New Saks will mean a gap at Southgate SARASOTA: Luxury retailer confirms
Justine Griffin/Sarasota Herald-Tribune
Saks Fifth Avenue announced plans late Thursday to close its Westfield Southgate Mall store late next year, ending months of speculation about the luxury retailer’s future in Sarasota.
Saks, which plans to open a new, larger department store to anchor the planned Mall at University Town Center in October 2014, had not previously disclosed its plans for Southgate.
“Saks Fifth Avenue presently operates a store at Westfield Southgate that will close when the new store at The Mall at University Town Center opens,” the company stated, at the end of a lengthy press release highlighting aspects of the UTC store.
Saks’ shift could send tremors through Sarasota’s retail sector, particularly among customers of the resort-style store that debuted at Southgate in 1996.
Most notably, the departure of the mall’s most exclusive merchant could have broad implications for Southgate’s future and its tenant mix. Thanks to so-called “kick-out clauses” in most merchants’ leases, tenants like Williams Sonoma, Coach, Ann Taylor and Pottery Barn, among others, could leave the mall when Saks exits.
“Westfield will need to shift its mall from being a regional center to a community center in order to survive,” said Jeff Green, president of Jeff Green Partners, a Phoenix-based retail consultant who has done work in Southwest Florida. “They can’t operate how they once did.”
He said University Town Center “is going to establish itself as the destination center for retail in the region. That doesn’t leave Westfield a lot of room to compete. Historically, you see malls in these situations redevelop into lifestyle centers or community based plazas.”
Westfield said the departure of even key tenants like Saks from malls is commonplace in the retail industry, and landlords often have to re-evaluate when faced with departures.
“We wish Saks the best,” said Katy Dickey, a Westfield spokeswoman. “Retailers routinely evaluate options and prospects, as do landlords and developers like Westfield.
“We expect both of our Sarasota malls will continue to provide the best and closest shopping opportunities for the communities they serve,” added Dickey, referring to Southgate and Sarasota Square Mall. “Westfield believes in the Sarasota market and in the future of our assets there.”
Saks intends to open an 80,000-square-foot store — twice the size of its Southgate one — when UTC debuts next year.
That store, being developed at Interstate 75 and University Parkway by a joint venture between Taubman Centers Inc. and Benderson Development Co., will feature an expanded women’s shoe boutique, 10022-SHOE; an enhanced men’s section; and an exclusive in-house restaurant, the retailer announced Thursday.
The new store will be designed by noted retail architectural firm Jensen and Goldstein.
In addition to offering more merchandise and expanded lines, the UTC store will be accessible to thousands more potential shoppers from around the region.
Along with Interstate 75 visibility and access, the new store will be within close proximity to Lakewood Ranch, the master-planned community that has been the site of numerous luxury residential sales in the past year.
Retail analysts said the pending closing of Southgate is not a surprise.
“It’s not uncommon for retail nodes to change over time,” said Green, adding the new mall will strengthen the retail area around University Park. “People will drive further than what they’re used to based on this.”
But closing the Southgate location carries risks for Saks, as well. Most notably, the retailer could lose sales from wealthy Longboat Key patrons, who may be reluctant to travel all the way from the barrier island out to the interstate — a potentially hour-long trek during winter tourist season.
Saks officials on Thursday downplayed the impact the store closing would have on customers.
“It will be a smooth transition,” said Sally Schule, the local store’s marketing director, who had worked as the store’s general manager until recently since 2005. “We are leaving Southgate because of the opportunity to expand to a much larger store.”
Schule added the store’s staff will all transfer over, and the company will hire additional personnel, as needed. She could not answer whether Saks contemplated keeping the Southgate store open once the UTC store debuted.
Steve Sadove, the company’s chairman and chief executive, said in the release Saks will provide “our loyal Sarasota area customers with an expanded assortment of distinctive merchandise and an immersive shopping experience in a beautiful, innovative retail environment” at UTC.
The announcement regarding Southgate comes two weeks after Saks revealed that Joel Ellzey, the former manager of the Saks at Tampa’s International Plaza mall, will become general manager at the chain’s UTC outlet. Until then, Ellzey will manage Southgate.
Westfield’s Dickey said the mall owner would begin working to replace Saks, which anchors one wing of the mall.
“Westfield has a strong track record of recovering former department store real estate, and reorienting the merchandise mix with new anchors, specialty shops, restaurants, leisure, entertainment, and lifestyle options for our customers,” she said in a statement. “We view this departure as an exciting opportunity to add new elements, energy, choice and convenience to the center in 2015.”
She declined, however, to elaborate on Southgate’s direction or potential tenants to replace Saks.