Local retailers will see continued growth in 2005, though this year will be hard to beat.
Total retail sales in Orange County are seen growing 4.6% to $35.9 billion, according to Chapman University. That’s a solid gain, though slower than this year’s expected 6.8% jump in sales.
“Unless there’s a huge outside external force that hits the economy, the expansion should continue,” said Chapman President James Doti at the school’s annual forecast in December.
While OC’s economy and jobs picture is seen gaining along with the national economy, there are some negative forces that could take a bite of retail sales: higher oil prices and interest rates, a drop in housing construction and home refinancing, plus a declining U.S. dollar.
“Retail in general is going to be hurt,” said Tony Cherbak, an auditor specializing in retail for Deloitte & Touche LLP in Costa Mesa.
But thanks to booming sales of luxury products, OC retail is more insulated than the national scene, Cherbak said. Higher energy prices might hurt shoppers with lower incomes, but they won’t affect luxury buyers. Tax cuts have spurred luxury sales in the past few years.
Rosalind Wells, chief economist for the Washington, D.C.-based National Retail Federation sees the national picture being “somewhat softer than this year.”
On the mall front, newly revamped Bella Terra in Huntington Beach is 85% leased, according to Milt Swimmer, partner for developer J.H. Snyder Co.
Here’s a look at some changes expected next year at other OC malls:
South Coast Plaza is set to debut Oliver Peoples and Penhaligon in January, Barneys in March and Quiksilver in May.
The Irvine Spectrum Center will see a Nordstrom open in the fall along with another parking garage.
Newcomers at Fashion Island include Toy Boat and Avitatt Furniture.
The Market Place in Tustin will get an Easy Life Furniture store while La-Z-Boy Furniture remodels.
Saks is leaving The Shops at Mission Viejo. No replacement has been named.
Laguna Hills Mall will add a Sweet Factory, Marble Slab Creamery and Perfume Shoppe.
PERSON to watch: SETH JOHNSON
Pacific Sunwear of California Inc.’s incoming chief executive Seth Johnson takes over at a challenging time for the booming surfwear retailer.
Sales for the teen clothing chain are up 19% through the first three quarters of the year, but comparisons are getting harder. Same-store sales rose just 2.7% in November after double-digit gains for most of the past few years.
Teen retail competitors have taken a hit of late, with Hot Topic Inc. cutting its fourth quarter earnings outlook in November.
Johnson is charged with keeping PacSun chugging along. The chief operating officer takes over the company in April. The company under outgoing chief Greg Weaver has grown to 989 stores.
PacSun expects to grow to 1,400 stores by 2007. It also has plans to launch a new store concept in the next couple of years.
Johnson has a retail pedigree. He is former chief operating officer for Abercrombie & Fitch Co., which operates its own growing teen surf chain, Hollister.
Weaver isn’t falling off the PacSun map. He’ll spend about two days in the office next year, working on the company’s expansion as executive chairman.
,Sherri Cruz
MALLS to watch: VILLAGE AT ORANGE, BUENA PARK DOWNTOWN
Fresh off remodels, two of Orange County’s oldest malls changed hands in the fall. The new owners will be looking to cut vacancy next year.
The Village at Orange was bought by Irvine’s Passco Real Estate Enterprises Inc. and 30 others for $90 million in October. Formerly known as the Mall of Orange, the 822,000-square-foot mall is “more than” 80% leased, according to general manager Deena Henry.
Landscaping, fountains and new tile on the walkways were added in a $57 million makeover. Wal-Mart, Sears and J.C. Penney anchor the mall.
New tenants are in the works. An 18,000-square-foot Old Navy is set to open. Also on tap is an Active Ride board sports shop. The Village hopes to add more stores to attract younger shoppers. Chicago-based Jones Lang LaSalle Inc. will continue to manage the mall.
Meanwhile, Buena Park Downtown traded hands
in November. Chicago’s Pritzker family sold the 1.1 million-square-foot complex to Diversified Realty and Coventry Real Estate Advisors for about $91 million.
Management will be handled by Diversified Realty (Los Angeles-based The Festival Cos. was the former manager). The mall is divided into three sections: Buena Park Mall, a 782,000-square-foot shopping center, is 74% leased; Buena Park Place, a 208,000-square-foot mall, is 94% leased; and Park Central Entertainment Center, a 137,000-square-foot area that includes a movie theater, is 81% occupied.
,Sherri Cruz
