Tuesday, July 27, 2004

The crowning jewel of SouthPark

It's a great day to be a SouthPark fan.  Yesterday, Neiman Marcus officially announced it will open a new department store in Charlotte at my favorite mall as part of its expansion. 

If you've been reading here for any length of time, you'll know that I love all forms of shopping, especially really nice shopping like SouthPark offers.  Having a NM closer allows me to check out what's fashionable within a day's drive.  It joins an impressive list of tenants at SouthPark, including Burberry, St. John, Sur La Table, Nordstrom, and Louis Vuitton.  On top of all the exclusive stores, SouthPark has the flagship Belk department store, and the largest Dillard's and Hecht's stores in the region.  It's a fashionista's wet dream.  And it's in North Carolina, smack in the middle of NASCAR country!

This announcement has a dark side, hard as that may be to believe.  There's a good chance that Saks Fifth Avenue, another fine specialty department store with plans for Charlotte (namely, at one point, the exact spot where NM is locating) won't be coming.  Saks is scheduled to be a part of the Village at Seven Eagles, an upscale development not too far from SouthPark that has had all sorts of financial problems during its construction.  Rumor is that it may not be built at all, leaving saks homeless with almost no suitable sites left in the Queen City.

Anyway, the article gives the facts and figures, read below...

Neiman Marcus coming to SouthPark
AMY BALDWIN, charlotte.com, July 27, 2004

Hold on to your Prada handbag. Neiman Marcus is coming to Charlotte.

The Dallas-based department store chain, known to fans as the creme de la creme of retail, will open a store at SouthPark in fall 2006.

The store will be Neiman Marcus' 39th property and the mall's sixth anchor. The announcement, from mall manager and owner Simon Property Group, confirmed year-old speculation that Neiman Marcus was headed to the Queen City.

Longtime Charlotte developer Henry Faison, whose company helped spearhead SouthPark's expansion, said, "This is another large step in creating the finest shopping experience in the Carolinas. Charlotte is a world-class city and deserves world-class shopping."

Charlotte real estate analyst Frank Warren, president of Warren & Associates, said the arrival of Neiman Marcus speaks to the region's shifting demographics. With Charlotte's two big banks pulling in affluent employees from the Northeast, he said, retailers are responding with upscale stores.

Shoppers familiar with Neiman Marcus might envision a store much larger than the one planned for Charlotte. At 80,000 square feet, this Neiman Marcus will be the chain's second smallest, ahead of Palm Beach's 53,000-square- foot store, according to the company's corporate Web site.

By comparison, Atlanta's Neiman Marcus, the closest to Charlotte, is nearly twice as large at 154,000 square feet.

Neiman Marcus did not return a phone call seeking comment.

City officials and retail analysts said the addition confirms Charlotte as an undisputed shopping hub. Retailers and shoppers expressed delight.

"It's very much needed," said Laura Snyder, who was shopping Monday at Phillips Place. "We'll have access to more designers, a greater variety of styles."

The excitement over a store that sells $1,000 suits and $150 neckties underscores a point noted by economists: Despite some soft spots in the U.S. economy, high-end retailers are thriving.

Upscale department stores such as Neiman Marcus and Nordstrom have been enjoying double-digit sales growth this year, said Malachy Kavanaugh, spokesman for the International Council of Shopping Centers.

Neiman Marcus' June sales grew 13 percent over the previous June, according to the company's Web site.

"A lot has to do with the economy, the tax rebates ... the (strong) housing market in which people can cash out equity on their homes," Kavanaugh said.

Discount retailers have seen more modest results because the economic recovery hasn't trickled down to middle- and lower-income customers, he said.

Neiman Marcus oozes style and exclusivity. Its cache of labels are the finest the fashion world offers -- $3,000 leather jackets by Valentino and $485 satin pumps by Manolo Blahnik, to name a few.

Most labels sold by Neiman Marcus, known to some critics by the moniker "Needless Markup" already are available in Charlotte at specialty shops such as Paul Simon, or at department stores such as Nordstrom, which opened in March, and Belk.

Other brands found under a Neiman Marcus roof have their own shopping outlets. Burberry, known for its iconic plaid check rain hats and coats, and Louis Vuitton, known for its designer Marc Jacobs, are two such examples. Both have stores in the new SouthPark wing that Neiman Marcus will enter.

But high-end shopping isn't just about access to luxury goods, shoppers say. Neiman Marcus is as much about the experience.

"Neiman Marcus to me is the ultimate. It kind of says elegance to me," said Judy Hovis, president of the Charlotte chapter of the National Association of Women Business Owners and an avid shopper.

Hovis, a telecommunications executive, said she'll do lots of shopping when Charlotte's Neiman Marcus opens.

