Orange County shopping centers are hoping to get at least one more strong buying season under their belts.
In a bid to lure shoppers, center operators are spending thousands of dollars on expensive Christmas trees, lavish decorations and in-store Santas. At Fashion Island, officials have erected a 115-foot tree, while South Coast Plaza went as far as to create a pressroom offering everything from sandwiches and drinks to massages and manicures for journalists on the day after Thanksgiving.
Many local shopping centers have undergone big expansions in the past couple of years and are looking for a payoff from holiday shoppers.
“We’ve opened a lot of new stores all over and we have a lot of new merchants,” said Rick Evans, president of the retail division of The Irvine Company, which operates about three regional and 27 neighborhood centers including Fashion Island, The Market Place Tustin/Irvine and Irvine Spectrum Center. “While we may have a soft season nationally, we expect to have some respectable numbers because of the stores we have added.”
So will this be the last big shopping spree in what has been a string of them during the economic boom?
Evans said his division’s overall sales are expected to be up roughly 8.5% this year, despite flat home furnishings and movie theater revenue. With signs of economic slowing nationally, a bearish stock market and weaker financial results at big retailers such as Target Corp., Evans said he is guardedly optimistic:
“Overall, we are significantly ahead of last year, but we don’t think we are going to hold on to that and don’t think anybody else will,” he said. “There’s no telling what will happen after Thanksgiving. None of our retailers have bought short. They are all planning for a great season.”
South Coast Plaza in Costa Mesa, with annual sales of $990 million, is expecting roughly 5% gain this year, according to Debra Gunn Downing, executive director of marketing. The center’s projected sales growth comes after a $120 million makeover including a bridge linking the main center to the former Crystal Court section of the mall.
As part of the renovation, South Coast Plaza has added 40 stores in the past year, including a 200,000-square-foot Macy’s Home, plus a Pottery Barn, Henry Cotton’s and the expanded Williams-Sonoma Grande Cuisine.
The holiday season accounts for more than a quarter of annual sales for malls in OC and across the country, according to the International Council of Shopping Centers, a New York-based industry group.
A study by Deloitte & Touche projects that consumers nationally are on track to spend roughly the same as they did last year, about $836 per capita on holiday gifts compared with $849 a year ago. Retailers surveyed nationally said they expect a 4.5% increase in holiday shopping over last year, according to the report.
In OC, the average shopper is projected to spend an estimated $1,304 this year, according to Tony Cherbak, a retail analyst with Deloitte & Touche’s Costa Mesa office. This is the first year that Deloitte & Touche surveyed local consumers, so a year-ago spending figure for OC consumers isn’t available. But among those surveyed in OC, 83% said they plan to spend the same or more this year.
The docks at the Port of Long Beach have been busy in the past few months as area retailers stock up on goods from Asia and elsewhere. Port officials reported a 9.2% increase in containers handled in October to 432,934, just behind August’s record 437,741 handled.
Karol Henning Reedy, general manager of The Market Place Tustin/Irvine, said sales are up 18% year-to-date and are expected to remain as strong through the holiday season. The center is benefiting from additions in its nearly completed third phase, she said, including a new Target and Lowe’s Home Improvement. The third phase, which brings the center up to 1.6 million square feet, is about 85% leased and 60% occupied, she said.
“We are expecting another strong holiday season,” she said.
Since losing its AMC theaters a few months ago, MainPlace/Santa Ana last week re-opened the six-screen theater complex under independent operator Todd Blood. The center, whose sales are up 6% year-to-date according to senior marketing manager Judy Bijlani, recently added several specialty stores including J.Jill-The Store, TOMKID and Murata Pearl.
“We are looking forward to a good Christmas,” Bijlani said.
The Shops at Mission Viejo is hoping to get something out of the holiday season to show for its $165 million in renovations over the past two years. The mall’s sales are up 203% to $118.7 million for the first two quarters this year, according to data provider by Josephine Julian, treasury manager, city of Mission Viejo. The center recently opened its dining veranda this fall with restaurants such as P.F. Chang’s.
Other OC centers such as Buena Park Mall also have completed renovations and added new stores this year. In Buena Park’s case, new additions include Burlington Coat Factory, Bed, Bath and Beyond and Old Navy. Buena Park this month announced plans to create a 150,000-square-foot entertainment complex featuring specialty stores, restaurants and an 18-screen Krikorian Premiere Theatre. The new section is expected to break ground in the spring and open by summer 2002.
Westminster Mall has several new stores and eateries including Old Navy, Anne Taylor Loft, Wizards of the Coast and Kato’s BBQ Grill.
Even non-traditional outdoor centers, which are heavy on entertainment such as movies and restaurants, are expecting to keep up the momentum for the holiday shopping season. Although Irvine Spectrum Center and the Block at Orange typically attract millions of yearly visitors, their overall sales are not as strong as conventional centers that focus on traditional retail tenants.
The Block at Orange, which launched its holiday Winterfest promotion last weekend, expects double-digit sales increases this year, said Christine Carpenter, senior marketing director for the Block at Orange and Ontario Mills. Sales per square foot have reached $400, she added.
“The center has been open two years and people know what stores we have,” she said.
This year’s Winterfest will feature bands, Victorian carolers, crafts for kids and Santa Claus supported by a radio and print advertising campaign that launched last week. n
