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Shopping Centers Today -> June 2005
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HEAT SEEKERS
2005 Hot Retailer Awards honor the tenants landlords say generate the most buzz
BY DEBRA HAZEL
What makes a retailer hot? To a shopping center landlord, it’s about more than just making rent payments on time. It’s all about the value of the brand, and the traffic, media attention and cachet this can bring to the shopping center. This year Apple, Coach, Steve & Barry’s, White House/Black Market and Williams-Sonoma are the hottest retailers around, landlords said in an ICSC survey of 3,126 mall managers and marketing directors in the U.S. and Canada. The winners were unveiled at the annual Hot Retailer Awards ceremony at ICSC’s Spring Convention in Las Vegas last month. Together, these chains exemplify the kinds of stores that keep consumers coming back.
Williams-Sonoma
San FranciscoNo. of stores: 254
Store openings: 12 (while closing nine this year)
Preferred locations: Regional malls, lifestyle centers, urban streets
Leasing contact: Arthur Tropp, senior vice president of real estate, (415) 402-5077
Lifestyle center landlords are particularly fond of Williams-Sonoma because the chain encourages shoppers to linger with its experience-oriented stores. Cooking classes, tastings and other in-store events keep upscale foodies returning for more. “Williams-Sonoma has reinvented the customer experience in purchasing housewares,” said Patrick J. Connolly, chief marketing officer of San Francisco-based Williams-Sonoma. “Before Williams-Sonoma, housewares were sold in hardware stores and in nonprime space in department stores. Now you buy them in an upscale retail environment in a store next to Tiffany. We have created a luxury lifestyle brand where none existed.”
Apple
Cupertino, Calif.No. of stores: 103
Store openings: About 25 this year
Preferred locations: Upscale malls, lifestyle centers, urban streets
Leasing info: www.apple.com
Apple’s stores and products, including the recently introduced Mac mini computer and the ubiquitous iPods, are just plain cool. And landlords are finding that coolness rubs off on any shopping center Apple is a part of. “The product is so cute,” said Colleen Pillus, marketing director of the Poughkeepsie (N.Y.) Galleria. “The exposure Apple is getting right now — you can’t pay for that kind of press.” The stores also bring in — and keep! — that most elusive of mall customers: men. And sales that Pillus estimates at between $2,500 and $5,000 per square foot surely can’t hurt. The stores range in size from the 800-square-foot mini-stores introduced last year to units spanning over 2,000 square feet. Apple says its expansion plans include 25 new stores in the United States, United Kingdom and Japan, and an entry into Canada.
“We’re very picky about location,” said Fletcher Cook, an Apple spokesman. “We want to be on the perfect floor, in the right mall.”
Coach
New York CityNo. of stores: 371 (185 North American traditional stores, 81 factory outlet stores, 105 traditional in Japan)
Store openings: About 20 traditional stores and five factory outlets this year and next
Preferred locations: High-end malls, Main Streets
Leasing contact: Michael Tucci, president, North American retail, (212) 594-1850
Luxury accessories retailer Coach has gone from staid to cutting-edge, and the change has paid off, landlords say, because the brand now appeals to teen-agers as well as their grandmothers. “The key is three words: relevance, innovation and value,” said Andrea Shaw Resnick, vice president of investor relations at Coach. Value, the last part of the equation, she says, means providing quality at “an affordable luxury price.” Its prices are lower than those of its main competitors, including Louis Vuitton and Gucci. Many a customer makes her first luxury handbag purchase at Coach, and the changes the chain is making should keep them coming back again and again, Resnick says. “They got the colors and new styles and are updating constantly,” said Connie L. Russ, director of marketing and communications at Visconsi Cos., a Pepper Pike, Ohio-based community center development firm.
White House/Black Market
(a division of Chico’s)Fort Myers, Fla.
No. of stores: 184 (179 full-line, five outlet)
Store openings: About 45 this year, plus a 20 percent expansion of total square footage next year
Preferred locations: Malls, lifestyle centers, main streets
Leasing contact: Edward J. Coury, vice president, Western region, (214) 349-7634; Jeffrey Gaul, vice president, Eastern region, (239) 298-9609
Selling clothing in shades of just two colors could be considered limiting. But the success of White House/Black Market is right there in … well, black and white. “In fashion, it’s share of closet — and most closets are 50 percent black and white,” said F. Michael Smith, vice president of investor and community relations at the chain’s parent company, Chico’s. Landlords say the concept appeals to a wide range of shoppers. “So many people wear those colors, either as a [main color] or an accent,” said Aimee Braswell, marketing manager for First Colony Mall, Sugar Land, Texas. The core White House/Black Market customer is 42 years old, Smith says, but the stores’ appeal extends far beyond the target. About 15 percent of the base is 55-64 years old, with an additional 15 percent in the 25-34 range. “The color scheme is extremely classic, but the merchandise is a little bit trendy,” said Jennifer Green, CMD, marketing director of Rivercenter, in San Antonio.
Steve & Barry’s University Sportswear
Port Washington, N.Y.No. of stores: 70
Store openings: 75 stores by the end of next year
Preferred locations: Primarily enclosed malls, but also lifestyle, power and neighborhood centers and downtowns
Leasing contact: Douglas R. Calvin, director of real estate, (516) 829-7359
Landlords have found a new anchor tenant in discount family apparel chain Steve & Barry’s. The retailer’s stores range from 25,000 square feet to 150,000 square feet, and it charges 50 percent to 90 percent less for the same quality clothing found at competing department and specialty stores. The stores sell sportswear and officially licensed collegiate wear for more than 250 colleges and universities, and even for some high schools. “They’re offering good-quality product at a reasonable price and to a good age group,” said Virginia Rand Bowman, managing general partner at Northgate Mall Associates, Durham, N.C. “It’s one of the most recent concepts, and they’re in an expansion mode,” Bowman said. “They have a huge space requirement, but it’s a great use.” Despite expansion plans that include 50 new stores this year, the company remains true to its founding principles. “Shoppers can count on Steve & Barry’s to watch their backs,” said Rick Gomes, director of media relations, “and their wallets.”
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