Justine Griffin / Herald Tribune – Real estate developers and retail chain executives are cautiously optimistic that 2014 is the year for chain stores to expand into new markets and for overall industry growth.
With retail sales up in April more than 4.1 percent compared with a year ago, according to the International Council of Shopping Centers trade group, analysts are hopeful that more new business is on the horizon.
That could mean more new brands coming to Southwest Florida in the near future.
The optimism can be seen in the record number of people in Las Vegas this week at the council’s annual ICSC RECON convention — the largest retail real estate gathering in the world. Industry officials hope to sign more new deals and build momentum to pre-recession levels.
“We’re coming off a strong ICSC conference in New York last December, and now there are more people going to ICSC in Vegas than the last five years,” said Faith Hope Consolo, chairwoman of the retail team for New York City-based Douglas Elliman Real Estate.
“Florida is such an important market that’s seen a lot of growth and change — a lot of great survivors down there, reinventing the wheel,” she said.
Among them is the Westfield Group, which owns and operates six malls in Florida, including two in Sarasota County. At last year’s conference, the Australian mall operator announced a $62 million plan to redevelop Sarasota’s Southgate Mall into an outdoor dining, shopping and entertainment district. When renovations are completed, the mall will take on the name of Westfield Siesta Key.
Westfield recently redeveloped its other Florida properties, including adding a new wing to the Brandon Town Center. Last year, the company also renovated Broward Mall’s food court.
A new mall
The Sarasota-Bradenton market is unique in that it is the only part of the country where a new enclosed mall will open this year.
Taubman Centers Inc., a veteran mall builder that opened International Plaza in Tampa and the Mall at Millenia in Orlando, has partnered with Manatee County-based Benderson Development to build the Mall at University Town Center, a $315 million luxury retail project, which will debut in October.
Earlier plans to open the mall with high-end tenants like Neiman Marcus and Nordstrom were derailed by the Great Recession.
The mall will open with anchors Macy’s, Saks Fifth Avenue and Dillard’s. This is the first time Dillard’s has opened a new department store in years.
Saks Fifth Avenue has closed its Tampa store and will close its store in Southgate in October, leaving only on its 80,000-square-foot two-story space in the Mall at University Town Center to serve the entire Tampa Bay market.
That is a big move, said Jeff Green, retail analyst with Phoenix-based Jeff Green Partners. Luxury brands like Saks and Nordstrom have shifted gears to focus on their outlet brands since the downturn. Saks announced it plans to open seven new Off 5th outlet stores across the country this year.
Other tenants inside the mall include a mix of new and existing brands in the market, including Apple, Anthropologie, Michael Kors, Williams-Sonoma and lululemon.
“While I don’t necessarily think that the big story at RECON will be one of dramatic economic improvement, that tendency to look on the bright side will certainly contribute to a lot of lively discussion about important trends and the direction of the industry,” Green said.
Taubman Centers also opened the only enclosed mall in the United States in 2013. ICSC honored that Salt Lake City mall this week with a 2014 Viva Best-of-the-Best Award for its development and design.
City Creek Center, now one of the largest mixed-use downtown development projects, includes a two-story retail center with more than 100 stores and restaurants and more than 500 residential apartments.
What makes the Utah development unique is its indoor-outdoor component — made possible by a 30,000-square-foot retractable roof — as well as a pedestrian sky bridge and two 18-foot waterfalls.
Other than the Mall at University Town Center in Sarasota County, Taubman Centers is focusing on opening new malls in Asia.
The Sunshine State has welcomed several key new brands into the marketplace during the last year.
Trader Joe’s opened its first grocery store in Naples and its second in Sarasota and now has grocery stores in development across the state.
Costco Wholesale opened its first store in Sarasota County in 2012 in Westfield Group’s Sarasota Square Mall.
Wawa, the New Jersey-based convenience-store-and-gas station chain, has steadily made its way across Florida, with three stores and counting opening in the Bradenton and Sarasota markets this year.
