Retailers take steps to compete in changing market
Justine Griffin/Sarasota Herald-Tribune
For decades, Southwest Florida shoppers have been limited to a few concentrated options: the Southgate, Sarasota Square and DeSoto Square malls, Main Street in Sarasota, St. Armands Circle and the lengthy stretch of Tamiami Trail.
But during the past five years, a shift has occurred that is transforming the epicenter of consumer spending toward University Parkway and Lakewood Ranch.
That shift will likely reach a zenith next year, when the planned Mall at University Town Center debuts, taking with it longtime Sarasota department store anchor Saks Fifth Avenue and offering a showcase for new Dillard’s and Macy’s stores.
With that in mind, merchants in downtown and regionwide — and especially Sarasota County mall owner Westfield Group — are already taking steps to adapt, improve and adjust.
Westfield, for instance, has even floated plans to tenants and industry insiders to transform Southgate into more of a lifestyle center, with a focus on dining and entertainment venues like a movie theater, rather than shopping.
“The more retail you put in one place, the stronger that area becomes as a retail magnet. That mall and the surrounding retail plazas will pull customers from a great distance,” said Jeff Green, a retail analyst with a Phoenix-based firm that has done extensive work in Southwest Florida.
The new UTC mall, which is expected to mimic both the look and feel of Tampa’s upscale International Plaza, will anchor what is already an area comprising several hundred thousand square feet of retail space.
But even before the $315 million mall now under construction opens in October 2014, there already is considerable retail movement and signs of beachheads.
In a former outlet mall on Cooper Creek Boulevard, for instance, Nordstrom Rack and Ashley Furniture both are working on stores set to open before UTC. Nearby, the University Town Center plaza boasts the region’s only SuperTarget, a Best Buy and other big box chain stores.
“It is stronger than any one mall or store is, and the strength of that part of town shows that the retail hub in Sarasota-Bradenton is changing,” Green said.
‘We’ve honed our niche…’
Business owners throughout the region agree that in order to stay competitive and remain profitable, they must tailor their stores to be “destinations,” and offer goods and services that shoppers cannot get from the chain stores or mall merchants.
Others contend the cluster of shopping and the new mall will not offer significant competition because of the nature of their stores.
Judy Johnson, who opened a fourth Swim City swimwear boutique on Tamiami Trail near the Ritz-Carlton Sarasota in March, said she sees a stronger potential customer base in downtown Sarasota.
“There are investors coming in and building new residences here. We are seeing a younger demographic and a different attitude surrounding downtown, and that is very exciting,” Johnson said.
Some see merchants and developers alike building on the nucleus of Pineapple Square, a planned $200 million mix of retail and residential space, that now includes a Brooks Brothers clothing store, Hyde Park steakhouse and a Sur La Table cookery store.
To a degree, that is already occurring, with investors like software entrepreneur Jesse Biter buying retail and office properties in downtown Sarasota.
In a first for the area since 2006, developer Tom Mannausa also is planning an 18-story condominium building on lower Main Street near the bayfront, in place of buildings that housed the Sports Page Bar and Grill and Living Walls furniture store.
“We’ve honed our niche, and we cater toward a specific kind of clientele, so location isn’t what drives sales for stores like me,” said Tatyana Sharoubim, the owner of T. Georgiano’s Shoe Salon on First Street, in the Whole Foods Market Center.
“We give customers a service that they want and can’t get anywhere else, which makes my store a destination,” Sharoubim said. “Then they have a reason to come to me.”
She opened her high-end shoe store in 2007, and says her customer base has grown significantly since then.
“Most of our customers drive over from Longboat Key or the hotels and resorts, but we do get walk-in traffic from the farmers market and other downtown events,” she said.
Nicole Pepe-Dorn also elected to open her women’s accessory and apparel boutique, Treat, in the Burns Court section of downtown Sarasota because of the eclectic vibe she senses there.
“There were a lot of spaces available on Main Street, but I didn’t need a space that big and wanted to be a part of a funky part of town,” Pepe-Dorn said. “My boutique is complimentary to this area.”
She initially considered the Lakewood Ranch area, because of the aggressive growth there, but passed because it felt too “suburban” to her.
“The new mall out there is going to be great, but not everyone is a mall shopper,” Pepe-Dorn said. “I don’t consider it competition. Some people still like to discover new shops away from the high traffic areas like a mall.”
Critical mass at University Parkway
But more than a few merchants — of all sizes — have moved to be closer to the critical mass that developers Benderson Development Co., Taubman Centers Inc. and Schroeder-Manatee Ranch are creating around University Parkway and Interstate 75.
Jodi Mailman, owner of Create Your Own candy store and gifts boutique, moved from Southgate to Benderson’s Shoppes at University Center more than a year ago.
“My business was the strongest when I was in Southgate Mall, but I really started to see what was happening there,” said Mailman, whose store debuted on Lakewood Ranch’s Main Street in 2006.
“The University Parkway area was starting to blow up like crazy,” Mailman said. “That’s where the customers were and still are.”
She said she has no plans to relocate ever again.
“Southgate Mall is washed up. Sarasotans are going to have to come out here whether they like it or not,” Mailman said. “The new mall is going to be amazing. This is where our town is growing.”
Assessing Southgate’s future
Without question, the UTC mall will have a significant impact on Sarasota’s pair of existing malls, which have struggled in recent years to keep tenants and attract more shoppers.
The loss of Saks alone and the potential for other tenants — like Williams Sonoma, Cache and Pottery Barn, among others — to go as well could force Westfield to radically rethink its Southgate retail hub, years after a series of upgrades and expansions failed to reach fruition.
To that end, Westfield presented plans to mall merchants and to an International Council of Shopping Centers conference in New York last year that would de-emphasize shopping and accent dining and entertainment.
Even the 28,000-square-foot Saks space could undergo a major overhaul, the plans contemplate, by converting it to an upscale movie theater or other non-traditional use.
For now, at least, Westfield is quietly assessing the future of Southgate.
“Westfield has a strong record of recovering former department store real estate and introducing new elements, energy, choices and conveniences for our customers,” said Katy Dickey, a Westfield executive and spokeswoman.
Even those who fret about the potential hit to Sarasota-area shopping say malls evolve organically over time and frequently undergo various incarnations to adapt to changing demographics and shopping habits.
“It is not uncommon for malls to regenerate themselves, and it is time for Southgate to do some major improvements and start again,” said Barry Seidel, president and founder of American Property Group of Sarasota Inc., a retail-oriented commercial real estate brokerage.
“Southgate Mall is still in a prime location,” Seidel said. “People will still shop there.”
Like many downtown merchants, Westfield also is showing signs of movement. In March, the Australia-based mall owner sold a half-interest in six of its Florida malls — including Sarasota Square and Southgate — to New York-based real estate firm O’Connor Capital Partners.
It is expected Westfield will use at least a portion of the $700 million in net proceeds from the transaction to reinvest in those and other properties.
“Traffic continues to increase at our two malls in Sarasota over the past two years, and we’re confident that we still target Sarasota’s core shoppers and continue to develop relationships with them,” said Sam Davidson, marketing director for both of Westfield’s Sarasota properties.