A Look at 1986, and the Climate for ’87 : Retailing

In the retail trade, there was more for everyone in 1986--bigger malls, grander stores, and, most important to retailers, more consumer dollars.

Continuing a trend that began last year, 1986 saw dramatic retail expansion and high consumer demand following the recession of the early ‘80s.

And 1987 could be another banner year if retailers avoid a temptation to expand too rapidly.

Costa Mesa’s South Coast Plaza--the biggest Orange County retail center--nearly doubled its size this year and added such upscale stores as luggage designer Louis Vuitton U.S.A. and designer women’s clothing stores Lina Lee and Jessica McClintock.

The center’s expansion included a new $27-million Nordstrom store and a $100-million Crystal Court annex with Broadway and J. W. Robinson’s department stores.

Developer C.J. Segerstrom & Sons expects record sales at South Coast of $735 million in 1987, up from an estimated $500 million in 1986.

The rapid expansion, however, may have hurt South Coast Village, another Segerstrom mall just across the street. A dozen retailers and former tenants of the village sued C.J. Segerstrom, claiming that the developer has neglected the center. Segerstrom has not yet commented on the allegations.

Meanwhile, the area’s other major mall, Fashion Island, continued a $115-million renovation project that contributed to 1986 projected sales of from $210 million to $215 million, up 12% to 13% from 1985.

The Irvine Co., owner and operator of Fashion Island, plans to begin building 40,000 square feet of additional retail space next year, including 10 to 12 stores and two restaurants.

Santa Ana’s Fashion Square began a project that will transform the sleepy open-air mall into an enclosed galleria with 170 shops, tripling retail space to 1.2 million square feet. The re-christened Main Place/Santa Ana, scheduled to be finished in September, is expected to generate five times its current annual sales volume of $35 million.

Smaller malls expanded, too. A record 2.95 million square feet was added to 14 Orange County projects in neighborhood and community shopping centers, according to Coldwell Banker Commercial Real Estate Services .

The Huntington Center, for example, added 907,000 square feet, including a Mervyn’s and a 40-shop wing. There were no new stores at the Buena Park Mall, but it did add a service to attract shoppers--a shuttle to ferry shoppers from nearby Buena Park hotels.

In February, ground will be broken on the Brea Marketplace, next to the Brea Mall, to add 30,000 feet of shops and retail space. That same month, Westminster Mall plans to begin a major remodeling that will include two new 3,000-square-foot stores.

Despite all the expansion, not everyone in the area agreed that growth was a good idea.

In November, Newport Beach voters rejected a $300-million expansion plan that would have added another 66,000 square feet of retail space to Fashion Island.

And analysts, while not concerned about moderate growth, warn that too rapid expansion could end the boom.