In 2001, Walt Disney Co. opened a billion-dollar Anaheim expansion that included a second theme park, a third hotel and a mall.
Nearly a decade later, the company is dropping another billion dollars to fix parts of the expansion, mainly the disappointing Disney California Adventure Park.
Another piece of the 2001 expansion, the Downtown Disney District mall, seems to be doing just fine.
Nestled between California Adventure and the original Disneyland Park, Downtown Disney has a waiting list of tenants wanting to get in.
The mall sees a steady flow of shoppers—a mix of tourists, locals and park employees.
While Disney is spending big to make over California Adventure and the nearby Disneyland Hotel, Downtown Disney is making money.
The 311,000-square-foot mall has a Business Journal estimated $175 million in yearly sales, or about $560 per square foot.
Disney doesn’t disclose sales for the mall.
The estimate would put Downtown Disney ahead of South Coast Plaza’s yearly sales of $394 per square foot and Fashion Island’s $461 per square foot.
Downtown Disney’s location, pricey niche stores and restaurants are believed to generate more per square foot than bigger, broader shopping centers.
The location of the mall provides a regular stream of shoppers as tourists pass through on their way to and from the theme parks and hotels.
Downtown Disney also pulls in a lot of locals—about 40% of shoppers come from within a 15-mile radius, including some of Disney’s 20,000 local workers.
The mall’s built-in market comes at a price for retailers.
Rents are higher at Downtown Disney than other malls because retailers are paying to be part of greater Disneyland.
“When a tenant signs on to Downtown Disney, they understand that they’re joining the Disney brand,” said Janet Knox, general manager of Downtown Disney. “That’s a big obligation.”
Downtown Disney tenants also must conform to Disney standards, including guidelines regarding uniforms and makeup.
Stores
Stores and restaurants include Build-A-Bear Workshop, Quiksilver Boardriders Club Store, Compass Books, Tortilla Jo’s, Rainforest Cafe and House of Blues.
The mall has something of a split personality with family shops appealing to park-goers during the day and restaurants and nightlife appealing to locals after dark.
The mall is home to six Disney-owned stores, including a World of Disney souvenir shop, Marceline’s Confectionery and Disney’s Pin Traders, which sells Disney character pins.
Three years ago, Disney opened Disney Vault 28, which sells edgier, trendy Disney clothing and accessories.
The Vault, named after Mickey Mouse’s film debut in 1928, also sells other brands, including Dooney & Bourke, Betsey Johnson and Harajuku Lovers.
As a rule of thumb, Disney looks for tenants that can’t be found in every mall to give Downtown Disney a different feel.
“We’re not opposed to national brands,” Knox said. “But we would like it if they have something a little unique. We try to make sure they’re the flagship version.”
Downtown Disney often recruits tenants that offer some kind of hands-on or interactive experience. If customers can make something, all the better.
“At the end of the trip you have your memories, but that piece of merchandise is your tangible experience,” Knox said. “That is what you’re going to talk about.”
Examples include Studio Disney 365, where people can get a makeover and pretend to be a star on a Disney stage. At Build-A-Bear, kids can stuff and sew their own teddy bears. And Ridemakerz, a recent addition, lets kids put together a remote-control model car.
The mall’s main appeal is to families, Knox said.
That’s what appealed to Ridemakerz LLC, which is based in Rancho Santa Margarita and is moving to Irvine next month.
“The difference between the malls and Disney for us is demographics,” said Larry Andreini, chief executive of Ridemakerz, which opened its store in Downtown Disney this month.
Ridemakerz used to split a space with Irvine-based Sanuk USA, a maker of flip-flops and other shoes, which is looking for a permanent home at Downtown Disney as soon as one opens up.
Ridemakerz also has a temporary 18,000-square-foot space at Walt Disney World in Orlando.
At Disney, “you have a whole family looking to be entertained,” Andreini said.
Nightlife
At night, the mall veers more toward grown-up entertainment with restaurants, bars, bands at House of Blues and performers in open areas outside stores and restaurants.
“In the evening this place transforms,” Knox said.
The mall is lit up and musicians play to crowds.
Violinist Drew Tretick, who credits his Disney performances for launching his career, draws crowds of people to watch him perform in the middle of the walkway, which can be seen from the neighboring Disney’s Grand Californian Hotel and Spa.
“People book rooms at the Grand to be able to see him,” Knox said. “He has such a great following.”
House of Blues, AMC Theater and ESPN Zone also draw in adults.
Downtown Disney’s ESPN Zone escaped closure as Burbank-based Walt Disney Co. closed most of its ESPN Zone stores this month.
The Anaheim ESPN Zone is profitable.
Nearly half of the mall is made up of restaurants, such as the Rainforest Cafe, Catal Restaurant and Uva Bar, Ralph Brennan’s Jazz Kitchen and Naples Ristorante e Pizzeria.
The mall’s only nearby competition is struggling.
The Shops at GardenWalk in Anaheim, a 440,000-square-foot outdoor mall that opened in 2008, has struggled to lure locals. The mall now is up for sale.
GardenWalk also languished because it opened halfway-full amid the downturn.
During the recession, Downtown Disney shoppers stayed steady, according to Knox.
“They spent less on merchandise and food,” she said. “(But) the nice thing is they continued to come.”