Rumors of Neiman Marcus' arrival had circulated since last July, when Charlotte developer Dee-Dee Harris said she would bring competing retailer Saks Fifth Avenue to the corner of Park and Gleneagles roads. Faison had announced that Saks was headed for SouthPark's new wing. But with Saks no longer destined for SouthPark, the buzz centered on Neiman Marcus.

It's unclear how Neiman Marcus might affect Harris' plans for Saks. In April, Harris sent letters to city and state officials asking for financial assistance to complete her $200 million project, where construction has stopped. Harris did not return a phone call seeking comment.

For the past year, SouthPark merchants have fielded queries from shoppers who had heard the Neiman Marcus rumors. One retailer, Michelle Schmitt, said she frequently asked mall management if it would land Neiman Marcus.

"I am interested on the business end. I want more people shopping here at my cart," said Schmitt, owner of the BeJeweled cart that sells pearl and sterling jewelry. "The more the merrier really. It brings more money to everybody."

Retail and real estate analysts said Neiman Marcus will lure customers from miles and even states away. Charlotte's location will be the only one between Washington and Atlanta.

Warren, the real estate analyst, said, "This will bring customers in from locations farther away from Charlotte, and those customers will be high-end."

Name Brand
** The store in Charlotte will be No. 39.
** Closest store to Charlotte now is Atlanta's 154,000- square-foot store that opened in 1973.
** HQ: Dallas, Texas

Tuesday, July 06, 2004

beautiful food court with mediocre food

SouthPark’s new food court opened recently, and this lady who wrote the article below shares my disappointment with the food choices. Although she’s making a little much of Chick-fil-A. The old food court wasn’t as dingy as she said, actually it was quite nice in a 1988 sort of way. I miss when they used to have Bananas /Everything Yougurt, Bain’s Deli, Mrs. Field’s and Flamers (circa 1996). They were good.

Trust me on this one. If you’re there and hungry, go with Maggiano's, Cheesecake Factory, Arthur's in Belk and Nordstrom's café.

Please read the article below, and tell me what you think.

Posted on charlotte.com on Fri, Jun. 18, 2004


Can't the food match the court?

I, apparently the only woman in the free world who did not care when Nordstrom agreed to a SouthPark site, have since eaten my words: cool shoes.

But the words turned out to be tastier than anything I tried at the recently opened SouthPark food court near Nordstrom. Aside from Chick-fil-A -- the once, current and future king of fast food, in my opinion -- the food emporium, as it were, has no clothes.

Which is not to say it doesn't look great. It does. Really great. Airy, clean-lined, studded with palms and with a double-high central area delineated by handsome columns. Matte-silvery chairs with blond wood seats and a cream-and-white tile floor aid the light-filled feel of the place, a vast improvement over the dingy original. It'll connect to an outdoor plaza, slated to be done by September, if not sooner.

But the food?

Bistro 7 isn't open -- and probably won't be until fall, since it just began construction. It'll offer rotisserie meats, soups, salads and sandwiches. Nestle Tollhouse Cookies/Auntie Anne's Pretzels also isn't open yet, but we know what those are. I'm a fan of the buttery pretzels with varied toppings, but they're no vibrant surprise. Neither are the places staying from the old food court: Great Steak & Potato Co. (eh), Villa Pizza (ecch) and Showmars (yum).

But -- and here's the sad thing -- neither are the new places: Maki of Japan, Chinese Gourmet Express and Subway.

Subway you know. Chinese Gourmet Express offers a steam table with two- and three-item combos and the like. Strictly average on my visit. Maki of Japan may bear watching. At least sushi and tempura are on its menu, though the first was prepackaged and average, and the last not offered when I went. Bourbon-glazed chicken was OK, noodles greasy, but plans do call for on-site grilling when more equipment is in, says mall director of marketing Julie Harrell.

And that could be as good as it gets for court-eaters. Sit-down dining, joining Maggiano's, Cheesecake Factory, Arthur's in Belk and Nordstrom's cafe and E-bar, is still planned at the mall's west end, with details out maybe next week, says Harrell.

Nordstrom taught me to wish for shoes that go with what I'm wearing. Now I wish we'd gotten food to match the court.

Monday, July 05, 2004

Dead Mall Story: South Square Mall, Durham, North Carolina

This is one of the "dead mall" stories I sent into deadmalls DOT com. Brian Florence hasn't gotten around to pubishing this yet, but I'm sure he will soon. In the meantime, enjoy...

There are several large green highway signs along US 15/501 north from Interstate 40 announcing the site of South Square Mall in Durham, North Carolina. At that site, located near the intersection of the 15/501 bypass around the city and the business route, there are a couple more. But there is no mall. There are remnants of the former complex: an Office Depot that was once a supermarket and even some old parking lot lighting, but nothing else. In its place stands a shiny new Sam’s Club, a Super Target store and Ross Dress for Less. The new shopping center, still called South Square, is impressive and well-trafficked, but pales in comparison to what stood on the site a few short years earlier. That site, surrounded today by office towers, fast food restaurants and a couple of Michael Jordan’s new car dealerships, is where South Square Mall opened in the summer of 1975.

