Shopping for a New Identity : Center Hopes to Re-Emerge as an Island in a Sea of Malls

When Newport Center Fashion Island formally unveils the latest stage of its renovation next month, it will mark the end of a massive, $150-million face lift that started more than five years ago.

The last phase of the remodeling will add 70,000 square feet of retail space for 40 new stores and a food court, plus a seven-screen cinema and 1,300-car parking deck. The additional area, totaling 100,000 square feet, will bring Fashion Island’s gross leaseable space to 1.2 million square feet--including five anchors and about 200 stores and services.

But more space isn’t all that will be new. The 22-year-old mall is also altering its course--again. Long one of Orange County’s most glamorous malls, Fashion Island is increasing the number of eateries, entertainment facilities and, most importantly, moderately priced shops. The idea is to emerge from the shadow of archrival South Coast Plaza by aiming to appeal to more shoppers with a bigger and broader selection of merchandise--and prices.

That is in marked contrast to Fashion Island’s direction in the mid-1980s, when the center, owned by the Irvine Co., was out to become the new Rodeo Drive. But the retail behemoth’s attractive location--overlooking the Pacific between Jamboree and MacArthur boulevards--has had problems, in part because it has no easy freeway access. Still, Fashion Island ranks fourth among the county’s malls in terms of taxable sales.

With the final remodeling phase just about completed, Irvine Co. executives are optimistic that the mall’s revenue will be boosted. The company projects that sales, which totaled about $200 million in 1988, will climb to $210 million this year. Sales are expected to reach $270 million in 1990 and $350 million within five years.

In a recent interview with Times staff writer Mary Ann Galante, two executives with the Irvine Retail Properties Co.--Russell H. Lowe, vice president of operations, and Barbara Roppolo, director of operations--talked about Fashion Island, the renovation and where the mega-mall is heading.

Q. What is the philosophy behind the renovation?

Roppolo: In addition to adding 100,000 feet (in the final phase), the most significant fact is that really we are merchandising Fashion Island. The third phase--and the whole renovation concept--wasn’t just to do a remodeling to create more gross leaseable area, but to create different shopping experiences.

Q. What were the different phases of the renovation?

Roppolo: The first phase was Atrium Court. That involved redoing the former JC Penney space into a three-level, 150,000-square-foot center.

Phase Two concerned the area beginning at Neiman Marcus. It involved redoing the old stores where we re-configured. We took the back end of the area across from Neiman’s and created a service shop area. In some instances, we might have trimmed 5,200 square feet down to 2,500 square feet--a much more efficient area, enabling us to add more stores in the same square footage.

The third phase is the additional square footage that we gained entitlement to. That includes a theater and the new shops between Bullocks Wilshire and the Broadway in a horseshoe shape. That probably will total about 50 new stores. And then there’s the 1,300-space parking deck.

We gained quite a bit of new store space. When we were at 1.1 million square feet before, we had the department stores and about 72 mall shops. Now just adding 100,000 square feet, we’re going to come up with almost 200 mall shops. And there’s Atrium Court.

Q. How can you describe the new configuration? I’ve heard, for example, that it maximizes traffic flow.

Lowe: Two major paseos, or walkways, provide direct access and a shopping experience on an architectural theme of a European village. The walkways connect so that you have straight-line access from all areas of the mall.

It’s a diagonal-type pattern that actually forms a cross at a court. There, we have a major architectural feature--a fountain by the design fountain company that designed the fountains at Disney World in Orlando.

The shopper will be able to go in this Mediterranean street scene with the storefronts to walk directly from Bullocks Wilshire into Atrium Court, or go straight to the Broadway-Neiman Marcus wing. The other paseo goes once again directly toward the fountain but leads to the new parking deck and auto court.

Q. I understand that you also have added undercover walkways.

Lowe: There are some elements that preserve Fashion Island’s uniqueness as an outdoor mall--but provide some protection to the elements.

