A Whole New Mall Game

When making their holiday shopping pilgrimages to Los Angeles, friends Lupe Voss and Todd Loza of Redlands used to head directly to the Beverly Center, the giant Westside mall.

But on a recent shopping excursion, Voss and Loza zipped past the Beverly Center and numerous other enclosed malls. Instead, the pair spent the afternoon shopping outdoors at Santa Monica’s Third Street Promenade, leaving the Beverly Center as a back-up destination.

“If we don’t find what we want here, we go there,” said Loza, 34, a hairdresser, who likes the Promenade’s wide mix of shops and urban setting. “It’s much more fun to people-watch here.”

In a region better known for its malls than museums, many holiday shoppers have discovered an alternative to the shopping mall in the form of shopping streets, such as downtown Orange, Forest Avenue in Laguna Beach and Pine Avenue in Long Beach.

Shopping outside on “Main Street,” instead of in the mall, has become popular nationwide as buyers have grown bored with cookie-cutter shopping centers and as a parade of well-known retailers from Barnes & Noble to Banana Republic have opened street-front shops that attract big, mall-like crowds.

In Old Pasadena, where a once-forgotten collection of historic buildings has been renovated into a sleek shopping district, the peak holiday weekends will see up to 50,000 people a day flood into the area’s more than 200 stores, restaurants and movie theaters. “It’s very competitive [with the malls],” said Marsha Rood, a development administrator for the city of Pasadena.

Shopping malls, of course, will be jammed for the holidays as well. But mall operators across the nation have lost ground in recent years, with no-frills discount centers siphoning off bargain hunters and renovated urban centers drawing upscale consumers seeking new and interesting places to spend their money. Despite a robust U.S. economy, median sales at the largest malls nationwide--as measured on a square-foot basis--slipped 1.3% between 1995 and 1997, according to an Urban Land Institutes survey.

“There are too many malls,” said retail industry consultant Sanford R. Goodkin. “People are looking for more variety in stores and more interesting places [in which] to spend time.”

The trend has already claimed two of Orange County’s older malls. Anaheim Plaza was torn down earlier this decade and reopened as a so-called power center with tenants such as CompUSA, Wal-Mart and Old Navy. The City Shopping Center in Orange was shuttered for an overhaul that will transform the complex into more of an entertainment center.

Malls have fought back by leasing to unique retailers, restaurants and movie theaters to create some of the qualities and excitement of city streets.

Mark Shoifet, a spokesman for the International Council of Shopping Centers, said malls have advantages.

“Right now it’s snowing outside,” Shoifet said last week from the trade group’s New York offices. “People around here like to do their shopping indoors for the most part.”

But in snowless Santa Monica, the shift in shopping preferences can be seen this holiday season on the Promenade, where, even on a blustery weekday afternoon, shoppers and sightseers paraded past a score of shops, cafes and theaters.

Housewares retailer Pottery Barn recently opened a two-story shop here after closing a smaller outlet in adjacent Santa Monica Place, a 140-store mall. The addition of the Pottery Barn and other chain stores should boost the Promenade area’s annual sales above those of Santa Monica Place for the first time. Last year, the mall and the Promenade each had sales of about $130 million.

Bored with the malls, many consumers have turned to the outdoors and places such as Fashion Island Newport Beach for a more stimulating shopping environment.

“You started to feel that the stores [in malls] were the same old thing,” said 23-year-old Renee Fauvre, as she recently searched for gifts on the Promenade. “It’s a more pleasant kind of atmosphere.”

Many malls have grown to recognize the revitalized retail street scene as competition.

“The street retail has definitely improved over the years,” said Evette Caceres, marketing director for the 160-store Beverly Center. “I don’t think it’s a drain on [our] business, but we do look at them as competitors.”

In Santa Monica, the growing popularity of the Promenade and its proximity to Santa Monica Place and its two department stores have transformed the entire area into a powerful magnet for shoppers.

“[The mall’s] success is our success,” said Kathleen Rawson, executive director of the Bayside District Corp., an organization that has helped spur development in the city blocks that include the Promenade. “Most people, if they are here to shop, will go to both areas.”

Until recently, Main Street shopping had been limited primarily to one-of-a-kind stores that offered shoppers unique gifts or antiques. It was only after the arrival of major retailers such as The Gap and Victoria’s Secret that many quaint shopping streets turned into places where serious, mall-like holiday shopping could take place. Large, moderately priced chain stores have even moved into the Beverly Hills shopping district famous for its ultra-high-priced boutiques, and mainstream apparel makers such as LaCoste and Tommy Hilfiger have opened stores to be where the people are.

“I never go to the mall,” said Lori Clark, a 34-year-old picture framer, as she strolled up Pasadena’s Colorado Boulevard with two Crate & Barrel shopping bags filled with Christmas gifts. “All the major stores are here. The Gap is here. Banana Republic is here. Victoria’s Secret is here.”

Next year, holiday shoppers in Old Pasadena will find another major retailer: Saks Fifth Avenue. The New York-based department-store chain has been expanding its presence in outdoor shopping districts with its “Main Street” stores, which are smaller--usually under 50,000 square feet--and more specialized than the Saks mall outlets. Saks recently opened an outdoor store in downtown La Jolla. The two-level Saks in Old Pasadena is one of at least four Main Street stores Saks plans to open next year in California. It should be ready in time for the 1998 holiday shopping season.

“You’ve got a whole lot of malls in the ho-hum category,” said Brian Kendrick, Saks Fifth Avenue vice chairman and chief operating officer. “Main Street shopping sort of breaks that mold. It’s not going to replace mall shopping. But it does offer an interesting, viable alternative.”