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Shopping Centers Today -> July 2003
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OLD TOWN, NEW SHOPS
Virginia’s Colonial Williamsburg and other historical sites provide fertile ground for retail ventures
BY IAN RITTER
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Virginia’s Colonial Williamsburg might rely on its yesteryear charm to bring people in, but it’s a modern day shopping center that helps pay the bills.
Colonial Williamsburg, a 301-acre site where costumed actors re-create historical life in and among the colonial city’s restored buildings, has accommodated since the early 1930s a 170,000-square-foot shopping center called Merchants Square a few blocks from the town center. National chains, including Barnes & Noble and Williams-Sonoma, are scattered among local crafts tenants selling art, clothing and glassware.
Now the Colonial Williamsburg Co., a for-profit subsidiary of the not-for-profit Colonial Williamsburg Foundation that runs the museum, is finishing up a 34,000-square-foot expansion scheduled to open in the fall. Incoming tenants include Chico’s and Talbots. Another, second-floor portion of the expansion will be dedicated to office space, though its size has yet to be determined.
“There was demand for [more space], not only from the customer side, but also from the businesses,” said Jim Bradley, the foundation’s public relations manager. “I can’t remember the last time we had a vacancy at Merchants Square, and I’ve been here 15 years.”
The open-air project, which Bradley describes as a lifestyle center, has achieved sales close to $600 per square foot, the foundation says. (Sales per square foot at U.S. malls last year averaged $330, according to ICSC.) Foundation officials would not disclose what they are spending on the Merchants Square expansion.
These numbers do not surprise retail development consultant Ian Thomas, chairman of Vancouver, British Columbia-based Thomas Consultants. Museums offer potentially lucrative locations for retail, he said, adding that he expects to see more of them bring in stores in the future.
“When you’ve got a captive market, there’s a retailing opportunity,” he said, pointing out that most markets are already crowded with traditional shopping centers. “It’s all about that niche opportunity.”
At most museums the only retail element is an in-house gift shop. Even so, Merchants Square isn’t the only museum to bring outside retailers onto the grounds. The 76,424-square-foot, underground Carrousel du Louvre at the Louvre art museum in Paris opened in 1993 and features a Virgin Megastore and several upscale boutiques. And though Washington, D.C.’s Smithsonian Institute has no outside retailers per se, it does have a food court in its National Air and Space Museum, occupied by Boston Market, McDonald’s and other restaurant chains.
The Smithsonian, which now runs more than a dozen museums, brought the chain restaurants to Air and Space in May 2002 and says early results are promising.
“It offers us the opportunity to capture more museum visitors,” said Michael Altman, chief marketing officer of Smithsonian Business Ventures’ retail division.
Though the institute has not collected exact figures for the food court’s sales, Altman says they exceed those of the former traditional museum cafeteria. Currently, the Smithsonian has no plans to introduce any outside nonfood retailers to complement its museum stores, because its mission thus far has been to sell only museum-related products, he says. But that could change, he notes, if the Smithsonian were to find an outside retailer that would sell items relevant to its museums.
One challenge for most museums is the lack of space, says Edward Able, president and CEO of the Washington, D.C.-based American Association of Museums.
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| Talbots will join the mix of national chains and local artisans when the Merchants Square expansion (above) opens. |
“The Williamsburg situation is absolutely unique,” Able said. “Most museums don’t have any space to lease to anyone. We’re very limited in what we do. Most of the assets are used by the institution and its mission.”
Colonial Williamsburg is one massive, historical anchor for Merchants Square. Last year the foundation sold 843,000 tickets, including family packages and single and extended passes, amounting to some 3.5 million visitors. “We’re not saying that all of those people end up in Merchants Square,” Bradley said. “But a substantial portion of those people do.”
The museum’s high traffic count is what attracted Chico’s, which opened its Merchants Square store in May, says Brett Robinson, the chain’s director of real estate.
“We did some independent checking with the [current] retailers, and they said they were doing extremely well,” Robinson said. “I think we’re going to be extremely successful there.”
Robinson would not disclose the lease terms, but he did say they are similar to those the chain has reached with traditional community center landlords.
“It was the same process,” he said. “They’re a very professional group in their understanding of retail.”
Merchants Square has been around for a while. Philanthropist John D. Rockefeller and his co-investors founded the museum in 1926 when they bought the city for the purpose of preserving its historic roots. As part of the process, they moved the town’s central business district a few blocks west, to a group of buildings near the neighboring College of William and Mary. They established a retail district in 1932, calling it Merchants Square. Consultant Thomas says museums that don’t have such retail should reconsider.
“I think it’s in their very best interests to contemplate this additional revenue stream,” he said. “It provides a windfall to them.”
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