Portions of one of the paseos have a structural steel roof that is covered in a plexiglass-like material. And the other paseos themselves have a large number of arches that serve the double purpose of being pretty dramatic and protecting shoppers from the elements.

So we have preserved the outdoor atmosphere of Fashion Island but brought a little more protection. There are still parts where you’ll walk outdoors.

Q. Why did you add undercover areas?

Lowe: The company considered enclosing the mall. But the uniqueness of Fashion Island--and I think one of the things that keeps in our customers’ mind--is its open-air quality.

Q. How does the remodeling resemble a European shopping village?

Roppolo: It’s the materials that are used in the construction. Tiles, the archways, the winding streets--not just that dumbbell mall with one department store at one end and another department store at the other, with a line of shops in between.

Q. How has the type of tenant mix changed? I know there are additional restaurants and entertainment components.

Roppolo: In terms of the entire mall, about 15% of the space is devoted to entertainment and about 5.7% to theater space. The rest is retail. That means that about three times the gross leaseable area is being used for restaurants (including cookie stores and similar fast-food eateries). We will have about 35 food places--that’s how much emphasis is being put on dining and food.

Lowe: We’ll be adding a second food court, which will be located on the same level as the movie theater. It will open in various stages, along with the theater so it will be open for grand opening, if not before.

Roppolo: The seven-screen Edwards Cinema will probably open mid- to late September.

Q. Tell me what the thinking was on how to reposition Fashion Island away from selling just high-end merchandise.

Roppolo: The perception by the customer--which is the most important thing--is that it was a high-end center with expensive stores. We believe there are parts of our immediate market that we were losing to other shopping opportunities.

Q. What market segments did you believe you were losing?

Roppolo: I’d say teen-agers. That customer spends a lot of time in a mall. It’s 13-year-olds, you know, who shop at your junior stores. The Limited is good evidence of that. That store came in the center in 1983 or 1984. It did a very big volume and is now doubling the size of the Limited store, which proves that if we had the stores we would get that customer.

Q. Whom do you think you were losing customers to?

Roppolo: Surrounding centers. We didn’t have that much to offer. We went all these years, for example, without a record shop.

Q. You’ve been talking about trying to appeal to a stronger junior market. What do you think your customer base has been largely?

Roppolo: Maybe more of the Newport Beach customer--but not as often as we’d like--who is probably not typically that young of a customer. I don’t think we accommodated many of their offspring.

Q. So do you think it’s been a client base of ‘40s age group?

Roppolo: Yes. I also think there’s a customer in Newport Beach whom we haven’t served, who isn’t necessarily looking for that high-end merchandise on a regular basis. I don’t think everybody wants to shop at that high level all the time. I think shoppers need other alternatives. A major shopping center typically has about 120 to 150 stores. For years, we tried to get along with 70 stores.

Q. What are some examples of the types of retailers you’re adding?

Lowe: Examples in the junior market category are Wet Seal, Units, Sun Diego, Inner City, Au Coton, which is kind of a sportswear-like Units. We’ll also be opening the Musicland, a record and tape store.

We’re seeing traditional categories become somewhat blurred. I just turned 40, and I don’t like to think that at the age of 40 my tastes are so different that I can’t shop in the same shops as somebody who’s in the 25-to-35 age group.

We don’t want to draw this picture of Fashion Island customers and target them specifically, but to broaden our merchandising mix, our price points and our concepts and make it more fun. A broad range of customers at a broad range of ages can shop and find everything from the finest and most expensive gown to the trendier swim trunk.

Roppolo: The age of customer loyalty is gone. People look at whatever their retail opportunities might be and are very fickle. They’ve got so much selection, they’re going to take a look at what their choices are.

I think what happened with our customer is that we share them a lot with other shopping opportunities--whether the customer travels to another city or goes to Los Angeles or to other malls in the area. We couldn’t offer them as much selection as they might find elsewhere.

