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Sign of The Times

The first New York Times Bookstore opened at Bluegrass Airport, Lexington, Ky., in October. The space offers access to The New York Times Web site, a plasma screen showing the Discovery Times Channel and New York Times-branded gifts, plus books from the New York Times’ best-seller list. More than 1 million passengers visit Bluegrass Airport each year. The store is operated by the Atlanta-based Paradies Shops, which controls about 350 shops in 61 airports in Canada and the U.S. A licensing deal between Paradies and the Times calls for the opening of several more North American outlets, though at press time Paradies would not say how many of the stores it will roll out.

 

Big boxes dig for their own data

“The data that brokers and developers provide us is credible, but not always relevant to us as a retailer,” said Lorin Gates, director of real estate research for PetsMart at ICSC’s annual Research Conference, in San Francisco. “They’ll tell us a Publix across the street is doing $25 million in sales, but that’s not relevant to our business.” Instead, PetsMart and other big boxes are relying more on in-house research and technology to make site-selection decisions, executives said. “Before store 250, site selection was broker-driven,” said Michael Makinen, a vice president at Linens ’n Things. “Now we’re becoming more research-driven.” Executives said the increased user-friendliness of such mapping technology as GIS (geographic information systems) is helping drive the trend.

 

Loyalty program

How can a retailer expect consumers to buy its products when its own employees shop elsewhere? That’s the issue facing executives at Sears Holdings Corp. and U.K. hypermarket chain Asda, a unit of Wal-Mart Stores. In October Sears chief Aylwin Lewis sent a memo to employees instructing them not to bring competitors’ shopping bags onto Sears property. Shortly after, the company issued an edict requiring store employees to wear only Sears apparel when on the clock. Meanwhile, Asda CEO Andy Bond ordered an internal investigation into why 50,000 of his staff members decline to do their weekly shopping at the company’s stores.

 

 

If it plays in Albany

Forget Peoria. Albany is the U.S. city most representative of the nation’s population and is therefore the best place for retailers and consumer products makers to test new ideas, according to a survey conducted by data firm Acxiom Corp. The firm bases its ranking on age, marital status, home ownership and income data. “Albany has almost the same proportion of consumers as is found in the nation as a whole — from people just leaving home or school, buying a home, raising kids, approaching retirement, launching the kids out of the house, to being fully retired,” said Acxiom researcher Tiffany Weatherly, in a press release. Birmingham, Ala., Nashville, Tenn., and Wichita, Kan., are other ideal test markets, according to the ranking. Which U.S. city is least representative of the country’s population? Big surprise: Acxiom says it’s New York City. Peoria, Ill., the nation’s legendary “test” city, ranked 37th on the list of 150 cities.

 

 

Chic cruiser

CB Richard Ellis is pairing up with cruise ship operator Orphalese Global Strategies to create the world’s first floating luxury shopping mall. Called The Orphalese, the high-end ship will set sail in 2008 with 200 permanent residences and 265 suites for cruise passengers and will spend an average of 200 days each year visiting tony ports of call around the world. For now, CB Richard Ellis reps are busy marketing the ship’s 80,000 square feet of retail space to boutiques, restaurants, spas and entertainment venues. “The level of retailers and international brands will be befitting of the luxury image of The Orphalese and its clientele,” said James de Winter, director of retail services at CB Richard Ellis.

 

Deals for dummies

Three magic phrases that can successfully close a deal are “I don’t know,” “I don’t understand” and “Help me,” famed negotiator Herb Cohen told attendees at ICSC’s Southeast Conference, in Atlanta, in October. “Dumb is better. Make the other side feel superior. Don’t dress for success,” said Cohen, who has negotiated hostile takeovers and handled hostage situations for a variety of corporations and governments. “Start with pleasantries. Move to the small stuff and save zero-sum issues for last,” he advised aspiring deal makers. “The more energy you make the other side expend toward a goal, the more desirable that goal becomes. Instead of $1, make it four quarters.” The only way to close a deal on your terms is to negotiate on behalf of yourself, not your company, he said. “Convey to the other side that you care about this deal — but not that much.”

