday foot traffic at Warwick Mall was brisk, with retailers including FYE offering promotions attempting to lure shoppers. / PBN PHOTO/DAVID LEVESQUE
MUSIC TO THEIR EARS: Black Friday foot traffic at Warwick Mall was brisk, with retailers including FYE offering promotions attempting to lure shoppers. / PBN PHOTO/DAVID LEVESQUE

Once an online-only venture, Diamond Legends, a sports memorabilia and apparel store at the Warwick Mall, is now located close to Nordstrom Rack – and closer to the shopper its owner covets.
“Nordstrom brings in the right clientele for us here,” said store President Joe Parenti, “that female, [age] 18 to whatever, who’s buying for the boyfriend, the husband.”
Though malls dating back to the 1970s in Rhode Island and southern Massachusetts struggled during the Great Recession and, in Warwick during the 2010 floods, the number of vacancies at the Rhode Island malls has dropped, according to the Rhode Island Retail Federation.
And despite some mixed sales results on Black Friday, continued economic challenges in the Northeast have not prevented local mall retailers from feeding off each other’s success and enjoying a busy kickoff to the holiday season, say mall owners, developers and marketing managers.
Whether the strong kickoff can be sustained through the holiday season and beyond remains to be seen, acknowledges Aram G. Garabedian, co-managing partner for the Warwick Mall.
While foot traffic was “extraordinarily heavy,” he said, it is still too early to get a sense of sales year over year, and regardless, that is not data his retailers are likely to share. But shoppers, he said, are an unpredictable lot.
“The only thing we can do is have a mall that’s clean, exciting, comfortable and decorative,” Garabedian said. “You hope to have a good variety of stores working hard getting customers, and if the weather works with you and shoppers are [employed], that’s what adds to the success.”
Garabedian, along with marketing managers at the Providence Place mall; Emerald Square, a Simon Properties mall in North Attleboro; and Swansea Mall in Swansea, have a variety of strategies in place to keep shoppers coming back, particularly at the height of the holiday shopping season. Chief among these is the convenience of locating large anchor stores like Macy’s and Wal-Mart near smaller chains or privately owned shops.
Trends include hosting activities, comfortable seating, attracting new retail outlets and restaurants, and including some service tenants in the retail mix, mall managers say.
The Warwick Mall, which owners rebuilt following the 2010 floods, now includes a wing with Nordstrom Rack, Diamond Legends and other stores, and boasts a 90 percent occupancy rate, Garabedian said. Two new restaurants are also on the way: Buffalo Wild Wings near the food court next year and Not Your Average Joe’s restaurant outside the mall, sometime this month. Shane Waldron of Smithfield bought an autographed photo of retired New England Patriots safety Rodney Harrison on Black Friday at Diamond Legends.
“This mall is busy as ever,” said Waldron. “They keep adding things. Five years ago, you would have thought this mall was starting to go downhill, but now, it’s expanded a lot.”
Binni Patel, director of marketing and business development at Emerald Square, said her mall has added Smilistic, a full-service dentist’s office, and New England Casino, a school that certifies casino dealers.
“We’re not doing it just to fill vacant space,” Patel said. “We’re trying not to be just a traditional mall, but a place where someone can go to get everything they’re looking for.”
According to ShopperTrak, bricks and mortar shopping traffic at malls and big-box stores increased 2.8 percent on Thanksgiving and Black Friday, to more than 1.07 billion store visits. Sales nationwide increased 2.3 percent, with spending totaling $12.3 billion. However, traffic and sales in the Northeast declined 5 percent and 7 percent respectively, the analytics firm said. The National Retail Federation said average sales were actually down from $423.55 to $407.92 Thursday, Nov. 28 through Sunday, Dec. 1.
(In Rhode Island and Massachusetts, blue laws prevented stores or malls from opening on Thanksgiving, although malls and some stores opened just after midnight.)
Six fewer days between Thanksgiving and Christmas than last year has added to the challenge, say mall managers. They said foot traffic was good but could not provide sales figures.
Business is clearly better at some malls than others, however.
The Swansea Mall is only 80 percent full, said Marketing Manager Susan Patterson. However, opening at 12:30 a.m. after Thanksgiving, offering steep discounts throughout the holiday season, and hosting visits and photos with Santa for pets as well as children have attracted shoppers, she said.
“Here at Swansea it’s still a little bit of a challenge for us,” said Patterson, who nonetheless characterized Black Friday traffic as strong and that weekend as steady. “Wal-Mart detached and opened a super mall in our back parking lot, so we’re seeing a lot more traffic, but people are still getting used to the Wal-Mart not being in the mall.” Swansea has hired a new leasing company and expects to announce new stores soon.
Providence Place, which opened in 1999 and has 160 stores, kiosks and anchors, is a draw because of its urban setting, said Mark S. Dunbar, senior general manager.
“It’s all about leasing,” Dunbar said. “It’s all about having the right kind of merchandising available that fits the need of the shopper.”
For Adam Winstanley, principal of Winstanley Enterprises LLC of Concord, Mass., none of these malls represents the model he sees as the future in retail.
His firm, which has a demonstrated track record of turning around underperforming assets, most recently at the Norwichtown Mall in Norwich, Conn., purchased the Rhode Island Mall with a New York-based private-equity firm in 2012 for $38 million.
Calling it a “dead mall” killed in part by the opportunity the Warwick Mall seized after the floods to lure tenants away, Winstanley says he has three major tenants ready to sign leases, one within the next two months. His plan is not for a traditional mall, but for a few larger tenants averaging about 55,000 square feet each.
“It’s very challenging taking a dead mall and converting it to larger-formatted spaces,” he said. “We’re taking a mall that had 60 plus tenants in it and it’s going to be shelled out and rehabbed with three to four tenants, max. We will not have any interior mall space left when this project is done.”
Winstanley and Surrey Equities of New York, N.Y., last week sold the property two of the mall anchors, Wal-Mart and Kohl’s, are located in to an undisclosed buyer for $33.35 million, to generate capital to help with the mall’s rehab.
“Larger-format stores are getting smaller,” Winstanley said. “There is not such a great need to have a tremendous amount of small stores.”
Winstanley predicts the dominant malls – like the Warwick Mall – will survive, but less-vibrant malls won’t.
“We’re over-retailed on malls in this country and the B malls are not going to make it,” he said. But “it’s also true that people don’t want to sit in their pajamas ordering off the Web all the time. … There’s a socialization element, and I don’t think that’s going to get wiped out.” •

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