$100-Million Expansion Will Also Broaden Mall’s Appeal : South Coast Plaza Plans Addition
South Coast Plaza will try to broaden its market but still appeal to wealthy shoppers with a $100-million-plus expansion detailed by the mall’s owners Monday.
At the core of C. J. Segerstrom & Sons’ plans to add 900,000 square feet of retail space are two new department stores that traditionally have appealed to middle-class and upper-middle-class customers: The Broadway and Robinson’s.
They will anchor a separate 650,000-square-foot annex across the street from the current mall, which has 1.8 million square feet.
With the expansion, South Coast Plaza expects to be the sales leader among all shopping centers and retail concentrations in the state by 1987, when it projects sales of $735 million. Sales exceeded $400 million in 1984. “Retail concentrations” would encompass areas such as the Beverly Hills shopping district, including Rodeo Drive, and the San Francisco business district, including Union Square.
As part of that growth, Nordstrom Inc. plans to move its South Coast Plaza store into adjacent quarters almost twice the current size.
For the past 10 years, the sprawling Costa Mesa mall, on Sunflower Avenue between Bristol and Bear streets, has upgraded its tenant mix, eager to attract affluent customers.
But so have a number of other Orange County malls, notably Newport Beach-based Fashion Island, which is in the midst of its own $60-million renovation. While scrambling for top-end consumers, both malls have lost some mid-range customers who now buy their back-to-school clothes and Christmas presents at other regional malls such as Westminster Mall or Del Amo Fashion Center in Torrance, retail analysts say.
South Coast Plaza’s action appears to be an effort to bring back customers who don’t have Newport Beach addresses or American Express Gold Cards. While many of the 60 specialty shops in the proposed mall annex will aim their wares at upper-class buyers, a larger middle-class market may be lured by the new department stores, experts say. “Expanding into that market is a wise idea,” said David Jackson, an analyst at Morgan, Olmstead, Kennedy & Gardner. “It will only help sales.”
The three-story annex will have more of a California air than the 18-year-old plaza, with palm trees, a brighter design, indoor and outdoor fountains and more natural light. A pair of pedestrian bridges will connect the plaza with the annex, and more than 3,000 parking spaces will be added, for a total of nearly 9,500.
Top executives from the Broadway, Robinson’s and Nordstrom discussed their expansion plans Monday at a news conference at the Westin South Coast Plaza Hotel in Costa Mesa. Among them:
- The Broadway will build a 200,000-square-foot store with completion scheduled in November, 1986. “It will be the type of store we want Broadway to be in the 1990s,” said H. Michael Hecht, president.
- Robinson’s plans a $30-million, 215,000-square-foot store, slated for completion in August, 1986. “We turned down a chance to be in South Coast Plaza when it was first built, " said Michael Gould, president and chief executive. “In retrospect, it was not one of our better decisions.”
- Nordstrom will nearly double its size when it moves into a $27-million, 225,000-square-foot store behind its current location at South Coast Plaza. It will open in May, 1986, said Betsy Sanders, Nordstrom’s vice president and general manager. Its current location will be leased to other stores.
Henry T. Segerstrom, managing partner of C. J. Segerstrom & Sons, the mall’s owner and developer, said competition has forced the expansion. “When you’re No. 1, you’ve got to keep struggling to remain in that position,” he said.
South Coast Plaza is seeing increased competition from local and regional malls. For the first three quarters of 1984, it ranked top among 60 Los Angeles area regional malls, posting sales of $247 million, according to the State Board of Equalization. But Del Amo Fashion Center in Torrance has gained ground, posting sales of $237.5 million during the same period. During the second quarter, sales at Del Amo actually exceeded South Coast Plaza’s.
Brandace Berger, vice president of marketing for the Torrance Co., owner of Del Amo, said the company does not consider South Coast Plaza a direct competitor. But Del Amo executives have noticed that that South Coast recently has been advertising in their area. “It’s a way to bolster image,” Berger said.
South Coast Plaza’s most direct competition is Fashion Island, which has chosen a clearly upscale tack in its own ongoing renovation.
Officials of the Irvine Co. which owns Fashion Island, are clearly concerned about South Coast Plaza’s expansion.
Because two of Fashion Island’s biggest tenants--The Broadway and Robinson’s--soon will have added locations at South Coast Plaza, Irvine Co. executives recently struck agreements with the stores, calling for them to remake their Fashion Island operations into so-called “fashion stores.” These outlets would sell exclusive designer fashions not availble at other shops, including those in South Coast Plaza, said Kathleen Lauren, Fashion Island’s marketing director.
Department stores now at South Coast Plaza are hardly sitting still. Bullock’s plans to add up to 100,000 square feet of retail space to its current 160,000-square-foot store, May Co. is embarking on an $8-million interior revamp and the Sears, Roebuck & Co. store is planning a $6-million interior remodel, Segerstrom said.