We ended up sharing a lot of our retail Newport dollars or Irvine dollars, for example, with other centers. We hope to regain (those customers). They’re going to come here for a restaurant experience. They’re going to come here for the movies. Now we’ll have 10 theaters instead of two that we’ve been offering them, and 15 or 20 restaurants now as opposed to maybe nine that we had before.

Q. Hasn’t one of the center’s problems always been the fact that if you look at your geographic radius, it is limited by the Pacific Ocean?

Roppolo: Yes, but with changing of the center to what it is now, I think we’re making ourselves more different and emphasizing Fashion Island’s location--and bringing in an architectural statement that is so profoundly different from what you see at the regional mall.

That’s where we’re putting our eggs in terms of that discerning customer who is going to shop someplace that is an extra experience for them. Fashion Island offers not only shopping but dining--and that is unique. I think it’s going to be the restaurant capital of Orange County.

Q. We’ve been talking about the types of tenants you’ve added. Who has gone?

Roppolo: Probably smaller, less recognizable tenants. There are no nationally recognized chains that are no longer here.

Q. How do you compete when you’re only a short drive from South Coast Plaza--which has many of the most prestigious names in retail?

Roppolo: They don’t have Brooks Brothers, or Neiman’s and they don’t have Bullocks Wilshire. I think our Amen Wardy store is very unique. Amen has probably the best selection of designer merchandise in the Western United States.

We have half the number of men’s stores (as South Coast Plaza) and we’re No. 2 in volume. Our men’s category tends to be very good here because the center is so much easier to handle for a man. They don’t want to go to 10 or 11 stores. We’re adding three men’s stores to that in the younger, more affordable category.

Q. Is there upper-end merchandise enough to continue to draw the upscale customer?

Roppolo: About 35% of our new tenant mix will be that upper end of the market.

Q. In terms of competing with South Coast especially, what will bring the customer to Fashion Island? Are you basically relying on at the entertainment and restaurant features as well as the ambience?

Roppolo: And a broader merchandise mix: A coffee bean store, a camera shop, art galleries, poster shops, accessory stores. We recently added the Pottery Barn--we were missing the home category. I think that’s what was missing. I think we lost the customer because we didn’t have a broad enough merchandise selection.

Q. How competitive is the Orange County market for malls?

Roppolo: I think it continues to grow in its competitiveness.

Q. Are we over-malled?

Roppolo: I don’t think so.

Lowe: We still feel that there’s a strong market here. The demographics indicate that we haven’t reached a point where we’re over-malled. Certainly, the national retailers don’t feel that’s the case. We’re still an attractive site.

Q. Of the new space that will be available at Fashion Island in October, what percent leased is it right now?

Roppolo: We’re about 92% leased now. We’ll probably be at 95% when we open.

Q. And when do you think it will be 100%?

Roppolo: The old rule in real estate is that if you’re 100% leased, your rent’s too low. You always want to have space in case you see a store that would really add to your mix and excite your customer. I think we’re going to hover around the 98% leased area by spring.

Q. Is this the last phase of renovation for a while for Fashion Island?

Roppolo: This is the last phase of major construction, yes. (But) we’ll continue to hone and develop. There might be some things that don’t work--which is pretty typical for a shopping center when you add this big a number of new tenants.

Lowe: We hopefully will continue to evolve. Fashion Island obviously is going through a major change now.

Roppolo: The customer is going to be the final judge and that customer is going to tell us what stores were a good idea and what they are looking for.

Lowe: And we’ll make adjustments. That’s how you end up with a world-class shopping center--constantly keeping your finger on the pulse and being flexible enough to change and have tenants that are creative enough to change with you.

Q. Are you at all concerned then about losing your current customer base by changing the tenant mix?

Roppolo: Well, we’re not taking away the stores that our customers responded to. We have only enhanced that (upper-end) presentation. We’ll add to that and round it out with that middle price (level or merchandise).

Lowe: What brought them here will still be here, but enhanced with even more of what the attraction was. On top of that, they’ll have a broader selection.