The very concept of mall retailing has been under fire for the past few years. Too many stores and too many malls make it difficult, if not impossible, to find good locations for new centers, analysts say. All malls look alike in terms of both design and tenancies, they complain. Industry analysts also note that people have less time for shopping - a potential problem for malls with layouts that encourage browsing.
In response to these perceived problems, big-box power centers emerged, offering easy drive-up access and larger merchandise selections than specialty mall retailers. In turn, conventional center developers introduced alternative formats. First came Main Street projects, then came strictly defined entertainment centers.
So when was the last time anyone built a center around the original mall concept of gathering the most exciting retail trends in the market together under a single roof?
-based General Growth Properties has done just that with its new Coral Ridge Mall in Coralville, Iowa. The 1.2 million sq. ft. enclosed mall accommodates all of today's successful formats, from time-tested department stores and specialty retailers to the latest entertainment offerings and big-box retailers.
After two months of operation, Coral Ridge Mall testifies to the health of the basic, original mall merchandising concept.
By July 30, the mall's grand opening day, General Growth had leased every square foot of retail space available and every store was open for business - a rare if not unprecedented accomplishment. In the first two weeks of operation, General Growth and Coral Ridge retailers found themselves not only reassured but also astonished by the property's performance.
"We projected 150,000 people in our first four days of operation," says Mary Kiley, senior vice president of marketing for General Growth. "We got 215,205. The following Wednesday through Sunday, we counted 192,353 shoppers. We're hearing reports of retailers shipping in merchandise from other stores and of sales plans being doubled."
Conventional wisdom In many ways, Coral Ridge is nothing more than a conventional mall: an enclosed center with anchors, specialty retailers and amenities, surrounded by parking, and located close to urban population centers along major highway and surface street access routes.
What makes the mall unique is a merchandising and leasing strategy that does not fight powerful contemporary retailing trends but reflects them. Instead of forcing department store and specialty retailers to compete with newer retail concepts at nearby centers, Coral Ridge brings together department stores, big-box retailers, entertainment features, a modern cinema and specialty retail - all working together under the same roof.
Coral Ridge houses 100 specialty shops (both national and local) and five conventional mall anchors: Dillard's, J.C. Penney, Sears, Target and Younkers, totaling 533,000 sq. ft.
On the contemporary side of the merchandising equation, the mall features a total of 181,600 sq. ft. of big-box retail space: Barnes & Noble (22,200 sq. ft.), Best Buy (38,000 sq. ft.), Disc Jockey (10,000 sq. ft.), Four Seasons (12,000 sq. ft.), Old Navy (16,400 sq. ft.), and a two-level Scheels All Sports (105,000 sq. ft.).
As for entertainment, the 26,400 sq. ft., 10-screen Central States theater and 9,400 sq. ft. food court make up the traditional component, while the Ice Arena and Children's Museum stand out as innovative mall offerings.
The 30,000 sq. ft. Ice Arena features locker rooms, a dasherboard system, hockey team boxes, spectator seating, an arena scoreboard over center ice, a professionally designed pro shop and birthday party rooms. Activities include skating programs for every age.
The 15,500 sq. ft. Children's Museum, operated by the nonprofit Iowa Children's Museum, features a gallery with five rotating hands-on exhibits and classes, an art studio and a children's theater.
The mall's common area engages children with two more entertainment features. A soft play area, sponsored by Deere and Co., highlights Iowa's agricultural heritage with foam-sculpted farm equipment including a bulldozer and combine, as well as 12-inch-high corn rows as balance beams. Also, children can pay $1 to ride a brightly lit, beribboned carousel made of hand-carved, hand-painted animals including a giraffe, deer, tiger, zebra and goat.
Interestingly, Coral Ridge Mall's intensive focus on children was accentuated on grand opening day, whenhit that the Washington, D.C.-based Children's Rights Council had ranked Iowa as the No. 1 state in the nation for raising children.
In fact, the state of Iowa takes center stage at Coral Ridge. A profound sense of place is achieved with 12 large murals throughout the mall that highlight Iowa's history and culture. The oil-on-canvas paintings by artist Thomas Melvin depict slices of Iowa life, with scenes of Iowans farming, fishing, pitching horseshoes or attending outdoor concerts.
The where is there Given the mall's phenomenal success in leasing, retailers apparently are banking on the Coral Ridge format, location and demographics.
"We make decisions on location based on how close we can get to customers," says Kirsten Maynard, a spokeswoman for the large-format Old Navy, a division of The Gap, San Francisco. "We found that Coral Ridge Mall is a great location."
While Coral Ridge reflects many emerging trends in the shopping center industry, it still obeys the world's oldest real estate commandment. "The one thing that will never change is 'location, location, location,'" says John Bucksbaum, executive vice president of General Growth. "It will always be a critical element to the success of any real estate property."
Located just off of Interstate 80, Coral Ridge occupies a prime spot, near an active college town with regular events that draw people to the area.
