New Mall Ups Ante for Rivals

By LESLIE EARNEST and MATTHEW EBNET

Nov. 6, 1999 12 AM PT

TIMES STAFF WRITERS

With the holiday season looming and e-commerce coiled like a question mark over the retail scene, three tony Orange County shopping centers are set to do battle for the hearts and wallets of well-heeled shoppers.

At the center of the tug-of-war are South County consumers who previously spent wads of Christmas cash at South Coast Plaza in Costa Mesa and Fashion Island in Newport Beach.

Thousands of these shoppers have already rerouted their vehicles since the September “grand reopening” of the former Mission Viejo Mall. Now dubbed the Shops at Mission Viejo, it boasts South County’s first Nordstrom. Following a massive face lift, the mall attracted a million visits last month, a number mall officials expect to double for November and December.

“All signals show a very good start,” marketing director Judy Bullockus said. “We’re extremely pleased.”

Less pleased, no doubt, is South Coast Plaza, Orange County’s dominant shopping center, which stands to lose at least $100 million annually to Mission Viejo.

Even Jim Nordstrom, a vice president of the Seattle-based retailer, teasingly encouraged the competition during a recent speaking engagement at the new Mission Viejo store, which will vie for customers with the chain’s South Coast Plaza outlet. “You guys can beat South Coast Plaza,” he said. “Come on.”

While neither South Coast nor Fashion Island admits to being the slightest bit worried about the new competition, both have stepped up marketing.

South Coast Plaza launched a new outdoor advertising campaign this year, splashing its name on Orange County bus stop shelters, including one directly across the street from the Mission Viejo mall. And just as the remodeled mall was reopening, South Coast Plaza mailed fliers to 15,000 high-income Orange County households heralding its own renovations and new stores.

“There are a lot of new options in this marketplace right now,” marketing director Debra Gunn Downing said. “So I think every shopping center has to talk to the customer about what makes it special to get its share of the customer’s time and money.”

Meanwhile, Fashion Island will blanket cities with six mailers this fiscal year, whereas in the past it sent only one. The missives will go as far south as San Clemente and inland to the upscale communities of Anaheim Hills, Lemon Heights and Cowan Heights.

The malls aren’t stinting on services and attractions to lure customers, either.

South Coast Plaza has just opened a fourth valet center for customers willing to pay $5 for such services. And Fashion Island on Friday staged its annual holiday kickoff, the lighting of what it claims is the nation’s tallest natural Christmas tree.

“It’s marketing, I know, but it works on me,” said Jayne MacArthur, a shopper from Fullerton, as she gazed up at the tree Friday. “The malls just have to compete. . . . [and] this kind of thing matters. I look forward to this every year.”

However the season pans out, it will be livelier this Christmas than last for the Mission Viejo mall, which during the last holiday season had just 50 stores. This year, 130 stores will scour the horizons for shoppers.

“We’re definitely looking 20 miles south,” said Bullockus, the marketing director. “We feel we’ll go down to Carlsbad . . . attracting customers.”

The big winner in this struggle to bag shoppers could be the consumer, said Malachy Kavanagh, spokesman for the International Council of Shopping Centers.

“Generally,” he said, “when you have that type of competition--and it is going to be pretty fierce competition--the one who is going to benefit most is the consumer because they are going to be very promotional.”

With all three centers now boasting high-end stores, some consumers say geography has become the deciding factor regarding where they will shop. South County residents say they consider their refurbished mall a godsend and can’t imagine why they would hurl themselves into the northbound traffic to shop.

“It’s location, location,” said Jim Brady, a banker from San Clemente. “I used to go to South Coast Plaza, because I didn’t really feel like I had any other options. (Now) at least I have a place to go shop that is nice.”

High-end department stores with well-known names, such as Nordstrom and Saks--which will be at both South Coast and the Shops--serve as magnets, pulling in customers who will then shop in other stores and eat at mall restaurants.

“The Nordstrom makes it feel like a place I want to go shopping,” said San Clemente resident Mei-Feng Harwood, shopping recently at Mission Viejo. “This place still seems a little new, though.”

To be sure, many shoppers at the Mission Viejo center say it lacks character and needs time to mature before it will become a pleasant respite from home, “a shopping experience,” as one put it.

“It is a little sterile here,” Laguna Niguel resident Theodore Mannaert said. But “the shops are nice. We have an option. I’m sure it’ll get better.”

