June 06, 2005
Proposed Expansion: Old Orchard Goes Lifestyle
Here at the Old Orchard Observer, we've talked about consolidation in the retail industry, especially as it pertains to mall anchors. With Marshall Field's being acquired by Federated, 3 out of 5 anchors at Old Orchard will be owned by the same company. Then just last week it was announced that Saks Inc. would be closing the Saks Fifth Avenue store at the mall, resulting in another unknown for Old Orchard Center. In short, anchors are going to be lost. So what do you do instead?
Traditionally, large malls have been built on the assumption that anchors draw you to the center. Hence the label, "anchor." Often, the appeal of a mall has been built on what anchor stores are present. From a business perspective, rent and leasing rates are determined based on the number and size of the anchors in a mall.
But in case you haven't noticed, there aren't enough anchors to go around these days. There is consolidation, like what is taking place with Federated and May. There is a change in strategy, like what you see in Sears moving away from mall-based stores. There is a downsizing and focus on profitable stores, evident in what took place last week with Saks; J. C. Penney is also a good example here. And of course there is the loss of anchors altogether, as in Montgomery Wards and the like.
This has created a void for traditional malls as they try to figure out what to do. Many have chosen to go with somewhat alternative anchors. For example, the mall I used to work at, Randhurst (Mt. Prospect, IL), recently built a Costco as a part of the mall. Here in the city, unique architecture has allowed traditional "all in one stores" stores like Target to serve as anchors.
The growth of big boxes (Wal-Mart, Target, warehouse clubs, etc.) and category killers (Best Buy, Barnes & Noble, Home Depot, etc.) has changed the way people shop. It also is changing the world of mall design and planning. Unfortunately, malls are large and heavy on infrastructure... you can't easily change course and reconfigure.
Sometimes there are exceptions, such as Brickyard Mall, a local mall I grew up with here in the city. It was a large, two-story, indoor mall that basically outlived its usefulness. It recently reopened after being completely torn down and rebuilt as The Brickyard, an outdoor center with a mix of big box retailers and specialty stores. So far, it's been quite a success story.
Other local shopping centers are shooting to become lifestyle centers, the big buzzword in retail these days. A lifestyle center is typically an open-air shopping center that doesn't really feature anchors. Instead, the mix of stores comes more from the specialty retail/boutique side of things. Often they are modeled to look like small towns, full of sidewalks, park-like places, and common areas. They don't require as much space as a large indoor mall and they offer convenience to a typically affluent shopper, as they can just park their oversized SUV nearby and quickly shop.
The "lifestyle center" concept was pioneered by Poag & McEwen with the construction of The Shops of Saddle Creek in Germantown, TN, in 1987. My current employer is located near another lifestyle center that recently opened, 500,000 sq. ft. Deer Park Town Center in suburban Chicago.
So what do you do when you are a traditional mall, you are losing anchors, and the trend seems to be towards lifestyle centers? Well, you build a hybrid! Last July, a suburban mall called Yorktown Center (previously the home of Big Idea) announced that they were going to tear down some vacant anchor space (formerly populated by Montgomery Wards) and build a lifestyle center concept called The Shops on Butterfield. Uniquely, this development would actually connect with the existing traditional indoor mall and feature an attached hotel. It will be interesting to see how that plays out, as the new development is set to open in 2006.
Even knowing these trends, I was shocked today when I read the following story in Crain's Chicago Business regarding what may happen to Old Orchard down the road. I guess the concept makes sense when you think about it...
Giant expansion for Old Orchard
Size would rival Woodfield as new vision for regional malls takes shape
June 06, 2005
By Sandra JonesThe owner of Old Orchard shopping center has drawn up plans to bulldoze the Saks Fifth Avenue and Lord & Taylor spaces there to make way for a Main Street-style shopping promenade — an estimated $100-million expansion that would put the Skokie mall on par with the region's largest, Woodfield Shopping Center in Schaumburg.
