Mall Reopening Viewed as Win, Lose Situation : Retail: Store operators, from wary to welcoming, await Fashion Center reopening, and its effect on their bottom lines.
A retail venture with annual sales of $350 million does not disappear from the economic landscape without leaving large ripples in its wake. And when it reappears on the scene, spruced up for a spectacular comeback, it is likely to cause a few shock waves as well.
So it is not surprising that merchants across the San Fernando Valley are eyeing the imminent reopening of the earthquake-devastated Northridge Fashion Center with more than idle curiosity. Some nearby retailers experienced a welcome windfall from the mall’s displaced customers and are now wary about losing that spillover business. Other area shopkeepers, meanwhile, saw business nose-dive without the mall as a magnet and are looking to the refurbished center to bring customers back.
“I’d say that, as the mall opens up, the businesses that are closest to Fashion Center will see a resurgence in business. The farther away you are from Fashion Center, the more you will see a downward impact,” said Scott Spooner, president of the Northridge Chamber of Commerce.
The 206-store shopping center, one of Southern California’s largest, has been more or less out of commission since the January, 1994, Northridge earthquake leveled four of its six department stores, toppled pillars inside the mall and destroyed two outdoor parking decks. It has limped along with two department stores--The Broadway and Sears, Roebuck & Co.--as the only tenants since November.
But after numerous delays, it finally looks like a majority of the Fashion Center’s anchors and specialty stores will be back in operation by the end of the summer. An expanded J.C. Penney is scheduled to open June 14, while the mall’s remodeled interior is expected to open July 17 with 70% to 80% of its spaces leased, said Annette Bethers, the mall’s marketing director. Bullock’s and Robinsons-May are expected to open in August and September.
Many of the estimated 50,000 customers who visited the Fashion Center daily before the earthquake appear to be shopping at other regional malls, where revenues have jumped dramatically.
At the 135-store Topanga Plaza in Canoga Park, 1994 sales were up 30% to 50% over the year before as homeowners armed with insurance checks replaced their damaged belongings and former Fashion Center customers found their way to the mall that is geographically and commercially closest to their old shopping grounds, said Mary Lankester, the mall’s marketing director.
The Glendale Galleria, the upscale Promenade at Woodland Hills and the discount Fallbrook Mall reported similar sales increases for 1994, gains their managers attribute at least partly to former Fashion Center shoppers. Even The Oaks in Thousand Oaks picked up a few West Valley residents.
“When the earthquake first hit, the Valley stores were closed, so a lot of shoppers discovered The Oaks and realized it wasn’t that far away,” said Diane Brandes, marketing director. “I’m sure that when the Fashion Center reopens, there will be a number of customers we will keep. But, for convenience purposes, we expect the people who live in Northridge will shop Northridge.”
None of the competing shopping centers made long-term hiring or expansion plans based on the quake-inflated 1994 figures. Their managers say they are mindful that the Fashion Center, whose refurbishment and reopening will be promoted heavily, poses a threat to their bottom lines.
The operators of Topanga Plaza, in particular, do not plan to relinquish any of the customer base they built after the quake without a fight.
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According to Lankester, Topanga Plaza’s advertising in coming months will emphasize the popular stores, namely Nordstrom, and Crate and Barrel, that it has but Fashion Center does not.
The ad campaign will also focus on Topanga’s open-air parking lots, hinting that they will be safer than those at the Fashion Center in the event of a quake. A Fashion Center worker was severely injured when the mall’s parking decks collapsed during the earthquake. And the ad campaign, Lankester said, “addresses customers’ concerns over the safety of indoor parking structures.”
“Allowing for a short drop immediately after Fashion Center opens due to the curiosity factor, we still expect to be competitive,” Lankester said.
For some small retailers without the benefit of big advertising budgets, the mall’s reopening is more worrisome. “The Northridge mall being closed has been a wonderful thing for my store,” said Laura D’Angelo, who owns a Reseda Boulevard gift and rubber-stamp store, Kids at Heart. “We have gotten a lot of new customers who will say, ‘Wow, I’m so glad I finally found this place.’ ”
D’Angelo said last Christmas was her best in 4 1/2 years, a bonus she directly attributes to the Fashion Center being closed. In response to customers’ requests, she stocked her store with more men’s gifts and upscale items. The busy season provided a much-needed infusion of cash and motivation after months of recovering from the quake, D’Angelo said. With the mall reopening and the strip mall where her store is situated under renovation, though, she fears the summer months “will be like a bowling alley--dead out here.”
For other merchants, though, the mall’s official reopening cannot come soon enough. The Lingerie for Less store situated in The Grove shopping center on Tampa Avenue two blocks from the Fashion Center had sales of about $2,000 a day before the earthquake, compared to $800 a day now, a drop that resulted from the mall not being open to draw traffic into the area, said manager Danay Poindexter.
“People forgot this little center was here. Everyone figured the mall was broken up, so it deterred people from coming this way,” Poindexter said. She added that, even though the Fashion Center is her competition--with a Victoria’s Secret and the department stores--”after looking through the mall, people come here because a mall doesn’t have everything.”
Harry Duhanci owns a collectibles and gifts store, Caprice, that was at Fashion Center for 15 years before the earthquake. A year ago, after the mall’s reopening was delayed, he relocated to a site at The Promenade in Woodland Hills, a smaller mall that does not get as much foot traffic as the Fashion Center, he said. But he will return to the Northridge mall.
Duhanci said that by relying on his mailing list of regular customers and keeping a smaller inventory he has been able to keep his shop afloat without as much of a dropoff in sales as he had expected. But he expects that once he is back in Northridge, business will be better.
Mall officials say they plan to launch an aggressive advertising campaign over the next several months to lure customers. Direct mail, network and cable television, billboards and radio ads will be used to promote the shopping center’s updated appearance and reconfigured mix of stores, with more upscale and family-oriented retailers.
“Being a brand-new mall, I think it will draw lots of new customers,” Duhanci said. As for him, “It’s like when your house is damaged in the earthquake, you just want to go back to your home, where you belong.”