Population of the eastern Iowa marketing area is 277,500, a figure projected to increase by more than 10,000 early in the next century, according to General Growth market research. A relatively well-off, upper-middle-class area, eastern Iowa boasts an average household income of $45,000, a figure expected to rise to $53,500 by the year 2002. Fifty-two percent of households in the market area earn more than $35,000 per year, with 54 percent earning more than $50,000.
"The demographics of our location mean that this is not a mall just for Iowa City and Coralville," says Robert Michaels, president of General Growth. "We believe we will be able to market to all of eastern Iowa, a much larger trade area than those targeted by most regional malls."
Not only are consumers testifying to this belief but retailers as well. Old Navy, for example, has only one other store in Iowa besides the one at Coral Ridge.
Malls 101 In a return to mall basics, Coral Ridge gathers all the successful retailing currents - but in a mix tailored to contemporary tastes.
This update of conventional mall merchandising strategy entails a reduction in space available to specialty retailers, which account for only 219,000 sq. ft., or about one-fifth of the mall's GLA. Destination retailers, department stores, big boxes and entertainment offerings encompass about 800,000 sq. ft.
"Today's shopping center industry is undergoing a transformation evidenced by changes in shopping formats, shifts from full retail to entertainment components, and expansion to diverse demographic audiences," says Michaels. "With Coral Ridge Mall, we have completely redrawn the parameters of modern retailing. The result is a true hybrid of the best retail and entertainment concepts in the business."
Michaels points to the extensive consumer research General Growth conducted before developing Coral Ridge. The results confirmed a number of existing beliefs: Consumers want convenience and value. They want to get into and out of stores quickly when time is limited. They want selection.
General Growth took this basic research a step further and discovered that consumers still prefer the basic, conventional mall concept.
"Consumers told us that they want everything in one place," Michaels says. "They don't want a separate strip center with big-box players. So what we tried to do was bring all of the retail disciplines into a single concept."
Michael Fickes is a Baltimore-based freelance writer.
Designing Dilemma Solved at Coral Ridge At Coral Ridge, the decision to include big-box and entertainment retailers along with conventional mall tenants generated a rush of interest from retailers of all stripes, and General Growth ended up with the enviable job of picking and choosing among potential tenants. The merchandising mix was set and the mall was 100% leased a full six months before opening day.
Leasing Coral Ridge proved easy. The biggest challenge came earlier, with site planning and layout. Where would the department stores go? How would the big-box and entertainment retailers fit into the design? How many exterior entrances would be needed? How would the ring road and parking lots distribute traffic in a mall with an unusual complement of drive-up storefronts?
These questions would be answered by Des Moines, Iowa-based Hammond Adamson Design Group PC, which designed Coral Ridge Mall. Arthur E. Hammond and David A. Adamson, the firm's two principals, struggled from the outset with the problem of how to handle the big-box retailers.
Their first try placed all the big boxes at one end of the mall. The idea would have produced a mall with two focal points: a drive-up power center stuck onto a conventional mall.
"The more we thought about shopping habits, the more it made sense to revise this idea," Adamson recalls. "We were concerned about how to move people from thebig-box stores into the common areas and the other stores. Eventually, we realized that the best way to do this would be to mix the big-box retailers throughout the mall."
This approach would allow shoppers to see the entrances to the big boxes as they walk through the common areas. Destination shoppers, on the other hand, could drive right up to a big-box entrance and buy what they need without having to walk through the mall.
"In placing the big boxes and specialty retailers, we worked closely with the leasing managers to accommodate adjacency requests as much as possible," Hammond says. "One big box, for example, needed more space, and we actually redesigned a portion of the common area to handle that request."
Best Buy, the exception to the integrated site planning concept, stands on its own at the far east end of the mall, next to the Target anchor, and has only an exterior entrance. To get to the rest of the mall, shoppers must walk or drive around the exterior. Best Buy executives opted for no interior entrance to the mall on the theory that their store is strictly a destination.
By distributing the big boxes across the site plan along with the five department stores, the final design includes 20 exterior mall entrances, at least five more than a conventional five-anchor mall.
"With so many entrances, we had to be careful about traffic distribution and parking," Adamson says. "To make sure that traffic coming into the main entrance evens out quickly, we added a short secondary ring road just inside the main entrance. If you stay on this outer secondary ring, it takes you into a large main parking lot in the northeast quadrant of the site."
The inner ring takes shoppers to lots adjacent to J.C. Penney, Sears, Dillard's, Younkers, and the entertainment section of the mall next to Younkers.
Another design consideration involved bay sizes. What if a big-box retailer leaves and the leasing department cannot find another tenant with similar size requirements to replace it? "Throughout the mall, we maintained a basic 30-foot-by-40-foot bay size," Adamson explains. "That size works for both small and large tenants. So we can easily scale spaces up and down depending on what a tenant needs."
Scheels, a 100,000 sq. ft. big-box sporting goods retailer, has the only two-level space in the mall. "It would be more difficult to reconfigure that space," Adamson concedes, "but then again, its size is appropriate for most department stores."