Source: Crain's Chicago BusinessOwner Westfield Group's proposed site development plan, obtained by Crain's and dated May 20, calls for building 53 new specialty stores and restaurants totaling 650,000 square feet. The plan calls for a string of 24 stores backing up to Skokie Boulevard with trees, walkways and small courtyards modeled after the so-called lifestyle centers that have been drawing shoppers from traditional malls.
That strip would replace parking on the east side of the mall, the most traffic-congested. The surface parking would be eliminated and the parking deck outside Lord & Taylor would be torn down. In its place, a new parking deck would be constructed at the southeast end of the promenade near Golf Road. More specialty retail is proposed on the west and north sides of the mall.
The expansion, if approved as-is, would bring Old Orchard to 2.3 million square feet, an increase of about 25%. Retail experts estimate the cost of the overhaul at more than $100 million.
A spokeswoman for Australia-based Westfield calls the plan "very exploratory," explaining the proposal is a way for Westfield to get "a sense of the marketplace." And it still needs the approval of Skokie village officials and the remaining department store anchors: Nordstrom, Marshall Field's and Bloomingdale's.
Still, the ambitious proposal underlines the problem facing all mall operators these days. Malls like Old Orchard were designed to be anchored by department stores. But the department store industry is shrinking, and shoppers now have fewer reasons to go to the mall.
"The rules of the game have completely changed," says Gerhard Plaschka, managing partner at Chicago-based MindFolio, a consulting firm that studies malls. "You have to break the rules and come up with something that makes customers choose a mall. The old story that anchor stores are the mall magnets isn't true anymore."
AMONG OLDEST MALLS IN U.S.
When Old Orchard opened in 1956, it was one of the first malls in the nation. It led the suburban retail revolution, bringing downtown department stores to the newly constructed neighborhoods that ringed the city. Marshall Field's, Old Orchard's oldest tenant, spearheaded the project and played a key financial role in its construction.
Now, Marshall Field's, which has had a string of owners since the mall was built, is about to be sold for the second time in a year. Federated Department Stores Inc. of Cincinnati agreed earlier this year to buy Field's as part of its $11-billion acquisition of St. Louis-based May Department Stores Co. May purchased Field's from Target Corp. last year.
THREE ANCHORS, ONE OWNER
Once the deal closes, as expected this fall, Federated will own Field's, Bloomingdale's and Lord & Taylor at Old Orchard — three of the four remaining anchors.
Saks Inc. announced in May that it intends to shutter its Saks Fifth Avenue store at Old Orchard in July as part of a move to scale back and reorganize the luxury chain. Federated is expected to shutter the Lord & Taylor store and eventually turn either Field's or Bloomingdale's into Macy's, according to retail sources. The two department stores combined accounted for about 220,000 square feet of retail space and about $30 million in annual sales, retail sources say. Officials with May and Federated decline to comment.
"All the major malls are facing department store consolidation," says John Melaniphy III, vice-president of Melaniphy & Associates, a retail real estate consulting firm in Chicago. "There aren't department stores waiting in the wings (to expand), so malls are looking to specialty stores and restaurants."
A sign of how times have changed in just a decade: Old Orchard's last major renovation in 1995 — under a previous owner, a group led by real estate mogul Sam Zell — hinged on the arrival of two new department stores, Bloomingdale's and Nordstrom, to the mall. The $100-million makeover targeted the stroller set with gardens, fountains and outdoor play areas for children.
Today, malls are scrambling to meet fickle shoppers' demands for convenience and entertainment. If either is lacking, they aren't likely to show up, analysts say.
Old Orchard has already begun sprucing up the mall with a new Apple Computer store, which is often crowded. It's also opened harder-to-find specialty stores in the past year including Lacoste, Clarks Shoes and Sigrid Olsen. Soon to debut: NikeWomen.
Still, competition to attract desirable retailers is expected to get tougher as Northbrook Court, another North Shore mall, goes through a similar, but smaller, effort to attract one-of-a-kind stores.