Meanwhile, grocery store chains like The Fresh Market, Aldi and Save-A-Lot have continued to invest in Florida by opening new stores and distribution centers around the state.
Analysts expect more brands to follow suit.
“Last year, all the talk was about renovating existing centers,” said Dale Scott, a director at Hawkins Construction in Boca Raton and the Florida ambassador for ICSC.
Hawkins Construction tore down and rebuilt a 49,000-square-foot center at 525 Bay Isles Parkway on Longboat Key, which reopened in December 2012.
St. Petersburg-based The Sembler Co. completed a similar project in North Port last year.
“The difference between this year and last year’s conference is almost night and day,” Scott said. “Every forecast we see calls for more growth. Every retailer wants to come to Florida because of the tremendous growth we’re seeing.”
A robust housing recovery is helping fuel interest in the state again, Scott said, as pent-up demand has helped surge interest in buying new homes and, ultimately, building new centers to meet the needs of new neighborhoods.
Companies such as Gordon Food Service Marketplace, a grocery player that caters mostly to the restaurant-supply business, and Sprouts Farmers Market, a Phoenix-based specialty grocery chain with more than 150 stores across the U.S., have made “a lot of noise” about expanding in Florida, Scott said.
GFS Marketplace plans to open a second store in Southwest Florida later this year. The company is building a 12,600-square-foot store in the former Sound Advice space at 6307 S Tamiami Trail near Stickney Point Road.
Sprouts has yet to enter the Florida market, with its southernmost market in Georgia.
Outside of store expansion and new brands reaching new markets, retailers and real estate developers will be working together to reach young shoppers.
Taubman Centers is working to develop tools that would make the 880,000-square-foot Mall at University Town Center one of the most technologically advanced retail spots in the nation.
The company plans to use the retail hub as a testing ground for new digital, interactive tools aimed at combating online shopping and “showrooming,” in which shoppers use brick-and-mortar stores to try out products before buying them online.
“As many apparel retailers have realized, merchandise has got to be trend forward to be consistently competitive,” Green said. “As brands like Coldwater Creek have found out the hard way, when merchandise doesn’t change to keep up with fashion and emerging trends, the results can be disastrous.”
With 86 million young adults now entering the workforce in the United States, millennials outnumber the baby boomer generation by 7 percent, according to the U.S. Bureau of Labor Statistics.
In Florida, Generation Y and the over-65 population combined make up 42 percent of the state’s residents, according to The Florida Scorecard, a program run by the Florida Chamber of Commerce.
Macy’s has led the way in experimenting with ways to better serve the millennial generation. The chain’s private-label clothing brand, American Rag, recently launched a new social media campaign, called “All Access,” that allows shoppers to see exclusive music videos from popular artists like We The Kings and to sign up for contests and in-person autograph experiences.
Songs are available for download exclusively on American Rag’s Facebook page, and contests for gift cards and concert tickets encourage shoppers to use unique hashtags on Instagram, Twitter and Facebook.
Last year, Macy’s announced an expansion of its line of Gen Y brands in the spring, the second year in a row the department store chain has added to offerings aimed at the teen-to-20s age group, its next generation of shoppers.
While optimistic, big-box brands such as Target, J.C. Penney and Sears have struggled to remain relevant.
“Questions about which new chain store concepts have legs and whether or not there will be enough store expansion to fill some of the big-box vacancies are key issues this year,” said Green, the Phoenix-based analyst.
Target suffered at least some short-term damage when hackers in December gained access to customers’ credit and debit card information. The problems ultimately forced out Target chief executive Gregg Steinhafel.
The future is unpredictable for J.C. Penney Co., which closed stores across the country this year and foundered under new leadership and changes in merchandising techniques.
Sears, too, has struggled, closing more than 300 stores in three years and suffering 28 quarters in a row of declining sales.
“The bottom line is that I don’t necessarily see a dramatic turnaround on tap at a time when sluggish-to-modest industry numbers have seemingly become the norm, and a protracted economic recovery inches forward,” Green said.