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Monday, Dec 5, 2022
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Top Shopping Centers Plot Expansion, New Additions

South Coast Plaza’s Debra Gunn Downing is upbeat in her outlook for the holidays as the Costa Mesa luxury shopping center leads the county’s retail landscape out of what’s been a challenging period.  

“This time is a season of renewal for many reasons at South Coast Plaza. Despite the pandemic, we’ve opened more than 10 new and redesigned boutiques since last year, including a more expansive Tiffany & Co. and its Blue Box Café, and exclusives such as Canada Goose and Audemars Piguet. Before the close of the year, Buccellati, another exclusive, and Laderach, Pressed and Laurent Vrignaud’s Moulin will debut,” Downing said.

The marketing executive went on to point out Louis Vuitton, Fendi and Dior all have dual locations, including pop-ups, at South Coast Plaza, and more on that front is expected.  

“This underscores the desirability of luxury retail space at the center,” she said.

“Looking toward 2022, we will welcome a bigger Hermès in a new location and celebrate our 55th year, among many exciting developments.”

That OC’s largest shopping center is in an upbeat mood offers some holiday cheer in what’s been a rocky stretch for retail, with indoor capacity limitations, additional investment in air filtration systems and other health and safety measures, changing mask requirements and the Delta variant.

South Coast Plaza once again topped this year’s annual Business Journal list of the largest shopping centers here with $1.6 billion in taxable sales for the 12 months through June 30.

Driving Sales

Orange County shopping centers are coming off a mixed period of time for sales.

The 26 largest centers here had taxable sales for the year ended June 30 of $7.1 billion, up 6.5% from a year earlier, according to this week’s Business Journal list.

The centers either self-reported sales data, or the figures were obtained from their respective cities.

Seventeen of the 26 reported sales to the Business Journal, with the remaining entries estimates. Six reported declines in taxable sales, while nine saw increases.

South Coast Plaza maintains a lead that’s nearly three times more than its closest competitor, Fashion Island in Newport Beach.

Both have continued to add new retail tenants to keep their mix differentiated from the rest of the pack.

Outside of the brands Downing mentioned, Bloomingdale’s at South Coast saw a major renovation to the store and the opening of the Collage food hall, which includes the first U.S. location of Singaporean soup dumpling concept Paradise Dynasty.

Meanwhile, Fashion Island in September announced 10 new tenants at its center, including the first West Coast locations for Rhone and Shinobi Menswear and the first Orange County doors for Alo Yoga and Vuori.

Last week, Fashion Island said that it would be building a new, 80,000-square-foot store for home furnishings retailer RH, previously known as Restoration Hardware.

The four-story store on the ocean-facing side of the shopping center will open in mid-2024.

Optimism 

Many shopping centers are projecting record growth in holiday retail sales this year.

The Washington, D.C.-based retail trade association National Retail Federation said late last month holiday sales in November and December are expected to total $843.4 billion to $859 billion, up in the range of 8.5% to 10.5% from the same period last year and a record.

The estimate does not include sales from automotive, restaurants and gas stations.

“There is considerable momentum heading into the holiday shopping season,” the group’s CEO and President Matthew Shay said in a statement.

He noted rising incomes and retailers’ work to get inventory to their stores.

Sales from e-commerce and other channels outside of brick-and-mortar stores alone are projected to total $218.3 billion to $226.2 billion, up in the range of 11% to 15% from a year ago.

At the same time, retailers are grappling with global supply chain issues that partially stem from the pandemic that’s now being seen in shortages of components on everything from chips for cars to to-go containers for restaurants. That, coupled with the slowdown at the ports, has left a glut of inventory sitting on cargo ships and concerns over inflation.

“If retailers can keep merchandise on the shelves and merchandise arrives before Christmas, it could be a stellar holiday sales season,” NRF’s Chief Economist Jack Kleinhenz said.

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