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In the Zone

Glendale Galleria’s new addition caters to lucrative teen market

By Maura K. Ammenheuser

The Zone, on the upper level of Glendale Galleria, was created to target Generation Y.

Imagine the results if teen-agers designed malls.
The Glendale (Calif.) Galleria did exactly that. Using comments and sketches from 146 teens, they built The Zone, a 15,000-square-foot area reserved for merchants catering to the young.

The teens said they like trendy chain stores and one-of-a-kind boutiques, so The Zone, which opened this past July, includes Vans, a shoe, skating equipment and clothing store; Juxtapose, which sells apparel; No Fear, the sporting equipment and clothing merchant; Boarders Sports, featuring skating, snowboarding and surfing gear; and Premium and Varona’s Catwalk, both music and clothing merchants. The Zone is flanked by other retailers targeting similar customers.

“But we created more than just merchandise,’’ said Annette Bethers, senior marketing director for the center, which is owned by Newport Beach, Calif.-based Donahue Schriber. “We created an environment.’’

The kids like TV and barely know a world without computers, so The Zone boasts “Channel Z,’’ with features, sports footage and ads. At press time, Internet access in a special Net area was pending.

The Galleria also installed flooring, lighting and signage unique to The Zone to further set it apart from the rest of the 1.3 million-square-foot shopping center, anchored by Nordstrom, J.C. Penney, Macy’s, Mervyn’s and Robinsons-May.

It took $2.5 million and five months of construction to create The Zone, which opened July 14, on the mall’s top floor, where some leases had expired.

Sales reports were unavailable as of mid-September, but Cindy Chong, the center’s general manager, said she would like to see The Zone merchants do 20% to 25% better than the previous tenants’ sales. She didn’t specify dollar amounts but said the Galleria overall grosses $465 per square foot.

The Zone is meant for 8- to 18-year-olds — members of Generation Y who are coming of age in a prosperous, high-tech era and wielding considerable spending power.
It’s tough to pin their numbers down, as demographers variously describe Gen Y as those born since 1983 or those born between 1976 and 1994. The Galleria, in building The Zone, used statistics spotlighting the 60 million people now 10 to 24 years old.

Galleria officials say this generation spent about $100 billion last year and will continue to spend $90 billion to $150 billion annually. Other estimates of the group’s expenditures are even larger, ranging from $140 billion to $600 billion annually (see story, facing page). It’s also unclear how much of that is made by Gen Y with allowances or money earned from part-time jobs and how much is indirect — parents making kid-influenced purchases.
“Regardless, Gen Y could be the biggest consumers the planet has ever seen,’’ said Ken Gronbach, president of KGA Advertising, a Middletown, Conn., strategic planning and marketing firm.

“We’ve been predicting this would happen,’’ Gronbach added, referring to the creation of special mall sections for specific customers.

He had a warning, however. Teen-age crowds frighten older shoppers. The 40-year-old woman spending $500 in Nordstrom “doesn’t really want to deal with someone with a pierced tongue,’’ Gronbach said. So security may be an issue.

David Nye, cofounder of U30 Group, a Knoxville, Tenn.-based marketing company that uses panels of young people to give companies feedback about their products, agreed with that assessment.

“I think this is a smart idea as long as they can maintain the sense that anyone can go into or through the area without feeling uncomfortable,’’ he said.

The Zone is policed by security guards, Chong said, but they dress in polo shirts instead of button-down uniforms, a concession to teens who dislike traditional authority figures. “We wanted [The Zone] to be consumer-friendly and in this case, the consumer is a teen-ager,’’ she said.

Most tenants in and near The Zone say it’s a good retail concept.

“It has increased business,’’ said Katherine Dixon, assistant manager of Muscle Beach Lemonade, also in The Zone. Her sales have grown by roughly a couple hundred dollars daily since The Zone debuted, she said.

The nearby Hot Topic store “has been phenomenal since The Zone opened,’’ said Christine Thompson, marketing manager for the 260-unit, music-influenced apparel chain. The Galleria location is among its top 20 stores, she said, though she did not have sales figures to share.

“I’ve seen it pull a lot of traffic,’’ mostly 12- to 18-year-olds, said Peter Lang, owner of Premium, which previously had a temporary spot in the mall and opened in The Zone Sept. 9. Premium is a 1,000-square-foot shop featuring unsigned musicians’ recordings, but it also sells clothes and art. “It’s stuff you can’t find anywhere else,’’ Lang said. “If it does show up in another store, we drop it.’’

But not everybody is wowed by The Zone.

“I’d make more money if I sold at a swap meet,’’ said Cody Varona, owner of Varona’s Catwalk. “The third level is death row.’’

Varona wouldn’t reveal her sales grosses but said “they’re a half a percent of what I do in my first location,” a decade-old, 4,500-square-foot streetside shop.

No Fear hasn’t seen the traffic it expected in The Zone, either.

“It’s actually a horrible location,’’ said Sean Sadri, No Fear’s manager. A post blocks the view of his 4,000-square-foot store from the level below.

No Fear is making its internal sales quotas — this is the company’s fifth store — but he said he had expected to do twice as well at The Zone, noting that he’s worked for other retailers in the Galleria and they are “making beautiful money.’’ No Fear is pulling in about $1,000 daily, he said.

Sadri attributes the problem to being on the top level, not The Zone itself, but Varona complained about the atmosphere as much as the site. The Zone’s not the “edgy,’’ visually striking creation Galleria officials described when they approached her to open a store, she said. And rather than looking like a city street, as she expected, The Zone “looks like a mall ... I’m embarrassed to be there.’’

“Catwalk’s customers are 18- to 34-year-olds — hardcore clubgoers,’’ Varona said.

“You walk in, we dress you up from head to toe to go to the clubs. We don’t cater to 10-year-olds.’’

Bethers, the senior marketing director, said leasing agents clearly told Varona they were targeting a younger crowd but conceded that Catwalk and The Zone might not be right for each other.

“Unfortunately, Catwalk is a little more edgy than the other retailers in The Zone,’’ she said. The mall is trying to “finesse’’ things with Varona, Bethers said.
As of press time traffic counts were not available.

Bethers acknowledged that “during school hours, the Zone is quite calm and quiet, as it was expected to be. The Zone comes alive at four o’clock every day.’’

And while “upper levels are challenging,’’ Bethers said, she thinks Varona’s problems have more to do with school schedules than The Zone.

Bethers and Chong believe The Zone is not only a success in its own right, but propels young shoppers to other Gen Y-oriented shops in the Galleria, such as Forever 21, Skechers and Noah’s Ark. That’s partly due to ads broadcast on Channel Z and The Zone’s Web site, www.thezone-online.com.

“We wanted it to become a meeting place for Gen Y and a place they’d be comfortable in,’’ but also a way to boost business at related stores, Bethers said.

Creating that critical mass is good business, said Nye. “It makes a lot of sense to create an area that’s going to be attractive to kids. It breeds on itself. Where there are kids, kids want to go.’’