An “overall shopping experience” is precisely what’s pitched by officials at Fashion Island, an open-air center rimmed by hundreds of palm trees and featuring fountains, a koi pond and an ocean view. Some Fashion Island shoppers see the center as a city unto itself, separate somehow from Newport Beach.

“It’s the atmosphere that makes me come here,” said Heyman Levy, an ascot-wearing man who lives in Tahiti and travels to Orange County up to six times a year just to shop at the Newport Beach or Costa Mesa centers.

“I do like the stores at Fashion Island,” said Levy, who was shopping there on a recent weekday. “I buy a lot of clothes. When I want to do the heavy-duty shopping, I go to the South Coast, and if I want to shop and read a newspaper, I come to Fashion Island. This is the best shopping around.”

Both Fashion Island and South Coast Plaza are considered tourist destinations. Fashion Island’s pamphlet directory welcomes shoppers in Spanish, German and Japanese.

In July, Fashion Island revamped its advertising campaign, employing local artists to depict “the true essence” of shopping at that center, Robinson said. Fashion Island boasts an array of popular restaurants--including P.F. Chang’s China Bistro, Cheesecake Factory and Hard Rock Cafe--and has about 13 million visitors a year, Robinson said.

Overall sales this year are up 6% compared to last year. And while retail experts say the center could lose more than $28 million annually to the Mission Viejo mall, Robinson said she’s not worried.

“At the end of the day, if the customer wants to do outdoor patio dining, they’re going to come to Fashion Island,” she said.

Eating and lollygagging aside, many Orange County shoppers say when they’re ready for “serious shopping,” they head for South Coast Plaza, which by the end of the year will have 275 stores and restaurants--35 more than Fashion Island and twice what will be available at the Shops at Mission Viejo by year’s end. One of the nation’s highest-grossing malls, South Coast Plaza also claims 118 stores and restaurants it says can’t be found elsewhere in Orange County.

And the center is determined to let residents know about its offerings and its ongoing renovation.

“A New South Coast Plaza” mailers--which unfold to a yard long--list coming milestones, including the installation of a “garden terrace” and the creation of bridge over Bear Street that will link the main part of the center with the former Crystal Court. It also heralds the opening of up to 25 new or remodeled stores--all of which will be ready by Christmas--including Orange County’s first Crate and Barrel home furnishings store, which opened Thursday.

“It’s a constant job of reiterating the message so you do get it across to everyone in the market,” Downing said.

While the competition between malls has intensified, so too have tensions between some retailers and shopping centers. New York jeweler Tiffany & Co., which has its lone Orange County store at South Coast Plaza, recently filed a $1-million lawsuit against that center, claiming the mega-mall used an “illegal and unenforceable” noncompetition clause to keep Tiffany from opening a store at Mission Viejo.

Some South Coast and Fashion Island shoppers are hoping the reopening of the Mission Viejo mall will make their lives less stressful. If South County shoppers gravitate toward Mission Viejo, it could become easier to get to “our own malls,” they say. Bonuses could include less traffic and and more seats available at mall restaurants.

“Those people (in Mission Viejo) can stay there,” Jones said with a smile.

What worries some retailers is that shoppers might stay at home this shopping season, navigating Internet highways instead of the 405. Online retailing is expected to hit $36 billion this year, a 145% spike over last year.

Many Orange County mall shoppers said they may buy online this year. But most said that--excluding items such as luggage and watches and computer accessories and books--they prefer to touch before spending. They like to caress a sweater, finger a bedsheet and tinker with gadgets before bringing them home. Some even like to wrap their own presents, a chore that can be avoided by shopping online.

“There’s something about bringing a present home and wrapping it,” said Newport Beach resident Murrieta Lohr, a regular South Coast Plaza shopper.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Three Competitors

Name: South Coast Plaza

Where: Costa Mesa

Size: 2.7 million square feet

Number of stores: 275

Estimated Annual Sales: $955 million

Anchors: Nordstrom, Saks Fifth Avenue, Robinson-May, Macy’s and Sears

Major Restaurants: Maggiano’s Little Italy, Birraporetti’s, The Clubhouse Restaurant, Rainforest Cafe

Orange County exclusives include: Christian Dior, Chanel, Fendi, Gucci, Tiffany & Co.

Owner: C.J. Segerstrom & Sons