A Gamble on Shopping Pays Off

Just before a luxury shopping mall opened at Caesars Palace in 1992, the mall’s marketing director, Maureen Crampton, stood behind the closed doors and thought to herself, “I do hope somebody is on the other side.”

She need not have worried.

More than a decade later, the Forum Shops is one of the most successful malls in the country, and high-end shopping has become one of the biggest pastimes in America’s gambling capital.

Gucci, Prada and Dior are now neighbors along a gilded stretch of the Bellagio hotel-casino. Neiman Marcus, Saks Fifth Avenue and Nordstrom anchor the expansive Fashion Show mall elsewhere on the Las Vegas Strip. And boutiques such as Burberry, Mikimoto and Jimmy Choo are inside the Venetian hotel-casino.

“Shopping has become an incredible part of the allure of Las Vegas,” said Hal Rothman, Las Vegas historian and author.

About 36 million tourists visit the city each year. A recent survey by MRC Group Research Institute found that nearly as many visitors said they shopped (63%) as gambled (69%) during their stay. Tourists spent an estimated $2.9 billion shopping last year.

Casino executives discovered that allowing customers to wander away from the gambling floor might be good for business -- as long as they kept spending their money on the property.

At some hotel-casinos, guests can pamper themselves with a $165 facial, dine on a $60 Kobe beef burger and buy a $1,570 Christian Dior handbag without ever going across the street.

“Shopping is one chance for the casinos to recapture some of the money they paid out to the winners,” said Keith Schwer, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “If you have millions of people visiting, walking by, all you have to do is capture a small percentage of them to be profitable.”

The Forum Shops produced average annual sales of $1,471 per square foot in October. That is well above the industry’s national average of $345 in 2003.

The mall was also recently expanded to 685,000 square feet and includes such elegant stores as Harry Winston, Pucci and Celine. The new addition includes a three-story spiral escalator that whisks customers high above the Italian marble flooring.

The luxury Wynn Las Vegas resort opening this year will have the Strip’s first car dealership, where only Maseratis and Ferraris will be sold, as well as shops by Louis Vuitton, Manolo Blahnik, Cartier, Jean Paul Gaultier and Oscar de la Renta.

Alex Bolen, chief executive of Oscar de la Renta, said the decision to open its third American boutique in Las Vegas was based on the large number of visitors -- about 20% -- with household incomes of $80,000 or more.

One reason for the appeal of Las Vegas’ luxury stores is that they welcome casually dressed shoppers who think they might get the bum’s rush if they showed up looking that way on Beverly Hills’ Rodeo Drive.

Leaving Tiffany & Co. at Via Bellagio with gifts in hand, Kyle Sprague said he probably would not have been welcome at the jeweler’s Beverly Hills store wearing a sweatshirt, baggy jeans and sneakers.

“They would have stopped us at the door,” he said.