The Lab: Experiment in Retailing : O.C. ‘Anti-Mall’ Lures Offbeat Stores With Promise of Youthful Patrons

At a time when recession-racked shopping centers are scrambling for customers, a few developers are taking a less-beaten path: They’re trying to build a better trap for aging mall rats.

Consumers in their late teens to early 30s are a potential gold mine because they’re “the only group of people who actually want to spend more of their discretionary time shopping,” said Watts Wacker, a futurist with Yankelovich & Partners in New York.

Unfortunately for conventional retailers, Wacker said, the 20-somethings also are “a group of people who feel unbelievably mistreated by the mainstream.”

For younger consumers on the leading edge of fashion and music, shopping centers are “a corporate selling retail nightmare,” said Michael Pringle, who owns alternative clothing stores in San Diego and San Francisco. “They don’t create the image and energy that’s going to attract people. Malls are built for one purpose, . . . and it ain’t cool for kids.”

Shaheen Sadeghi, a former Orange County surf wear executive, is among those hoping to capitalize on that sentiment. Sadeghi, 39, is gutting an old factory in Costa Mesa to make room for the Lab, a 40,000-square-foot retail, entertainment and restaurant complex to open in November.

The Lab will house about a dozen stores, including Tower Records, which has signed on for an “alternative” outlet; and Urban Outfitters, which opened its first Southern California store last year at Santa Monica’s Third Street Promenade.

Urban Outfitters, based in Philadelphia, appeals to “upscale homeless people . . . people who typically are only recently out of their parents’ house and who haven’t really settled down and created another home,” said Dick Haynes, who founded the company in 1971. It now has 15 locations nationwide.

Haynes, 46, said the current retail climate is like that of the 1960s. “When I first got into the business, the baby boom generation . . . was not being served at all by retailers. Oh, there were some head shops and boutiques, but they were home-grown, homespun and undercapitalized.”

As was the case in the 1960s, today’s 20-somethings “find traditional shopping to be pretty boring,” Haynes said. “What we’re trying to create (at the Lab) is a stimulating environment.”

Privately held Urban Outfitters eschews shopping centers, Haynes said, because “they don’t have the character that we like.”

That anti-mall sentiment is striking a chord with consumers, futurist Wacker said. “In 1985, malls were the third-most-frequented places in our lives, but since then we’ve basically cut in half the amount of time we spend in them.”

One factor in that decline is competition from value-oriented discount chains and warehouse clubs. Another is that young shoppers are going instead to stores like Behind the Post Office Shoes, one of a group of trendy shops on F Street near San Diego’s downtown post office.

Felicity Schaeffer, the 22-year-old owner of the shoe store, says her building was formerly occupied by crack addicts.

“In the beginning, it was definitely pretty scary,” said Schaeffer, who opened her store in 1992 near Behind the Post Office, Pringle’s clothing shop. “We couldn’t stay open at night . . . and I used to be really worried about (the neighborhood) scaring people away.”

But as more stores opened--there are now five along F Street alone--art galleries, coffee shops and music clubs also popped up. “We have DJs come in and play music,” Schaeffer said. “We have people from the clubs who stop by and leave flyers . . . and promote through us.

“It all works together--the music, the clothes, the fashions. . . . We all have the ability to be creative. And I don’t think we could do that in a mall.”

That’s the ambience Sadeghi wants to capture at the Lab.

He’ll start by incorporating the factory’s exposed wooden ceilings, massive iron beams and industrial windows into the design by the project’s New York-based architect.

“We wanted a building where we could keep the honesty, the integrity,” Sadeghi said.

The former Quiksilver Inc. executive doesn’t expect to turn the aging industrial complex on Bristol Street into a replica of Santa Monica’s increasingly hip Third Street Promenade or Los Angeles’ funky Melrose Avenue shopping district. But he’s betting that Orange County’s disillusioned mall-goers, who frequent stores like Sunshine Electric Chair and Zac Attack in Huntington Beach and Costa Mesa’s Bohemian Grooves, will shop at the Lab.

“Malls are all marble and buffed out,” Sadeghi said. “This building is going to be raw, soulful and comfortable . . . a place where you can sip coffee, play chess or read a book. . . . We’re not going to be Melrose, but we will be a sort of a focused neighborhood.”

Among the neighbors Sadeghi hopes to attract are action- and leisure-wear merchants, a hair stylist, a coffee shop, a restaurant and, if city officials agree, a small outdoor entertainment area that would feature local performers.

Tower Records President Russ Solomon hasn’t determined yet just what the “Tower Alternative” store to open in the mall will stock. The emphasis will be on music, Solomon said, but “maybe the easiest way to say what it is is by saying what won’t be there.”

The store won’t stock classical, big band or classic rock. Rather, it will focus on alternative music, including cutting-edge sounds favored by adventurous 20-somethings. “It will be an interesting departure for us,” Solomon said.

Sadeghi said he will seek city permits in September to open the Lab in November.

Skeptics point out that Sadeghi is merely putting a new spin on a familiar theme.

The Lab “sounds like a mini-mall in an old building,” said Keith Fox, spokesman for the International Council of Shopping Centers in New York.

But Fox concedes that, with Tower and Urban Outfitters, Sadeghi has landed “two of the nation’s hottest retailers for that teens-through-20s” target group.

And, unlike some similar ventures, it is in a prime location. The old factory building is near the busy Costa Mesa Freeway and is practically in the shadow of South Coast Plaza, which with its wide array of shops, restaurants and theaters is one of the nation’s shopping meccas.

Though Sadeghi harbors doubts about the future of suburban malls, he concedes that they are not likely to lose their dominance of the retail horizon soon.

Anti-malls, real estate industry observers say, are simply another facet of the ever-changing retail industry.

“People are always trying to come up with a better mousetrap,” said John Shumway, president of Market Profiles, a real estate consulting firm based in Costa Mesa. “And in the rag business it’s even more competitive, so people try to differentiate themselves from the rest of the group.”