Malls Hope for Holiday Rush : But Retailers Wonder How Strong the Demand Will Be After the Earthquake

Throughout the nation, retailers are decking the halls and expecting the best holiday shopping season in years.

The Christmas holidays are especially important to retailers, given that 40% of their sales typically come during that time of year. But can shopping malls in the San Fernando Valley area, still haunted by Southern California’s deep and lingering economic woes and rebuilding from the January earthquake, also hope for a merry Christmas?

Surprisingly, many say yes.

“We’re feeling that customers are buying more now,” said Annette Bethers, marketing director at the Topanga Plaza mall in Woodland Hills. “We feel it’s going to be an extremely strong Christmas.”

Across the Valley, many malls that have finished their earthquake repairs--or escaped major damage in the first place--are reporting sales increases of 10% to 30% over this time last year. Some mall retailers even say sales are so brisk that year-to-date totals are up from last year’s numbers--despite temporary closures after the quake.

But while some Valley-area malls are benefiting from pent-up consumer demand, layoffs in aerospace and other industries continue to plague the region, warned John Golisch, chief retail consultant in Southern California for the business services firm Arthur Andersen. And he wondered if the sales gains reported by some stores will last, since so far they’ve come largely at the expense of closed malls and from the influx of earthquake insurance and federal assistance funds.

Whether sales increases “will be sustaining when the rest of the capacity comes back will really depend on the mood of consumers,” he said.

One less-than-upbeat consumer is Pat McGarry of Sherman Oaks, who enjoyed a cup of coffee while his wife shopped recently at the Fashion Square mall in Sherman Oaks. “It’s my great hope,” he said, to persuade his wife to spend less this year because his earthquake insurance didn’t cover all of their damage. “I’m sort of resigned. That’s going to cut into Christmas this year.”

And not all local shopping centers are toasting the holidays. The quake-devastated Northridge Fashion Center remains closed, and only the Broadway and Sears stores there will reopen next month, in time for Hanukkah and Christmas shoppers.

Robinsons-May is the only store open at Laurel Plaza in North Hollywood, and mall management still won’t say if the center will ever reopen. And other malls that were partially closed for several months while undergoing repairs can hardly expect to make up for lost business just from the Christmas season.

With the Bullock’s Northridge mall store not due to reopen until fall 1995 and the Sherman Oaks Bullock’s fully reopening only this month, Michael Steinberg, chief executive of Macy’s West/Bullock’s, acknowledged that even a huge holiday season won’t compensate for lost sales in the Valley this year.

But after four years of hard times for Southern California retailers, he’s optimistic. “I really believe that we’re out of the worst aspects of the recession,” Steinberg said. “That translates itself into retail business.”

Brian Pickering, vice president of City Freeholds Inc. USA, an Australian company that owns Fashion Square in Sherman Oaks, is also expecting its best Christmas season in three years. But so far this year the mall’s sales are down about 30% because it was closed for two months after the quake, the parking garage was badly damaged and the Broadway and Bullock’s stores are only now back to normal.

“We’re never going to pick up that lost period,” Pickering said. “There were a lot of apartment units damaged, especially in this area. We lost a lot of our customer base.”

Most retail chains say they’re not planning any extra sales events for their quake-rattled stores. Indeed, the Northridge Broadway and Sears, while planning splashy reopenings, are mainly relying on luring former customers back to familiar surroundings.

Given the damage at several malls, and with the Northridge mall basically closed all year, shopping traffic has recirculated through the Valley and their losses have been others’ gains. Indeed, spokesmen at the malls that have been experiencing strong sales admit that the increases are largely due to the customers they’ve picked up from Northridge Fashion Center and other heavily damaged shopping malls.

Once the Northridge mall fully reopens next year, at least some of the increased traffic that Topanga Plaza and others are experiencing may evaporate--which again makes this Christmas season so critical.

Nationally, 61% of consumers said they plan to spend more money or the same this holiday season, and it was the most optimistic forecast since 1990, according to a survey conducted in September by Chicago research firm Leo J. Shapiro & Associates.

But while this region’s retailers should see an improvement in Christmas season sales, given the depressed local economy recently “it would be relatively easy to beat last year’s numbers,” noted George Rosenbaum, Leo J. Shapiro president.

What’s more, after a tough year, the mood of Valley consumers might best be described as mixed.

While shopping recently at Topanga Plaza, Florence Sussman of Calabasas and her mother, Ida Giniger of Encino, said they were “feeling more optimistic” and planned to spend more on their various children, grandchildren and great-grandchildren this holiday season.

But Annie Farkas, shopping at the same mall, said she will spend less because she and her husband had no earthquake insurance and now have to repay the $25,000 Small Business Administration loan they used to make repairs to their Woodland Hills house. Also, the new mother has cut back her hours at her teaching job. But her sister, Lisa Aamoth of North Hills, said she’ll spend more this year because her $80,000 in earthquake damage was covered by insurance--and her newborn has added to her shopping list.

Still, many local mall stores expect brisk sales this holiday season, and they are stocking up on items they think will be hot sellers.

Vicky Crisp, co-manager at Topanga Plaza’s Victoria’s Secret store, said sales are booming and she can’t keep the “Miracle Bra”--one of the new gravity-defying push-up varieties--in stock. She also expects silk lingerie, flannel goods and thermal night wear to sell well for the holidays.

