Costco to take anchor spot at Lakewood mall
In a first for Costco in Southern California, it plans to become an anchor for a shopping mall, moving into a spot once occupied by Macy’s in Lakewood Center.
The new Costco store will probably open late next year, the retailer and the mall said in a statement Monday.
It will join a Target store that is already a Lakewood Center anchor -- reflecting shifts that are occurring at malls nationwide due to department store consolidation. Saddled with gaping vacancies, mall owners are swinging open the doors to stores that once would have been locked out.
“Years ago, they wouldn’t have contemplated it, but now they’re doing it,” said Malachy Kavanagh, a spokesman for the International Council of Shopping Centers.
Unconventional tenants can breathe fresh life into enclosed malls, which many analysts once considered “a dying breed,” said Eli Portnoy, chief brand strategist for Portnoy Group Inc. in Los Angeles.
“This is really a saving grace for the mall industry to see Costco becoming an anchor store,” he said. “I think it’s a huge win for both Costco and the mall owners.”
Costco Wholesale Corp., which operates about 60 stores in the Southland, has done well in malls elsewhere in the nation and continues to seek out such opportunities, said Greg Vena, a principal at Northwest Atlantic, a real estate company based in Washington state that develops stores for Costco.
“It’s the center of retail activity for an area,” Vena said. “It’s still very difficult, because of the size of our building, to fit them in. But wherever we can fit them in, we’re going to go after those locations.”
Besides, he said, a large retailer has fewer hurdles to scale in a mall than in many other locations.
“The traditional malls are already retail hubs, so the same type of government approval that would normally be required in a new location aren’t typically required in existing mall locations,” he said.
Joe Filia will be happy to welcome the new neighbor. The general manager of Lakewood Center tenant Panera Bread & Cafe said he had managed stores in other centers where Costco pulled in, followed by throngs of new customers.
“I think all the merchants are very excited about Costco coming here and increasing our foot traffic,” he said.
The news also pleased Bellflower resident Denise Carlton, a Costco fan and a Lakewood Center shopper for the last 40 years.
“Bring it on,” she said. “I think the discounters are what’s happening now, and it’s even going to get bigger as time goes by. You go in there to buy something for $50 -- and spend $300.”
Although retailers such as Target Corp., Wal-Mart Stores Inc. and Costco historically have managed quite well for themselves apart from malls, moving into such shopping hubs can add a little luster to their image, some retail experts said. And, in an era of rising gasoline prices, it doesn’t hurt to buddy up to a mall where consumers are congregating.
Shifting consumer attitudes have made it easy for mall operators to mix and match a wide variety of tenants. Shoppers think nothing these days of unloading a little money at Target and then moving on to Nordstrom.
“Years ago, people didn’t think consumers would shop at mass merchants and then shop at other stores within the mall,” Kavanagh said. “They thought it was a different shopping trip. Now consumers don’t see a difference in buying consumables at Costco, a 50-pound bag of dog food and then going to the mall to buy shoes.”
Lakewood Center, owned by Macerich in Santa Monica, may be an ideal place for Costco to test the strategy in Southern California, Portnoy said. The mall will have five anchor stores when Costco opens, including JC Penney and Mervyn’s. On the same parcel of land, but apart from the mall, are Home Depot, Albertsons, Best Buy and Circuit City stores.
The two-story building that formerly housed Macy’s will be razed this year, assuming the city approves the development plan, to make way for the single-level Costco.
--