'POSITIVE' ADVANCE REVIEWS
Potential tenants have so far viewed Westfield's preliminary proposal as "positive," says the Westfield spokeswoman. She declines to comment on specifics of the plan. Retail sources familiar with the makeover say it's likely to be complete in 2007.
"This is a great opportunity," says Mr. Plaschka, the mall consultant. "They just need to understand that you have to break the rules. That's the challenge. There is no standard mall mix anymore."
Source: Crain's Chicago Business
Posted by Tannerman at 10:38 PM
May 19, 2005
Signage migration begins at Old Orchard
During a recent trip to Old Orchard, Amy and I noticed that Westfield has begun the promised removal of the word "Shoppingtown" from their branding.
Besides cutting down the official name to something shorter, the new branding also changes the font used to spell the mall name, in this case "Old Orchard." A horizontal white line has also been removed. According to my graphic designer friend Chris Arndt of Arndt Design, "what's distinctive about the new font is the 'r' and 'a'. It's clean and contemporary. Part of the class is going from upper case to title case." So there you have it!
Posted by Tannerman at 02:34 PM
May 09, 2005
Security doesn't like photos
I came across this Old Orchard photo on Flickr today, a community-oriented photo-sharing website. I had to chuckle at the description the author provided:
As I took these pictures, solely focusing on the dead or dying flowers, several security guards passed me, looking mystified and slightly alarmed.
Those Westfield Mall Cops sure get freaked out for no reason!
Posted by Tannerman at 09:28 AM
April 21, 2005
Takin' photos at Old Orchard
Having previously worked for a real estate investment trust (REIT) -- that's fancy talk for a company the builds and runs malls -- I'm somewhat familiar with the policies that are often put in place for a property. As much as people choose to forget, a shopping center is not public property, and therefore those who utilize them are subject to the rules of conduct that are imposed. It's even harder to come to grips with this when the shopping center is an open-air mall like Old Orchard because it feels like city streets or a park.
I remember when I was a kid we used to do these photo scavenger hunts with my youth group using Polaroid cameras. The ideal location was the area's largest mall, Woodfield. Given the size of that place, you could easily spread a group out to discover unique situations for film. However, every time we did such an event, we were required to get permission from mall operations first.
For some reason, retailers seem a bit nervous about cameras. Maybe they are afraid that a competitor will take photos of their window displays, signage, or something. Who knows. When I worked out at Randhurst, I don't believe that photography inside the mall was generally allowed. However, being a member of the management office, I was allowed to freely roam and take personal photos if I wanted. I was also often tasked with taking photos of storefronts on behalf of the leasing office. Often, photos are used inside the industry when a retailer is trying to sell a concept to a certain shopping center. They help illustrate what a store will look like, etc.
Given the scope of the Old Orchard Observer, photos help illustrate the "news and views" that I write about. Amy and I have taken photos at Old Orchard before without problems. But, just to be on the safe side, I thought I would walk over to the Customer Service area (which Westfield ridiculously calls the "Shopping Concierge Center") and ask what the mall's policy was on photography. Often, you'll find a Code of Conduct posted at the entrance to a center, but I could not find one.
While I was talking to the folks at Customer Service, a Old Orchard security officer joined the conversation to add his insight. According to what he told me, photography inside a store is not allowed. However, outside photos of the landscaping, such as flowers, topiaries, etc., would be acceptable. If you are taking a photo of another person outside while in the mall, that is allowed. However, they tend to frown on photos of actual buildings. Sounds like an obscure policy, but I can understand the concerns.
So, apparently, to be in the clear, I just need to have Amy included in every shot I take at Old Orchard!
Posted by Tannerman at 01:02 PM
April 20, 2005
Where is Old Orchard?