 

Build it yourself

Having an in-house general contractor helps bring in new tenants, Simon Property Group senior leasing representative William R. Sullivan told attendees at ICSC’s Southeast Conference, in Atlanta, in October. At its Phipps Plaza mall in Atlanta, Simon has boosted sales from $300 per square foot to $700 by turning over tenants since it acquired the property in 1999, Sullivan said. Only five of the center’s original tenants remain. How did Simon do it? Said Sullivan, “We took the tenants’ plans and bid against their general contractors to be able to build out the spaces at a cheaper cost.”

 

Tough on tourism

Homeland security rules are keeping international visitors out of the U.S. and hurting the tourism industry, observers say. One is a planned change in the Visa Waiver Program that would require travelers from 27 nations to secure visas before vacationing in the U.S. Another is the Western Hemisphere Travel Initiative, which will require passports or other accepted documents for all travel to and from the Caribbean, Bermuda, Central and South America and, eventually, Mexico and Canada. These initiatives are prompting many international tourists to choose other destinations, such as China and Europe, for their vacations, says Diane DeRose, vice president of marketing for the San Francisco Convention and Visitors Bureau. “We need to get information out to these people to let them know it’s not as difficult to get into the U.S. as it seems,” DeRose said. In the meantime, executives from the Travel Industry Association of America are lobbying government leaders to ease the planned restrictions. Nearly 14 million visitors entered the U.S. from a Visa Waiver Program country in 2004. International visitors spent $93.7 billion traveling in the U.S. in 2004, including international passenger fares, according to TIAA.

 

Freshening up the food court

Why have a food court when you can create a fresh-food emporium? Developers Forest City Enterprises and Westfield Group plan to add The Food Emporium to their redevelopment of the Westfield San Francisco Shopping Center, to be completed next September. The 30,000-square-foot space will resemble the food hall at Harrod’s in London. Meanwhile, Atco Properties & Management will include the 20,000-square-foot Market at Atlas Park at its 300,000-square-foot The Shops at Atlas Park in Glendale, N.Y. In a restored industrial building, the market will feature purveyors of a cornucopia of other fresh ingredients for home or restaurant cooking. The center opens in April.

 

 

Big-box bedfellows

Will PetsMart lease that space opposite competitor Petco? You bet. “We don’t shy away from anyone,” said Lorin Gates, director of real estate research for PetsMart at ICSC’s annual Research Conference, in San Francisco. “In fact, we’d like to shove our stores down their throat, unless they have us beat out on convenience.” If PetsMart can’t outposition rivals by being closer to target demographics, it will compete head-to-head with them, he says. “We don’t even mind being a quarter of a mile further down the road, but a mile or two is the cutoff.” Kevin Day, vice president of market research for Big Lots, agrees. “Wal-Mart is one of our biggest competitors, but also our biggest landlord,” he said, pointing out that Big Lots operates 40 stores on sites where Wal-Mart shut down to open a larger unit next door. Many big boxes don’t even mind sharing the same center with a competitor, says Michael Makinen, a vice president at Linens ’n Things. “A lot of our guests like to comparison shop, and if the competition is across the parking lot rather than across town, we feel like we’ll win.”

 

1031s get guidelines

The Federation of Exchange Accommodators (FEA), the trade association for 1031 exchange professionals, is working with Congress to create federal regulations and standards to fight fraud and tax evasion. The FEA wants qualified intermediaries to be registered with the Internal Revenue Service, part of whose job will be to help the agency verify that deals are in full compliance with 1031 exchange rules. The FEA says it is also developing a professional certification program to set performance standards for all qualified intermediaries and to acknowledge the top professionals in the business.

 

 

Name that concept

U.S. landlords will want to know Martin, Osa and Neda. No, they’re not leasing reps for Gap Inc., they’re the unusual set of names chosen by American Eagle Outfitters and Bebe Stores to brand their fledgling mall-based chains. American Eagle’s Martin + Osa will target men and women between 25 and 40 and plans to open stores next fall in unspecified locations. The concept could have as many as 300 stores and post sales of $1 billion within a decade, the company says. The chain is named for a Kansas couple who were photographers and naturalists in the early 20th century. Neda by Bebe, an accessories-only offshoot of the sexy Bebe brand, has one unit open at Lenox Square, in Atlanta. “The inspiration for the name of the new concept is Neda Mashouf, our vice chairman, who is, and has been, our muse for over 20 years,” said Bebe Stores CEO Greg Scott in a press release. A second store will open this spring, and Bebe will monitor results before rolling out the concept.

 

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