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Galleria Hopes Make-Over Will Help Lift Sales : Retail: Once the Valley's quintessential mall, just 92 shops remain, down from 122 last year. Fashion Square competition hurts, analysts say.

July 06, 1993|JONATHAN GAW | TIMES STAFF WRITER

Lunch-hour sunbeams splash through the skylight above the half-occupied Sherman Oaks Galleria food court while a handful of people wait for Italian takeout and a bored-looking sushi eatery attendant leans on his chin.

"This is the closest thing to my office and the food's good, so I come back," said Aude Barajas, picking at her salad.

But the freshly renovated eating area contrasts with the darkened store fronts that lurk around the corner, polluting the commercial community around the entrance to Robinsons-May.

One of the Robinsons-Mays, anyway.

The Galleria has two as anchors and no other department stores, making it unique among shopping centers and putting it in a situation that many analysts deem unworkable at a mall that faced its share of challenges even before the announced marriage last October of the department store chains, both of which were owned by St. Louis-based May Department Stores.

"They have really had problems getting occupancy long before they had the issue of the two tenants being the same one," said Michael Lushing, a vice president and real estate analyst for commercial real estate brokerage CB Commercial in Sherman Oaks.

While Galleria management said the occupancy rate has risen over the past year to 87%, an informal survey of the mall last week showed only 92 shops in the mall, down 19% from 113 in 1989, the year with the highest available figure of retail units. A 1992 directory of shopping centers published by the National Research Bureau, a Chicago-based marketing research company, listed the mall with 122 stores.

The directory also showed retail sales for the Galleria at $200 per square foot, compared to $350 per square foot at the nearby Sherman Oaks Fashion Square. However, the survey was taken before the 13-year-old Galleria began renovations last year and shortly after Fashion Square had undergone its own make-over.

The threat posed by Fashion Square's renovation led the Galleria to replace dark gray and burgundy carpets with cream-colored marble flooring accented in green and terra cotta, install seasonal flower boxes, expand its food court and remove four seldom-used flights of stairs. It was the first make-over for the Galleria and was sorely needed for the mall to remain competitive in a harsh retail environment that requires outlets to update their looks frequently, analysts said.

The mall aims at the mid-range customer and includes outlets such as Judy's, Victoria's Secret, Sam Goody Music & Video, Stride Rite Bootery and the Gap.

The Galleria had gained fame as the quintessential San Fernando Valley shopping experience in 1982, two years after it opened, with the song "Valley Girl" by Moon Unit Zappa, which made phrases like "grody to the max" and "gag me with a spoon" part of teen-speak nationwide, and a subsequent movie by the same name.

The exposure brought a 30% increase in foot traffic to the Galleria, mall officials said in 1983. But Lushing said the mall has never reached 100% occupancy and it never recovered from its reputation as a cumbersome shopping center.

The Galleria is jointly owned by Prudential Insurance Co. of America and a Japanese firm whom Prudential officials declined to identify. General Growth Management Inc., a subsidiary of Minneapolis-based General Growth Centers Companies, Inc. which owns and operates several malls across the country, manages the mall.

While the mall's location at the intersection of the Ventura and San Diego freeways is ideal, analysts said, a poorly designed parking structure and difficult access to the mall turns shoppers away in droves.

Customers say the parking lot funnels traffic through just a few exits, making for long lines as attendants collect parking stubs.

"It's very annoying and causes traffic problems and from a consumer's standpoint, it's less than ideal," said David Rosa, who lives and works nearby and often lunches at the mall.

Mall officials said they have "committed a lot of money" to make the underground garage work, and that they hope customers will get more comfortable with the arrangement with time.

"We have just done a whole lot of things to make it more user-friendly," said general manager Carrol Beals, including new signs, lighting and graphics.

Competition from the redesigned Fashion Square about 1 1/2 miles away has also hurt, analysts said. There, the owners spent $35 million to transform an aged open-air promenade to a two-story enclosed mall with 150 largely upscale retailers, including Bullocks, I. Magnin and Broadway.

The resurgence of Fashion Square, which completed its renovation in late 1990, and the establishment of numerous stand-alone retail outlets along Ventura Boulevard made the Galleria's redesign necessary.

"The remodel that they've done is nice," said one retail analyst who declined to be identified. "But the question comes up, is it too little, too late?"

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