Jennifer Maccarone, manager at the Imaginarium toy store in Topanga Plaza, which was closed for only a few weeks after the quake, said her store’s sales are up 20% so far this year.

Besides gaining sales while the Imaginarium store at the Northridge mall is closed, she said her store is also getting a boost from the “baby boomlet” of the past few years, and anticipates strong sales this holiday from such classics as train sets. The Crate & Barrel shop in the Topanga mall is also seeing “gangbusters business” for its dishes, glasses, pots and pans, said area manager Geri Given.

At the Sherman Oaks Galleria, Kamran Hedjasi, assistant manager at Sam Goody, said sales of recorded music and videocassettes are up 5% over last year, in part because of a program the mall started for frequent shoppers to earn discounts, coupons and free merchandise. Hedjasi also sees a boost to holiday sales from the release of Walt Disney’s “Snow White” on video this month. At The Limited women’s clothing store in the Galleria, co-manager Jocelyne Maalouf said sales have picked up recently and “we’re crossing our fingers that we will have a good season.”

Some malls say the earthquake, while destructive, forced their anchor department stores to modernize facilities and overhaul merchandising strategies, which should also help sales. The Robinsons-May store at Topanga Plaza, for instance, which is reopening Nov. 10, will have more selling space, new architecture and expanded furniture, consumer electronics and housewares departments.

At the Sherman Oaks Galleria, the two Robinsons-Mays were also updated and merchandise was rearranged so that women’s apparel is now in one store, men’s apparel and home goods in the other.

While all the local malls that escaped major earthquake damage say their sales are up strongly over a year ago, as more rival stores reopen, it remains murky exactly which malls will end up with the biggest increase in shopper traffic.

Michael Strle, vice president at the O’Connor Group, owner of the Promenade in Woodland Hills, said he’s optimistic that his mall will continue enjoying the 30% increase in comparable-store sales it’s had since the earthquake--even after other shopping centers return to full operation. Patrons of other malls “have rediscovered the Promenade,” he said. “We hope we’ve converted them to regular shoppers.”

Mary Callahan, manager at Panorama Mall in Panorama City, reported sales are up 35% there over last year. The small center, whose only department store is a Broadway, “is the only game in this part of town,” she said. Callahan also hopes to hold onto customers she’s picked up since the quake because, she believes, the rebuilt Northridge mall will be even more upscale when it reopens, and shoppers will still be looking for bargains.

At the Fallbrook Mall in Canoga Park, General Manager Eric Knudsen also thinks his discount center has benefited from customers’ hunting for low prices. Sales there are up 30% so far this year, and the JC Penney outlet’s sales were so strong it opened a second floor last month, he said.

Even malls relatively far away from Northridge say they’ve picked up sales that would have otherwise gone to Northridge Fashion Center. At Media City Center in Burbank, “business is booming,” said General Manager Daniel Millman. “I think we’ll finish the Christmas season 20% ahead of last year.” And the Glendale Galleria, which attracts customers from all over Los Angeles, says the percentage of its sales to Valley residents has increased to 24% from 14% before the quake.

At the Valencia Town Center, 1994 “has really been a fabulous year for our merchants,” said General Manager Kristin Mueller, because of Northridge Fashion Center’s closure, damage to freeways that encouraged local residents to shop locally and an improving economy. Mueller expects such a busy holiday shopping season that she’s planning to run shuttles from off-site customer parking areas.

In a possible sign of things to come, though, Ruth Ann Moore, marketing director at the Antelope Valley Mall, said she’s noticed a tapering off from sales increases seen immediately after the quake, as other malls get back to full strength. She still expects to finish the year with total sales up about 10%, and is encouraged by growth in the Antelope Valley.

But some mall operators are wise enough to admit that predicting retail sales is a guessing game, and guessing wrong can leave retailers stuck with unsold inventory. “I think everyone would like for it to be a gangbuster holiday season,” said Sherman Oaks Galleria General Manager Joy De Backer. “Is there a guarantee for it? No.”

Shopping Mall Update

Heading into the all-important holiday shopping season, some local malls are limping along with earthquake repairs still under way. Here is a quick reference guide to what is open, and what is not. Shopping mall: Antelope Valley Mall Status: All stores open. *Shopping mall: Fallbrook Mall Status: Sears store closed permanently; no replacement announced yet. All other stores open. *Shopping mall: Glendale Galleria Status: All stores open. West parking structure to reopen Nov. 15. *Shopping mall: Laurel Plaza Status: Robinsons-May store open. All other stores closed. *Shopping mall: Media City Center Status: All stores open. *Shopping mall: Northridge Fashion Center Status: All stores closed (except for three banks, two restaurants and three auto retailers in outlying parking lot). Broadway will reopen Nov. 4; Sears will reopen Nov. 17. *Shopping mall: Panorama Mall Status: All stores open. *Shopping mall: The Promenade Status: Saks Fifth Avenue closed, to be replaced by AMC movie theaters. All other stores open. *Shopping mall: Sherman Oaks Fashion Square Status: All stores open. Fourth floor of Bullock’s officially reopens Oct. 18 (Former I. Magnin store, which closed before the earthquake, is being partially used by Bullock’s on a temporary basis.) *Shopping mall: Sherman Oaks Galleria Status: All stores open. *Shopping mall: Topanga Plaza Status: Robinsons-May store to open Nov. 10. Four shops inside the mall to open by mid-November. All other stores open. *Shopping mall: Valencia Town Center Status: All stores open