Shopping Centers Today -> June 2007
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RETAIL SIZZLE

ICSC MEMBERS HAVE PICKED SIX TENANTS TO RECEIVE THIS YEAR’S HOT RETAILER AWARDS

By Edmund Mander

The annual Hot Retailers Awards ceremony itself might be fun, but who the winners are is serious business for landlords and retailers. As new centers of various types open each year, the competition intensifies, and landlords are ever on the lookout for tenants that will set their properties apart. Tenants have to stay on their toes too. When a new retail concept is launched or an existing one is relaunched, this can draw away customers. So all eyes in this industry are frequently on the tenants. This year’s Hot Retailers were selected following a survey of ICSC’s roughly 70,000 members around the globe. They were asked to name those concepts they consider to be most innovative and promising. Here are their answers. Those landlords that already have this year’s winners in their centers may grant themselves a pat on the back. Those that don’t are even now, perhaps, reaching for the phone!


Winner: J. Crew
Chairman and CEO: Millard Drexler
What we do: Classy clothing, accessories and service
Where we do it: Premier malls, lifestyle centers and distinctive freestanding locations

Millard “Mickey” Drexler set a new direction for J. Crew when he took over as CEO and chairman in January 2003, infecting the retailer with his famous passion for quality, eye-catching merchandise and impeccable customer service. First of all, he reinvigorated J. Crew’s product range using hot colors and interesting designs. Then he introduced some more-upscale goods. As the selection of high-quality goods went up, so did the chain’s performance. And it’s still rising: Revenues for fiscal 2006 increased 21 percent, and comparable-store sales rose 13 percent. Sales per square foot rose to $526 last year, from $457 the previous year. J. Crew now operates180 stores and 53 factory outlets, as well as its famous catalog and a Web “store.” J. Crew’s newly launched Madewell offshoot, which the company says offers high-quality apparel at lower prices, is getting attention too.



Winner: The Little Gym
President and CEO: Robert Bingham
What we do: Teach children lifelong lessons in health
Where we do it: Spaces measuring between 3,800 square feet and 4,300 square feet in wealthy markets

The Little Gym does not just mind your children; it also improves them, teaching them in the course of 20-week-long semesters some lifelong lessons in good health through karate, gymnastics and similar activities. So this is no place to merely drop off the kids when you want to do some shopping. No, by itself it is a reason to go to the shopping center in the first place. As such, landlords can see it as an anchor. Another bonus: Unlike many other gyms, the Little Gym looks attractive, slipping tidily into retail spaces measuring between 3,800 and 4,300 square feet. One parent was so impressed with the impact the place had on his two sons 14 years ago that he jumped at the chance to become Little Gym’s president and COO upon the executive board’s invitation. Today that parent, Robert Bingham, is CEO. The Little Gym is such a hit that it is really not so “little” anymore. Besides the U.S. and Canada, there are branches (all of them franchises) in 19 other countries.


Winner: Lucy
President and CEO: Michael Edwards
What we do: Prove that women can sweat and look great, all at the same time
Where we do it: Lifestyle centers, malls and freestanding sites

Be gone, sweatpants and dowdy tracksuits - women want to look good when they are exercising, not just feel good. So Lucy offers fashionable private-label and branded apparel and accessories that women are proud to wear not just while they work out, but also outside the gym. “Lucy is centered around positive energy, and our mission is quite simple: offer beautifully designed lifestyle apparel that inspires women to live healthy, active, balanced lives - with style,” the company said. Lucy now operates nearly 50 stores in 12 states and has plans to open 14 more this year and roughly 25 next year. The chain looks for lifestyle centers, malls and freestanding sites in areas where the average household income exceeds $75,000 a year.



Winner: ULTA
President and CEO: Lyn Kirby
What we do: Make beauty a beautiful experience
Where we do it: Preferably, in large, open-air centers, sometimes in lifestyle centers and malls

ULTA aims to make its stores supremely convenient by combining cosmetics, hair care, fragrance and skin care under one roof. But none of that comes at the price of aesthetics. ULTA’s 10,000-square-foot stores do not just provide beauty services; they aim to be beautiful themselves, with high ceilings, wide aisles and ample natural light. And though this luxuriant environment may look threatening to the pocketbook, it is not. The company calls its stores “an oasis where luxury meets affordability.” Customer service is a priority, with highly trained staff offering expert advice. Currently, there are about 200 ULTA stores in 26 states. The company says it plans to open about 50 per year going forward. It favors shopping centers that reflect ULTA’s own ambiance: attractive, convenient, hassle-free.


Winner: Uniqlo
CEO (U.S.): Nobuo Domae
What we do: Everyday clothes for everyday people
Where we do it: Shopping centers and freestanding locations

Uniqlo does not dictate how people look, but offers a variety of styles in keeping with its objective of providing “casual wear that can be worn by anyone, any day.” The company, owned by Japan’s Fast Retailing, sells a wide range of clothing for everyday wear, including T-shirts, sweaters, denim apparel and cashmere. But Uniqlo does want the items its customers buy to be of the highest quality. As the Fast Retailing name suggests, Uniqlo prides itself on getting designs from the drawing board to the store shelf quickly. This may explain the company’s robust growth. There are some 760 Uniqlo stores throughout Japan, China, South Korea, the U.K. and the U.S. The company opened its first U.S. store in September 2005 and now has five here.



Winner: WineStyles
CEO: Robert Spuck
What we do: Make buying wine fun, not scary
Where we do it: Spaces measuring between 1,200 and 1,800 square feet, mostly in open-air centers

Buying wine scares the daylights out of many people, but it need not, says WineStyles COO Bob Florio. To make the process less intimidating, the chain breaks the roughly 150 wines it carries down into eight easy-to-understand categories: bold, bubbly, crisp, fruity, mellow, nectar, rich and silky. And customers can taste before they buy. The chain, founded in 2004, is expanding along with wine’s growing popularity in America. U.S. wine consumption grew from 466 million gallons in 1991 to 703 million gallons in 2005, according to the Wine Institute, an association of nearly 900 California wineries. That represents a sales increase over that time frame from $10.9 billion to $26 billion. To keep up with America’s growing fondness for the grape, WineStyles plans to have about 140 stores by the middle of this year, all but one of them being franchises. By the end of next year it plans to have 250 stores, says Bob Simpson, director of real estate, and by year-end 2010 it will be operating 400.

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