The American enclosed mall boom was well underway in the mid-1970s, and the Raleigh-Durham area was no exception to the trend. South Square was not the first enclosed mall in the area, or the first in its neighborhood. It was, however, the largest mall in Durham when it opened, and signaled the decisive shift of commerce away from downtown. Anchored at first by JCPenney, Belk-Leggett, Montgomery Ward and Miller & Rhoads, this was a middle market mall with upscale aspirations and the demographics to prove it. It was large and fancy enough to attract shoppers from both nearby Chapel Hill, which saw its own enclosed mall, built two years earlier, take a direct sales and prestige hit from South Square, and from the growing Research Triangle Park, with its high-income employees, many of which had come from larger cites already very familiar with suburban shopping.

For the first twenty years or so, South Square was able to rest on its laurels with no threats to its existence. The anchors were largely stable. JCPenney and Belk-Leggett remained at the mall through its entire existence. Montgomery Ward closed due to poor sales in 1983, only to be replaced by a splashy new Ivey’s a year later (which became Dillard’s in 1990). About the same time as Ivey’s arrived, Miller & Rhoads closed due to a retrenchment by its parent company and the space was taken over by a spacious new food court. The mall was remodeled in the mid 1980s and the tenant roster changed from Seventies stalwarts like Kinney Shoes, Radio Shack and Orange Julius to up-market chains like Abercrombie & Fitch and White House/Black Market. There was even talk of expanding the mall to accommodate a new Hecht’s store in the early ‘90s. Things, it seemed, couldn’t be better.

A single word changed the game for South Square and forever altered the Raleigh-Durham area’s retail balance: Southpoint.

At first conceived as a small, possibly open-air shopping center to capture more of the Research Triangle Park’s retail wealth in Durham County at a site along Interstate 40, eight miles to the east of South Square, Southpoint’s early developers, Urban Retail Properties, was able to get the attention of May Department Stores’ Hecht’s division, which was the first anchor signed. Hecht’s had no nearby locations and negotiations had broken off with South Square’s developers, Faison Associates. Soon, Sears committed to the project as well. At first, South Square and Southpoint were to be seen as friendly rivals, complimenting each other much like South Square complimented the offerings at University Mall in Chapel Hill and Northgate Mall across town. But Urban picked up more interest in its project as conditions at South Square began to deteriorate.

South Square Mall had been coasting for many years, as was stated earlier. The area around it remained prosperous and there were few alternative venues for chain stores in the immediate area. Faison began using the mall as a “cash cow,’ taking more money out of the property than it was investing into it. As a result, the mall began to look and feel tired. Maintenance began to drop off, crimes went up. Sales stagnated, especially as cross-town formerly friendly rival Northgate Mall completed a major expansion and renovation in 1995. The 1980s renovation at South Square was wearing thin, and many of the chain stores stopped remodeling or simply closed. The retail market was evolving from traditional mall tenants to big-box retailers and discounters, spearheaded in the Durham area by New Hope Commons, two miles west of the mall at Interstate 40 and US 15/501. To be sure, the mall was getting squeezed. Faison began to promise renovations for South Square starting around the same time that Northgate remodeled, but nothing ever happened.

Belk-Leggett (which became Hudson Belk in 1997) and JCPenney were officially committed to staying at South Square as late as 1999, but Urban Retail, sensing its project could become a major regional destination, began to woo Nordstrom. Nordstrom had no local stores but plenty of local fans and had broken off negotiations at two other nearby shopping centers. Southpoint had many advantages: it was a new site, close to a high concentration of wealth and already had a lot of retailer interest to boot. So, after some trepidation, North Carolina’s first Nordstrom store was set to open at Southpoint. Nordstrom turned Southpoint from a pipe dream to a contender for the area’s retail supremecy. With the threat of an upscale mega-mall harnessing a majority of South Square’s customers, JCPenneyand Hudson Belk made the decision to move to Southpoint, thereby signaling the imminent death of South Square Mall.

The Streets at Southpoint (as it came to be called) opened on March 11, 2002 to an enthusiastic public response. That same day, South Square Mall was emptied of two of its anchors and nearly all of its small shops. Dillard’s was the largest store in a “ghost mall” where the remaining stores planned to leave as soon as their leases would let them. Most of the last stores were either traditional retailers that were discouraged from leasing at the new mall (athletic shoe stores, Radio Shack, Piccadilly Cafeteria) or mom or pop stores that couldn’t afford the substantial rents elsewhere. By August, Dillard’s pulled the plug on its store and the city of Durham, citing falling sales. South Square Mall was closed for good by Christmas of that year.