Old Orchard is located north of Chicago in the suburb of Skokie, inland of an area that is locally referred to as the "North Shore". Demographics tend to be upscale, with an average household income (HHI) of $110,046 (2001 figures per Polk/MapInfo Target Pro Demographic Analyzer). Comparatively, Chicago's HHI is $83,163, while the national average comes in at $59,148. So, it's without saying that Old Orchard is located in a prime area for retail success.
Located right off of I-94 (Edens Expressway), Old Orchard is roughly 20 minutes from our apartment in Chicago. It's bordered by Old Orchard Road to the north, Skokie Blvd. to the east, and Golf Road to the south. There is no direct access from the west off Lawler Ave. Access to the mall from the Interstate is at the Old Orchard Road exit.
The Center is located on a rectangular plot of land and the main walkways are actually oriented on an angle, following a northeast to southwest direction. Like most regional shopping centers, the core buildings are at the center, while parking lots surround the complex. Most lots are at ground level, however there are also 4 parking garage structures. At Christmastime, it's very hard to find a parking spot at Old Orchard.
The layout of Old Orchard emphasizes the 5 anchor stores it contains: Nordstrom, Saks Fifth Avenue, Bloomingdale's, Lord & Taylor, and Marshall Field's. You'll find these retail giants located at key points throughout the property, somewhat evenly spaced from each other.
Posted by Tannerman at 08:34 PM
April 14, 2005
What the heck is this?
So, I know what you are saying. "Steve, do you really need another website to worry about?" After all, I already have a blog over at SteveandAmySly.com. I already have a pretty active set of discussion forums at TannerWorld Junction. I already have a professional portfolio website. Not to mention some odd side projects. Oh, and I do have a real job keeping things running at Kidology.org. So what am I doing launching something new at Bounga.com?
The truth of the matter is that most of the above projects were experiments. Either with software platforms (vBulletin over in TannerWorld Junction), journalistic tests (personal weblogging), adding new ideas to an old process (integrating online elements into a wedding), or concepts in online interaction (pretty much any crazy contest or event from the forums). That's what I'm doing here.
The current buzz in both the online and offline world revolves around blogging. While Amy and I have been doing that for a few years with our makeshift publishing system on SteveandAmySly.com, I've never used a blog-specific tool. Interest in blogging has grown, whether it be with my employer, professional contacts, or friends. Many want to know about the ins-and-outs of this whole blogging thing. So, to familiarize myself with current online trends, I have installed Movable Type, a popular online publishing tool used often for weblogs and journals.
As is often the case with those who decide to start blogging, they often rant about their personal lives or comment about other items they see online. Eventually, they get bored with the concept and yet another publishing area is abandoned. Because guess what, it takes a lot of work to write! So as I was thinking about testing out this platform, I obviously needed something to write about. Something that wouldn't demand a lot of my time with daily updates, but something that would provide for frequent updates with unique content.
I decided to write about Old Orchard Shopping Center, a large open-air mall located in the Chicago suburbs. I was already writing about the center infrequently on SteveandAmySly.com with items such as Death at Old Orchard (12/19/03), Lights out at Illuminations (2/19/04), Photo Update (7/14/04), Photo Update (12/9/04), and well as covering nearby shopping centers. It was only natural to take this personal interest and adapt it to the content needs I have here.
Also, for those who don't know, I worked in the retail industry for a while, employed by an owner and manager of shopping centers across the country. Thus I have an established interest in this phenomena of American culture. Plus, given my interest in themed environments and how they relate to human experience, adapting to Old Orchard's outdoor, park-like setting made sense. Finally, Amy and I often spend our "date nights" at Old Orchard, so it's not like I'm going out of my way to visit.
So that's the plan. To discover more about Movable Type and how it relates to the world of online publishing while focusing content around a definable, updateable subject matter. Oh, and it finally gives me a reason to use that Bounga.com domain I've had sitting around for a while! :) This thing will be constantly evolving. We'll see what happens.
Thanks for reading!
- Steve
Posted by Tannerman at 06:09 PM