The nation’s most severe postwar recession brought lower sales to Orange County’s largest 25 malls.
Taxable sales for the malls fell 7% to $6.6 billion for the 12 months through June, according to this week’s Business Journal list.
A year ago, the malls on our list saw flat sales as the retail downturn started to take root.
Fewer shoppers, discounting, store closures and lingering mall vacancies drove the decline through June.
Twelve of the 25 malls saw lower revenue, according to the malls themselves and sales tax figures from cities. Just three malls saw higher sales.
Figures for 10 malls are Business Journal estimates, nearly all of them lower than what was reported or estimated a year earlier.
The three gainers: No. 15 Metro Pointe at South Coast in Costa Mesa, up 0.3% to $177 million; No. 21 Anaheim Plaza, up 9% to $120 million; and No. 22 Fullerton Town Center, up 10% to $119 million.
South Coast Plaza, the list’s longtime No. 1, was the biggest decliner.
The Costa Mesa shopping center, the county’s largest, was down 15% to $1.1 billion in taxable sales. The $200 million drop made up 40% of the $470 million decline seen among the malls.
Luxury sales had a worse time in 2009 as the economy took a toll on “aspirational” shoppers—middle-income consumers who sometimes used debt to live beyond their means during the boom.
Luxury shopping is expected to recover somewhat in 2010 but at a slower pace than retail overall.
No. 2 Fashion Island, an upscale shopping center in Newport Beach, is estimated at $600 million in sales. A year ago, the Business Journal estimated Fashion Island’s sales at $625 million.
“We are hopeful the economy has turned the corner and the recovery has begun,” said Nina Robinson, vice president of marketing and communications for the retail properties unit of Irvine Company, Fashion Island’s operator.
Irvine Co.’s retail centers—which also include No. 3 The Market Place in Tustin and Irvine, No. 5 Irvine Spectrum Center, No. 12 Irvine Home Center and No. 13 Crossroads/Westpark in Irvine—have seen improving sales since August, according to Robinson.
Other mall operators said they’ve also seen sales pick up in the second half of the year.
“We hit the bottom,” said Karen Finke, general manager of No. 23 Anaheim Hills Festival. “We’re seeing improved sales now.”
Anaheim Hills Festival has 55 stores and restaurants, including Target, Toys “R” Us, T.J. Maxx and Pier 1 Imports. The mall lost a Mervyns but is 97% full with three deals in the works, Finke said.
No. 17 Buena Park Downtown was another big decliner.
The struggling mall’s sales fell 11% to $151 million. Sales don’t reflect the September opening of a John’s Incredible Pizza from Rancho Margarita-based John’s Incredible Pizza Co.
The pizza buffet and family arcade has help boost visitors to the mall, according to Buena Park Downtown owner Devel-opers Diversified Realty Corp. of Ohio.
The District at Tustin Legacy in Tustin debuts on our list at No. 9 with an estimated $225 million in sales. The mall, which opened in 2007, tied with Bella Terra in Huntington Beach, also estimated at $225 million.
Bella Terra, an 800,000-square-foot mall, is set to see a Whole Foods Market open next year in a 32,000-square-foot space that used to be a Circuit City.
Malls that filled empty space were lucky to do so as tight credit and sluggish consumer spending kept retailers from expanding.
“There weren’t a lot of deals being done,” said Finke of Anaheim Hills Festival. “Everyone put their deals on hold.”
Leasing
Leasing picked up somewhat in the second half of the year, according to mall operators.
Indianapolis-based Simon Property Group Inc. ties Irvine Co. with the most malls on our list at five: No. 4 Brea Mall, No. 6 The Shops at Mission Viejo, No. 7 Westminster Mall, No. 19 The Block at Orange and No. 20 Laguna Hills Mall.
Brea Mall saw sales drop 6% to $465 million. The Shops at Mission Viejo fell 6.7% to $308 million.
The Shops recently saw openings of a Microsoft store and a Farrell’s Ice Cream Parlour. Both are expected to draw shoppers to the mall, which is full.
Simon’s other malls saw steeper declines.
The Block at Orange was down 15% to $131 million. Laguna Hills Mall was down 14% to $126 million. Westminster Mall was down 9% to $290 million.
The Block lost a few stores, including Hilo Hattie and Steve & Barry’s, which went out of business.
A Neiman Marcus Last Call Store replaced Ron Jon Surf Shop, which also closed. The Block now has several outlet stores including a Converse Outlet, Off Broadway Shoes, Ann Taylor Factory store and Saks Fifth Avenue Off 5th.
The county’s newest mall, The Shops at Anaheim GardenWalk, didn’t make our list. The mall, which opened amid the brewing downturn in mid-2008, is about half leased with sales of about $500,000.