The flattening of South Square Mall was one the largest demolitions in the history of Durham and was carried out in the spring of 2003. Many ideas for the site were offered in public forums around the area, but ultimately retail won out. Construction started on the “new” South Square in summer 2003 and continues to this day, with its first new store, Super Target, opened in March 2004.

Thursday, July 01, 2004

The Incredible Shrinking Kmart

Being the retail nut that I am, I grabbed this story from VisualStore about Kmart's plans to sell off even more stores to other retailers, namely Sears.

I used to have Kmart stock a few years ago. When I bought it, they were on an upswing (I thought) and seemed like a good investment. Little did I know, the bottom was about to fall out of the stock price. My small investment not only lost money, but the stock itself became worthless when Kmart Corporation dissolved under Chapter 11 bankruptcy and was reborn as Kmart Holding Corporation with all new stock (which is doing very well, I might add).

I was largely indifferent to Kmart before; I mean it's okay, but Target's a little cooler and Wal-Mart has better prices. Nowadays, even though I should have taken my money and went shopping at Kmart rather than invest in it, I kind of like it. They have some cool things and these days it's easy to get in and out of. It's sad to see it wither away. Oh well, the only thing that doesn't change is the fact that everything changes. Read on.

Sears Goes Shopping
Retailer to acquire 61 former Kmart, Wal-Mart locations

from visualstore.com

Sears, Roebuck and Co. (Hoffman Estates, Ill.) has agreed to acquire ownership or leasehold interest in up to 61 off-mall stores from Kmart Holding Corp. (Troy, Mich.) and Wal-Mart Stores Inc. (Bentonville, Ark.) for approximately $620 million in cash.

The majority of the stores are expected to be converted by fourth quarter 2005 to Sears nameplates, including a new mid-size format that is modeled on Sears Grand.

The Kmart stores are located primarily in large, urban markets with home, family and income demographics similar to Sears' target demographics. The seven Wal-Mart stores are located in mid-size markets that Sears says also fit well into its market and demographic profile.

"These transactions will jump-start our strategy to grow the Sears brand off-mall, increase our points of distribution, and acquire well-located real estate at a fair value in key markets for Sears," said chairman and ceo Alan Lacy. "The acquisitions will allow us to quickly open more stores and significantly boost our off-mall retail presence in priority markets that have synergies with our existing mall-based stores."

Sears said it plans to increase the pace of growth for its Sears Grand format, targeting three of the newly acquired Kmart locations for conversion to Sears Grand stores. Including the previously announced four Sears Grand stores expected to be opened by the end of 2004, the company expects to be operating 12-14 Sears Grands at the end of 2005.

The portfolio of stores to be acquired average 110,000 gross square feet and 84,000 selling square feet, compared with an average of 90,000 selling square feet for Sears’ current full-line stores. Most of the new stores will be converted to the new mid-size format, modeled on Sears Grand. The floor design of the new stores will be on one level, utilizing a common layout similar to the open-racetrack design of existing Sears Grand stores, with exit cashiering near the door. The design will allow more efficient store operations and a significantly increased ratio of selling to gross square footage.

“Almost 60 percent of these new locations will be in the top 15 DMAs and will significantly increase our store coverage in the nation's largest markets, filling in our footprint and supplementing our mall-based stores by providing customers with the convenience they need," Lacy said. "Starting with a "Best of Sears" assortment tailored for specific markets, we will employ many of the successful merchandising and design elements of Sears Grand in the mid-size floor plan of the new format. These new off-mall stores will have improved operating efficiency and leverage our supply chain and marketing expenses."

Sears will pay cash for the Kmart stores and make lease payments under subleases for the seven Wal-Mart stores. The acquisitions include real estate and Kmart store fixtures, but exclude inventory and liabilities not related to leases. Sears expects to take possession of four stores in 2004, up to 55 stores in 2005 and the remaining two stores in 2006. Sears plans to invest approximately $200 million to remodel and re-fixture the stores, and expects to complete conversions of the majority of the locations by fourth quarter 2005. The acquisitions are expected to be accretive to earnings in the first full year of operation, 2006.

The Sears deal, and a previously announced sale of store locations to The Home Depot Inc. (Atlanta), will net the struggling Kmart almost $1 billion. "Both transactions represent opportunities to realize value, which can be utilized to improve the remaining store base and to strengthen the company," said Kmart president and ceo Julian Day. "We are not currently in discussions regarding any additional significant store sales, although we will continue to evaluate opportunities as they arise. Kmart will remain one of the largest retailers in America, with over 1420 stores and approximately $20 billion in revenues. We will be able to direct all our attention on building upon and accelerating the considerable operating improvements that we have already achieved, including the fall apparel launch in July and our partnership with the WB Network. We have a strong management team in place and are committed to making Kmart a better company every day."