Fashion Statement : With Bloomingdale’s, Irvine Co. Weighs Into Retailing Wars

In the end, multibillionaire Donald Bren got his badly needed jewel--a Bloomingdale’s store tailor-made for upscale shoppers at his Fashion Island Newport Beach.

About two years ago, when the famed New York retailer said it would open only one store in Orange County, developer Bren began a battle for Bloomingdale’s against longtime local developer Henry Segerstrom, who owns posh South Coast Plaza in Costa Mesa. Both waged intense campaigns for the prestige of having the glamorous retailer in their shopping centers.

The stakes were high. Owned by Federated Department Stores, Bloomingdale’s is considered a major catch because it would create hundreds of jobs, bolster sales tax receipts and offer a unique attraction for shoppers.

Fashion Island has needed a new attraction. Although South Coast was already anchored by such heavyweights as Nordstrom, Bullock’s and Saks Fifth Avenue, Fashion Island was better known for its designer boutiques than major anchor tenants.

In the past five years, two of Fashion Island’s major department stores--Buffums and I. Magnin--closed as the national retail slump took its toll. Fashion Island moved to broaden its appeal by bringing in trendy restaurants and discount retailers such as Circuit City.

On Wednesday, Bren and his Irvine Co. won out. Federated picked Fashion Island as one of four locations selected for Bloomingdale’s long-awaited entry into California.

“This is a major kick for Fashion Island,” said Greg Mickelson, a longtime retail broker in Orange County and vice president of development at Koll Real Estate Group in Newport Beach.

“Clearly, South Coast Plaza would have loved to have Bloomingdale’s, but for them it’s just a fifth grand jewel. For Fashion Island, it will be their biggest jewel,” he said.

Irvine Co. Chairman Bren issued a statement calling the Bloomingdale’s decision a “marvelous Christmas gift for the entire community and the perfect way to start a promising new year.”

Frederick O. Evans, president of the retail division of Irvine Co., which owns Fashion Island, said discussions with Bloomingdale’s were intense in recent years. Bren flew to New York for talks with top Bloomingdale’s executives, he said.

“Bloomingdale’s is the finest fashion outfit out there today. They match the unique lifestyle we have here. It’s a perfect fit,” said Evans.

Bloomingdale’s will move into the 186,000-square-foot Broadway store and may add an upscale Bloomingdale’s home store, said Evans.

The Fashion Island department store will open in November 1996, the same time as the other three California locations. Bloomingdale’s will take over Broadway’s old lease, which doesn’t expire for at least 10 years, Evans said.

“All shopping centers need strong anchors, but we’ve had some, like Broadway, which ran into trouble in the recession,” said Evans. “This gives us another strong anchor.”

Fashion Island’s reputation as a haven for well-heeled shoppers and proximity to affluent coastal communities undoubtedly attracted Bloomingdale’s, retail brokers said.

“It’s a big victory for the Irvine Co.,” said Greg Stoffel, a retail marketing consultant in Irvine. “Fashion Island has done a better job of appealing to that upper-end shopper. And this announcement is a further example of that.”

Segerstrom and other South Coast executives would not comment Wednesday.

“Upscale shoppers are sick of fighting the gridlock around South Coast Plaza,” Stoffel said. “I think Bloomingdale’s wanted to be closer to more of their type of shoppers--and Fashion Island gives them that.”

Fashion Island opened in 1967 with 22 stores, including anchors JCPenney, Buffums, the Broadway and Robinsons. In 1978, upscale Neiman Marcus became an anchor at the center, which now has nearly 200 stores.

In 1989 Fashion Island underwent a $100-million renovation that transformed the center into a European village look-alike with outdoor courtyards, fountains and ponds.

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In the retail slump of recent years, the mall best known for catering to the rich and powerful added such discount stores as Circuit City, which replaced Buffums in 1991. When I. Magnin recently closed, a Bullock’s Women’s Store moved in. Most recently it added more designer boutiques such as Betsey Johnson and upscale restaurants such as Wolfgang Puck Cafe and Twin Palms.

“People always thought Fashion Island was a great spot, but not so strong on retailing as others,” said Mickelson. “They didn’t really have a leading retailer. But now they’ve got what many people perceive as the best you can get. There’s going to be some serious retailing there.”

Having a strong anchor such as Bloomingdale’s will help if the Irvine Co. makes good on plans to create a large publicly traded real estate trust that could include Fashion Island among its holdings, specialists said.

“It makes Fashion Island that much better of a mall and clearly Wall Street would be that much more attracted,” said Craig Leupold, analyst with Green Street Advisors in Newport Beach.

Bloomingdale’s reputation is derived largely from its flagship store on 59th Street in New York City. The store offers glamorous fashions presented in ornate displays using lights and other glitz.

One of the largest shopping malls in Southern California, South Coast Plaza was the early favorite of Bloomingdale’s and by late last year seemed a shoo-in.

Bloomingdale’s chairman and chief executive officer, Michael Gould, stated publicly early this year he would prefer to build the store at South Coast Plaza. But time pressures and other roadblocks emerged.

Major department stores at South Coast Plaza reportedly weren’t eager to add a major competitor and building a store started to sound too costly and time consuming to Bloomingdale’s, local brokers said.

“South Coast was our primary target,” said Bloomingdale’s president Jeffrey Sherman on Wednesday. “But as time went on, it became obvious that we weren’t going to be able to make a deal . . . within the time frame of getting a store opened in Orange County in 1996. And that was our goal from the outset--to have a store in Orange County next year.”

“We’re not at all regretful of our location in Fashion Island,” Sherman said. “It was simply a matter of a time frame--getting into Orange County when we needed to be there.”

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Times staff writer Greg Johnson contributed to this report.

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Island Is Bloomie’s Oasis

Bloomingdale’s will open its only Orange County store at Fashion Island Newport Beach. A look at the high points of the center’s nearly 30-year history:

1967: Irvine Co. opens Newport Center Fashion Island; JCPenney, The Broadway, Buffums and Robinsons anchor a group of 22 stores.

1982: JCPenney closes; Amen Wardy moves into remodeled Penney Auto Shop.

1983: Donald Bren buys Irvine Co., plans to renovate Fashion Island into Mediterranean mega-mall.

1984: Penney store is remodeled into complex of specialty stores called the Atrium Court.

1989: $100-million renovation completed; 60 new shops added to mix.

1990: Atrium Court gets finishing touches on its own $9-million renovation.

1991: Center name changed to Fashion Island Newport Beach; Amen Wardy & Buffums close.

1993: Trendy eatery Five Feet Too closes; Bren aims for broader economic appeal by opening Cheesecake Factory and Circuit City.

1994: Hard Rock Cafe opens.

1995: Wolfgang Puck, Chimayo and Twin Palms join Island’s restaurant mix; Bullock’s Women’s store opens.

1996: Bloomingdale’s replaces The Broadway.

Sources: Times reports and Fashion Island Newport Beach