SHERMAN OAKS — The Sherman Oaks Fashion Square has been acquired by a British insurance company that plans to hone the mall's upscale image to cash in on the relatively healthy high-end segment of the otherwise anemic retailing market.
Prudential Assurance Co. Ltd. had been in discussions to purchase the shopping center for about a year and completed the acquisition last month for $120 million.
The company, which is not affiliated with the giant American insurer Prudential Insurance, is one of the largest mall owners in Britain, and also has retail properties in the eastern United States.
The mall's former owner, City Freeholds USA, a subsidiary of an Australian firm, had owned Fashion Square for about 10 years, during which it enclosed the former open-air mall and upgraded the tenant mix. A company spokesman said the sale was part of a broader move to divest its U.S. properties.
The acquisition of the Fashion Square marks Prudential Assurance's first foray into the West Coast retail market--and the company has high hopes that it will profit because the center's cachet could help it stand out in the crowded and highly competitive local retailing environment. Fashion Square will be one of only three malls in the Los Angeles area to have a Bloomingdale's when the tony retailer opens there in the fall.
"We're going to try to capitalize on that upscale position," said Steve Plenge, senior vice president of the Yarmouth Group, a pension fund advisory firm that is managing the mall for Prudential.
Plenge said the mall averages sales in excess of $300 per square foot--a relatively healthy figure in today's soft retailing climate. And it is in a unique position, he said, because it fills a void for affluent shoppers who would otherwise have to travel to the West Valley or Glendale.
So, while major changes aren't planned, the mall will undergo a make-over that includes new lighting, paint and landscaping. Yarmouth plans to complete the face-lift by the fall, to coincide with the Bloomingdale's opening.
The old Broadway site is currently being rebuilt with about 25% more space to make room for Bloomingdale's. Also, Fashion Square's Bullock's will soon be transformed into a Macy's. The changes are part of a broader plan by Federated Department Stores to convert all its Bullock's and newly acquired Broadways to Macy's or Bloomingdale's.
Plenge said Yarmouth also plans to divide the 50,000-square-foot space that once held I. Magnin into seven to 12 smaller stores. He said he's talking with several prospective tenants, whom he declined to identify.
The Fashion Square has entitlements to add another 110,000 square feet to the 860,000-square-foot mall.
"But we don't have any plans for that at this time," he said.