54.7 F
Laguna Hills
Tuesday, Mar 19, 2024
-Advertisement-

Malls Report Slower Sales Growth; Predict Better Times

Malls Report Slower Sales Growth; Predict Better Times

By JENNIFER BELLANTONIO





Orange County’s largest shopping malls saw sluggish retail sales in 2001 in line with the national trend but are optimistic for a turnaround by the end of this year.

According to this week’s Business Journal list, OC’s top 25 malls saw a 4% rise in taxable sales last year to $5.3 billion,a three percentage point drop from 2000’s sales growth. The list is compiled using city and company figures. Fourteen of the malls posted sales gains, while two had no change and six others reported losses.

Sales numbers were estimated for three centers, including No. 22 Downtown Disney in Anaheim, a newcomer to the list.

The promenade, which opened last January, has 300,000 gross leasable square feet with 40 retail stores and restaurants. Downtown Disney didn’t make the Business Journal’s deadline to disclose its 2001 sales. The Business Journal’s conservative estimate was $60 million.

OC’s retail sales growth of 4% in 2001 slightly beat the national trend. The Department of Commerce said national sales last year were $3.5 trillion, a thin 3% increase vs. 2000.

Industry watchers say it was the weakest retail growth since the last recession about 12 years ago.

But some malls are seeing a turnaround.

“For us it’s definitely on a positive trend,” said Patsy Sanquist, marketing director at No. 5 The Shops at Mission Viejo. “Traffic is up and sales are up for all the individual boutique stores as well as the major anchor tenants.”

Karol Henning Reedy, general manager at No. 3 The Market Place Tustin/Irvine, is also optimistic. She said 2002 sales have been increasing monthly, though slowly.

“We’re positive year to date through May so we’re encouraged by those sales increases,” Reedy said. “We anticipate sales will increase at a greater rate for the rest of 2002.”

The same is being seen on a national level.

The Washington, D.C.-based National Retail Federation in April revised its forecast for 2002 and predicted sales would grow 6% this year, compared to the previously forecasted 3.7%. The trade association’s sales measurement includes general merchandise, apparel, furniture and home furnishings, electronics, appliances, sporting goods, hobby, books and music categories.

“The recovery has begun, and it has come sooner and with more vigor than anticipated,” said National Retail Federation chief economist Rosalind Wells in an April 10 announcement.

Wells attributed the turnaround to “strong consumer spending, an improving job market, robust home sales and mortgage refinancing activity.”

On a local level, Chapman University’s Anderson Center for Economic Research projects Orange County retail sales to grow 3.4% to $30 billion in 2002. Chapman expects the momentum to pick up in 2003, with retail sales rising 5% to $31 billion, according to the study, which was released in June.

Total space available on this year’s list was about 19.9 million square feet, a slight 1% increase vs. a year earlier.

The top five centers on this year’s list held their spots.

No. 1 South Coast Plaza in Costa Mesa saw 2001 sales inch up 1% to $1.1 billion. The mall hasn’t seen any major expansion,its square footage stayed at 2.8 million.

But Cincinnati-based Federated Department Stores Inc. has been working on its flagship Macy’s Southland store at the plaza. The retailer just finished the first phase of a $40 million renovation.

No. 2 Fashion Island in Newport Beach saw 3% sales growth to $535 million. The center opened about 12 stores last year and recently opened a 35,000-square-foot expansion.

And Neiman Marcus is under way with its 33,000-square-foot expansion, which is expected to be complete by 2003.

No. 3 The Market Place Tustin/Irvine, owned by The Irvine Company, which owns four other centers on the list, increased its sales 6% to $468 million.

“We’re averaging a 99% (occupancy) rate in all three of our phases,” the Market Place’s Reedy said. “When those few tenants complete their construction and open we’ll be fully occupied.”

She projects sales growth of 5% to 10% at The Market Place in 2002.

“We see the economy turning around too,” Reedy said. “We’re optimistic.”

Brea Mall came in at No. 4 with $408.5 million in 2001 sales, up 2% from a year earlier.

No. 5 The Shops at Mission Viejo saw sales jump 8% to $311.9 million. Sanquist said the center opened several stores last year, including American Eagle Outfitters and Old Navy.

No. 6 Westminster Mall, which bumped MainPlace/Santa Ana Mall to No. 7, saw sales increase 4% in 2001 to $286.3 million. Its square footage fell 5% to 1.2 million because the center is undergoing a massive makeover.

Federated is spending about $30 million to build a 175,000-square-foot Macy’s store at the mall, which is set to become the fourth anchor there. The store is expected to open in early November.

No. 8 Mall of Orange saw sales jump 6% in 2001 to $181 million.

“We had a weird first quarter (in 2002),it was soft,” said center manager Karie Najemnik. “But we’re back up. Our department stores are running strong increases right now. Year to date we’re up and sales are up on a comp basis.”

The center is projecting a “consistent year” but “no wide sweeping growth” for 2002, Najemnik said.

The Mall of Orange, which was purchased by San Francisco-based RB Orange LLP in April, is in the planning stages for a major redevelopment plan, which includes increasing the center by 35,000 square feet, she said.

There were three centers on this year’s list that showed doubled digit sales gains.

Metro Pointe at South Coast in Costa Mesa, which went to No. 10 from No. 11, reported a 23% jump in sales to $169.1 million.

No. 12 Brea Union Plaza, which jumped from No. 15 last year, showed the biggest growth on this year’s list. The center posted a 55% gain in taxable sales to $161 million, largely because a Home Base was replaced by a Home Depot.

No. 16 The Irvine Spectrum Pavilion reported a 21% gain in sales to $115 million largely because of the opening of a Great Indoors and sales increases at Treasures Furniture. The center nearly doubled its stores to 12 in 2001.

There were six malls that posted losses in 2001. No. 21 Westminster Center reported a 7% loss to $62.2 million. No. 24 Pavilion’s Place was down 3% to $57.7 million. No. 23 Huntington Beach Mall, which is undergoing a big renovation, was down 26% to $59.2 million.

No. 17 Irvine Spectrum Center posted a 3% sales loss to $98 million. The center attributed the decrease to construction,it’s undergoing an expansion,and lighter foot traffic at its Edwards theater, which is converting its IMAX screen to a standard size.

No. 25 Buena Park Mall posted $53 million in taxable sales, down 32%.

Manager Kenneth Kraus attributed the decrease to the closure of JC Penney. That space is being redeveloped for a 90,000-square-foot Krikorian Premier theater complex and 30,000 square feet of retail space. The center is expected to open in spring 2003.

Kraus said Wal-Mart has taken over the old Fedco building for a 175,000-square-foot store that’s slated for spring or summer 2003.

Fullerton Metro Center, down 19% in sales to $41.8 million, was bumped from the No. 25 slot and dropped from the list because its sales were lower than the $53 million cutoff.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-