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Wal-Mart tests upscale waters

Wal-Mart is trying to get into the heads of “selective female shoppers” with its new test store in suburban Dallas, says John Fleming, executive vice president and chief marketing officer. The 203,091-square-foot store will serve as a laboratory for ideas that could be rolled out to all 3,800 U.S. Wal-Mart stores. The Dallas unit sells 1,500 upscale items not offered in a typical Wal-Mart, including sushi, fine jewelry and $500 bottles of wine. The apparel departments resemble specialty stores, with their own cash registers and larger dressing rooms. The store also takes a more subtle approach to customer service than the typical Wal-Mart: Employees sport navy polo shorts and khakis, and signage is more sophisticated, while public-address announcements, in-store radio and loud cash registers are banned. “If something doesn’t work, we will change it and try something else,” Fleming said. “And when the innovation resonates with our customers, we will consider introducing it in other stores.”

 

From ‘dead mall’ to dream project

A new handbook draws from nearly a decade of research to help developers turn “dead” malls into thriving mixed-use projects. The 67-page document, titled Malls into Mainstreets: An In-Depth Guide to Transforming Dead Malls into Communities, profiles six successful projects and provides tips on market analysis, tenant mix, financing, community relations and more. The Congress for the New Urbanism, a San Francisco-based nonprofit that began studying the phenomenon of dormant malls in 1989, produced the report in cooperation with the U.S. Environmental Protection Agency.

As many as 140 U.S. regional malls are already economically obsolete, says a CNU-PricewaterhouseCoopers study, and up to 250 are in danger of sliding into the grave. Given the right conditions, however, some of these so-called “greyfields” could be remade into mixed-use environments, says Tom Gougeon, a principal and chief development officer at Denver-based Continuum Partners, which transformed the 1960s-era Villa Italia mall in Lakewood, Colo., into the 103-acre Belmar mixed-use downtown district. The $850 million project, profiled in the report, includes 22 city blocks of stores, entertainment, office space and residences. The first phase opened in May 2004. “We went from a regional mall that had about 1.4 million square feet of retail space to a mixed-use district that has about 3.5 million square feet of residential, commercial and retail space,” he said. “It is amazing how much more human activity can happen on the same piece of real estate with pretty much the same infrastructure.” The report is available at www.cnu.org.

 

Private money keeps rolling in

Arts-and-crafts chain Michaels put itself up for sale in March, making it the latest retailer to jump onto an increasingly crowded mergers and acquisitions bandwagon. A private equity firm is likely to buy the 896-store chain, observers say. Similarly, private funds are expected to compete for apparel conglomerate Jones Apparel Group, which has also gone on the block. In the past year alone, private equity firms have raised over $173.5 billion, according to data firm Thomson Financial. Now they want to invest in retailers with strong cash flow, and Thomson expects private equity deals in the retail sector to reach $26 billion this year and to average some $346.5 million in size. In 2001 only $4.9 billion worth of private equity deals got done in the retail sector, with transactions averaging $37.7 million.

 

The Sheik of chic

When Syria relaxed a ban on imported apparel last year, opening the country up to a flood of foreign fashions, Majed Al-Sabah, a nephew of the emir of Kuwait, was first in line to corner the luxury end of the market. In March he opened a 4,000-square-foot outpost of his high-end Villa Moda department store chain in the middle of the historic Damascus spice market. It’s that pioneering spirit that has Al-Sabah fast becoming the arbiter of Middle East high fashion. He founded Villa Moda in 2002 to bring designer labels to local shoppers and has already opened stores in Dubai, United Arab Emirates; Kuwait; and Qatar. He plans to open a store in Jordan this year and a three-level, 53,000-square-foot Villa Moda store in the building that once housed London’s Battersea Power Station in 2009. And he’s not content to just sell the merchandise. In September Al-Sabah plans to launch Alef, a Middle Eastern fashion magazine along the lines of Vogue.

 

Bed, bath and coupons

More than half of U.S. households shop at Bed Bath & Beyond, and nearly 60 percent plan their visits in advance, according to a survey of 4,000 consumers by the NPD Group research firm. The typical Bed Bath & Beyond visit lasts about 30 minutes, and the average customer spends about $85 per year at the store. What’s the chain’s secret to driving traffic? Its signature 20 percent discount coupons help, observers say. Forty-four percent of Bed Bath & Beyond customers say they use the coupon “at least sometimes” or “all the time” when they shop. And half of them visit the store at least once every three months. Rival Linens ’n Things has already introduced its own version of the coupon.

 

Campy campaign

Swedes love their soap operas, and Stockholm’s Farsta Centrum is indulging them in its latest marketing campaign to promote the shopping center. In a strategy that includes Internet, newspaper and television ads, Farsta Centrum’s marketing team created a faux soap opera reminiscent of the 1980s hit show Dallas called A Shopping Story. The centerpiece is a series of 15 TV ads depicting a love quadrangle between shop girls Cindy and Crystal and their beaux. All the action takes place at Farsta Centrum. Cartoons mimicking the TV ads ran in the local newspaper, while graphics carried the story throughout the three-level, 150-store center. Shopping bags and even holiday cards carried the likenesses of the lovers in A Shopping Story. The shopping center even set up a Web site with episodes, character information, background stories, and downloadable pictures and sound bites.

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