The announcement earlier this week that Sears will be closing 500 stores nationwide is just another example of the struggle shopping malls are facing as anchor stores vanish.
Matt Bear, vice president of CBRE, a Las Vegas-based commercial real estate group, said although the national retail market has been changing for quite some time, people are just starting to notice.
“It’s just become evident recently, but it was always happening. It’s just taken a longer time to see it,” he said. “Consumer tastes are always changing and stores like Sears haven’t done a good job keeping up because they’ve been forcing customers into a 50-year-old business plan that doesn’t work anymore.”
Bear said shopping malls must adjust with the changing times if they want to survive.
“They have to go back and consider what the right merchandise mix is, which means they may have to terminate leases or incorporate entertainment concepts to fill a void,” he said. “It’s about right sizing these malls, which can be painful, but none of this is easy.”
Although Las Vegas retail seems to be booming, Bear said the city still feels the effect of national market trends.
“The Strip is an anomaly and we’ll always be different in terms of that no matter what, but suburban Vegas has the same challenges that everyone else does,” he said. “The recession taught us that good retail has gone down in value but some projects have gotten stronger with regards to their amount and variety of tenants.”
The Linq, which opened in the corridor between the Flamingo and The Quad in February, boasts more than 250,000 square feet of restaurants, bars, nightclubs, entertainment venues and retail space.
The Linq offers an open-air venue that people desire, said Rick Caruso, founder and CEO of Caruso Affiliated, a Los Angeles-based company that develops and manages the property.
“People still want social hubs, places that create great ambience and enable couples, friends and families to connect over a meal, entertainment or shopping,” he said. “Today’s shoppers want human-scale, livable settings, and a great experience so retailers, developers and cities must embrace the soul of retail’s past to ensure a future. While mechanics and technology change over time, the human need driving retail does not.”
Caruso said the popularity of online shopping won’t drive people away from stores.
“E-commerce is obviously an aspect of shopping that is here to stay, however, we shouldn’t see that as a threat to the traditional approach of brick-and-mortar shopping,” he said. “Instead, we should embrace this change and use it to engage with the customer further to ultimately enhance an in-person experience. I believe that stores will remain as destinations to highlight and augment the brand experience.”
Fashion Show mall senior general manager Jim Heilmann said the Strip shopping mall attracts customers with personal shopping services, hotel delivery, convenient returns and valet parking.
“Fashion Show also provides that one-of-a-kind, only-in-Vegas experience with its famous state-of-the-art professional fashion shows that rise out of the ground on a retractable runway,” he said. “Customers have an opportunity to see the latest fashions showcased on the runway before they make their purchases.”
Heilmann added that nearly six months into the year, Fashion Show has had 45 store openings.
“We’ve been able to open top-notch brands that are firsts in Nevada, including the Lego Store, Dynamite, Halston Heritage, Vince Camuto, Topshop/Topman, Disney Store and more,” he said. “This is proof positive that the center is performing and retail is on an uptick.”
At Treasure Island, a three-story building is being erected in the resort’s lagoon area where the infamous pirate ship sits. The nearly 50,000-square-foot addition, at the southwest corner of Las Vegas Boulevard South and Spring Mountain Road, is expected to open in September.
Michelle Knoll, senior vice president of communications, said CVS Pharmacy will occupy the building’s ground floor and that the remaining two floors have yet to be leased.
“This corner is a highly visible retail environment so it was an obvious choice,” she said. “The time seemed right as the economy has improved.”
Meanwhile, in Henderson, sales and traffic have increased at Galleria at Sunset in the last year, Marketing Director Heather Valera said.
“Our mix of five department stores, Dillard’s, Macy’s, J.C. Penney’s, Kohl’s and Dick’s Sporting Goods, continues to be a strong draw for the center and one of the top driving forces that shoppers select Galleria at Sunset over our competition,” she said.
During the recession, Valera said, Galleria struggled with retailers filing for bankruptcy and vacating the shopping center abruptly, leaving little time to replace them. She said community partnerships with Henderson libraries and the Henderson Police Department helped to fill the vacancies.
The mall’s focus, Valera said, is using the latest technology to reach out to customers.
“We engage our shoppers through our website with compelling content and interactive elements, a mobile app and text program, and interact with them through social media,” she said. “The center has embraced our shoppers’ need for more electronic communication.”
Retail developments have been underway at Boulevard Mall since Henderson-based Sansone Cos. acquired the nearly 50-year-old mall at 3528 S. Maryland Parkway in December.
“Boulevard Mall was the center of town and is a prominent iconic property,” President Ronald Sansone said. “We see the value and so does the surrounding community.”
Sansone said the mall has an 80 percent occupancy rate and 144 stores.
“The neighborhood is transitioning and new households are forming with young people embracing the older midmodern homes in the area, starting their families and the cycle starts over,” he said. “As we continue our improvements to the site, we’ll be adding new and exciting tenants and restaurants.”
Bear said he’s confident the future of retail is bright.
“People will still want to shop and you’ll still have people making impulse buys,” he said. “However, we all want choices and the retailers who can embrace those choices will have the best chance of getting the customers.
“If you don’t figure out a way to cater to your demographic, it’s only a matter of time before you go out of business.”
Contact reporter Ann Friedman at firstname.lastname@example.org or 702-383-0391. Follow @AnnFriedmanRJ on Twitter.