Galleria Hopes Make-Over Will Help Lift Sales : Retail: Once the Valley’s quintessential mall, just 92 shops remain, down from 122 last year. Fashion Square competition hurts, analysts say.
Lunch-hour sunbeams splash through the skylight above the half-occupied Sherman Oaks Galleria food court while a handful of people wait for Italian takeout and a bored-looking sushi eatery attendant leans on his chin.
“This is the closest thing to my office and the food’s good, so I come back,” said Aude Barajas, picking at her salad.
But the freshly renovated eating area contrasts with the darkened store fronts that lurk around the corner, polluting the commercial community around the entrance to Robinsons-May.
One of the Robinsons-Mays, anyway.
The Galleria has two as anchors and no other department stores, making it unique among shopping centers and putting it in a situation that many analysts deem unworkable at a mall that faced its share of challenges even before the announced marriage last October of the department store chains, both of which were owned by St. Louis-based May Department Stores.
“They have really had problems getting occupancy long before they had the issue of the two tenants being the same one,” said Michael Lushing, a vice president and real estate analyst for commercial real estate brokerage CB Commercial in Sherman Oaks.
While Galleria management said the occupancy rate has risen over the past year to 87%, an informal survey of the mall last week showed only 92 shops in the mall, down 19% from 113 in 1989, the year with the highest available figure of retail units. A 1992 directory of shopping centers published by the National Research Bureau, a Chicago-based marketing research company, listed the mall with 122 stores.
The directory also showed retail sales for the Galleria at $200 per square foot, compared to $350 per square foot at the nearby Sherman Oaks Fashion Square. However, the survey was taken before the 13-year-old Galleria began renovations last year and shortly after Fashion Square had undergone its own make-over.
The threat posed by Fashion Square’s renovation led the Galleria to replace dark gray and burgundy carpets with cream-colored marble flooring accented in green and terra cotta, install seasonal flower boxes, expand its food court and remove four seldom-used flights of stairs. It was the first make-over for the Galleria and was sorely needed for the mall to remain competitive in a harsh retail environment that requires outlets to update their looks frequently, analysts said.
The mall aims at the mid-range customer and includes outlets such as Judy’s, Victoria’s Secret, Sam Goody Music & Video, Stride Rite Bootery and the Gap.
The Galleria had gained fame as the quintessential San Fernando Valley shopping experience in 1982, two years after it opened, with the song “Valley Girl” by Moon Unit Zappa, which made phrases like “grody to the max” and “gag me with a spoon” part of teen-speak nationwide, and a subsequent movie by the same name.
The exposure brought a 30% increase in foot traffic to the Galleria, mall officials said in 1983. But Lushing said the mall has never reached 100% occupancy and it never recovered from its reputation as a cumbersome shopping center.
The Galleria is jointly owned by Prudential Insurance Co. of America and a Japanese firm whom Prudential officials declined to identify. General Growth Management Inc., a subsidiary of Minneapolis-based General Growth Centers Companies, Inc. which owns and operates several malls across the country, manages the mall.
While the mall’s location at the intersection of the Ventura and San Diego freeways is ideal, analysts said, a poorly designed parking structure and difficult access to the mall turns shoppers away in droves.
Customers say the parking lot funnels traffic through just a few exits, making for long lines as attendants collect parking stubs.
“It’s very annoying and causes traffic problems and from a consumer’s standpoint, it’s less than ideal,” said David Rosa, who lives and works nearby and often lunches at the mall.
Mall officials said they have “committed a lot of money” to make the underground garage work, and that they hope customers will get more comfortable with the arrangement with time.
“We have just done a whole lot of things to make it more user-friendly,” said general manager Carrol Beals, including new signs, lighting and graphics.
Competition from the redesigned Fashion Square about 1 1/2 miles away has also hurt, analysts said. There, the owners spent $35 million to transform an aged open-air promenade to a two-story enclosed mall with 150 largely upscale retailers, including Bullocks, I. Magnin and Broadway.
The resurgence of Fashion Square, which completed its renovation in late 1990, and the establishment of numerous stand-alone retail outlets along Ventura Boulevard made the Galleria’s redesign necessary.
“The remodel that they’ve done is nice,” said one retail analyst who declined to be identified. “But the question comes up, is it too little, too late?”
Even teen-agers, who once worshiped the Galleria as the Mecca of shopping in the San Fernando Valley and immortalized it in “Valley Girl” as being “so bitchen’,” now take a blase view of the three-story shopping center.
“Everyone was coming here after school before Fashion Square remodeled and now everyone goes there,” said 19-year-old Dora Stickney, who had been coming to the Galleria “since I was in elementary school” and now works at one of the two Robinsons-Mays.
Robinsons-May officials did not return phone calls.
Having twin department stores is an unworkable arrangement, many analysts say, because there is not enough traffic through the mall to support both stores and it confuses consumers.
“What happens when you run a sale on shirts, are you going to have the sale at both stores?” asks Robert Kahn, publisher of Retailing Today, a newsletter. “If you don’t, how are you going to tell the customers which store to go to? If you do, what happens if you’re out of a size, are you going to tell the guy to go to the other end of the mall and see if they have it?”
The split stores is a temporary situation that won’t last long, said the head of the monthly Lafayette, Calif.-based publication. The solution, Kahn and others said, is to either give the stores different names with distinct product lines and marketing, or get another tenant.
“If the merchandising is different from one store to the other in terms of price points and public perception, they’ll do just fine,” said Tony Pann, president of the Agoura Hills-based commercial real estate firm Tony Pann Inc.
But reducing the overhead of maintaining separate names and marketing was an impetus for the merger to begin with, analysts said.
Getting a new department store to move in, particularly in this sluggish economy, won’t be easy, and Galleria management said they want to give the current arrangement a try.
“The whole situation with the anchors is really very new,” Beals said. “Give us some time to deal with the situation and live with it and experience it.”
Some analysts agreed.
“A short-term test in this economy isn’t fair,” said Frank Marino, retail broker at Grubb & Ellis Commercial Real Estate Services in Sherman Oaks. “They should hang in there a couple of years, and I would think that that location would serve them well over time.”
The mall’s smaller tenants said business has started to turn the corner since the renovation.
“Business is picking up little by little,” said a manager at Howick’s Fine Gifts who declined to give her name. “It hasn’t gotten back to what it was before the remodeling, but it still is picking up.”
“At least Robinsons-May is staying here, so far, and that’s a good sign,” said Harry Sahelian, who bought the Buccaneer Smoke Shop six years ago.
But the shop, one of the mall’s original tenants, is surrounded by the carcasses of foregone ventures--a fact that neither escapes nor disturbs Sahelian, he said.
“Some people stay 10 years, some 10 months, some 10 weeks,” Sahelian said. “It’s an endless cycle, especially when the economy doesn’t behave the way it should. I have seen many ups and downs.”
