With Christmas one month away, the battle among the region's big retail malls to lure holiday shoppers is now in full force.
The Christmas season often accounts for 30% or more of a retailer's sales for the whole year and in this season, the competition is keener than usual. That's because of the recession's overall damper on consumer spending and because there are two new gleaming rivals in the region: Media City Center in Burbank and Valencia Town Center in Santa Clarita.
The battle's high stakes are evident at all of the malls, the largest of which is Glendale Galleria, which does roughly $400 million in annual sales, according to the most recent state sales-tax data available.
Each mall has had stores displaying and selling Christmas ornaments, lights and other decorations since shortly after Halloween, and Northridge Fashion Center began decorating its aisles last week. The traditional day-after-Thanksgiving start for Christmas sales is now a thing of the past.
But for three of the biggest malls, this Christmas season arrives just as each is grappling with its own set of unique problems. One is losing a major tenant, another is struggling to fill empty storefronts and one is losing customers to a new competitor.
Here, then, are the stories of those malls and how they're responding to these concerns as the holiday rush begins.
After watching its sales growth turn lackluster in the late 1980s, the Promenade's owners began remodeling the upscale mall in Woodland Hills' Warner Center in 1991.
Although the exact cost was not disclosed, the multimillion-dollar face lift was seen by some analysts as crucial for the 19-year-old mall to compete against nearby Topanga Plaza and other centers.
But the Promenade's owner, a New York developer named the O'Connor Group, barely began reaping the benefits of the renovation before getting hit with more bad news in October: One of its anchor tenants, Robinson's, is being closed by the store's parent, May Department Stores Co.
May Department Stores is shuttering seven Robinson's stores in Southern California by Jan. 31 as part of its plan to merge its May Co. and Robinson's divisions. (Five May Co. stores in Southern California are also being closed.) The move now leaves a big gap in the Promenade, whose other anchors are Saks Fifth Avenue and I. Magnin.
The obvious question is: Can the Promenade land another tenant that not only will take over Robinson's rent payments, but also fit into the mall's high-brow image?
Paul Kastner, O'Connor's senior vice president for marketing, said the mall can find a new upper-crust tenant, even in this rough retail environment. "These are difficult times, but that doesn't diminish the quality of a mall like the Promenade," he said. "There is great interest in the Promenade."
That "interest" and a signed lease are two different matters, however. For as long as the Robinson's store sits vacant, the Promenade could be losing more ground to its nearby rival, Topanga Plaza, which last week had its own "grand reopening" after an extensive renovation.
Indeed, in an example of the take-no-prisoners competition, the Broadway store at Topanga Plaza is sending letters to potential customers that, after noting that the closure of the Promenade's Robinson's "affects our entire community," offer gift certificates and other special discounts for shopping at the Broadway.
The Promenade "has always been a stepchild to Topanga Plaza because of the strength of the department stores at Topanga Plaza," such as Nordstrom's, said Randy Brant, vice president of Melvin, Simon & Associates, a Los Angeles shopping-center developer. Topanga Plaza's annual sales exceed $230 million, while the Promenade's are near the $100-million mark.
As for replacing Robinson's, Kastner noted that "these type of negotiations take a while. I don't think an announcement will be made in the next month or two, but certainly we hope to have this resolved as quickly as possible."
And in a possible omen of more bad news, I. Magnin's parent, R. H. Macy & Co., is in the middle of a bankruptcy reorganization, and its co-chairman, Myron E. Ullman III, said earlier this month that Macy might close some of its 19 I. Magnin stores, although he was not more specific. Kastner said he's received "no indication" from Macy that the Promenade's I. Magnin is in jeopardy.
Macy also owns the Bullock's chain, but Ullman said the company was committed to Bullock's and is not contemplating any closures of those stores.
Northridge Fashion Center
Lloyd Miller, general manager of the Northridge mall, says he doesn't yet have sales data to show how many customers he's losing to the $150-million Valencia Town Center, which opened in September. Before the debut of that mall, Northridge provided Santa Clarita's residents with their closest big mall.
"We don't have much in the way of quantitative figures yet" to compare this year with last, he said. "But we do know that our customer traffic is the same as before."