Retail Concepts Shop Talk July 2008

Greetings!

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A Walk Around a Lifestyle Center

Let's start with the term "Lifestyle Center". Ask the next ten average consumers what this is and we guarantee you will get ten answers that not only totally differ from each other, but have no common threads, words or connections. Their answers will illustrate little understanding of what the term means.

This misunderstanding is complicated by the fact that if you asked ten retail or commercial real estate professionals the same question, the answers would be equally as disconnected. Additionally, consider the huge differences between the properties that lay claim to the term. These "Lifestyle Centers" range from large to small. Many are upscale, but some are not. The one we visited today and will use as an example had many upscale shops, but also had a Rite Aid and a Kohl's. Many have trees, flowers and benches, but some don't. Some have themes and include entertainment, yet others aren't nearly as sophisticated.

Consider all these contradictions and it's no wonder why people don't have a clear definition of what this term really means. So you tell us....what is a "Lifestyle Center"?


The center visited today is known as one of the most successful examples of a so-called "lifestyle center" in the nation. Its success status is based on sales-per-square foot and the obscene rents the landlord has commanded in its few years of existence. There are a total of 78 stores. If you eliminate big boxes, restaurants, food stores & hair salons, there are about 55 "lifestyle shops" (we use the term with uncertainty as to what it means). 7 of these 55 are vacant, with no "coming soon" signs and no evidence of construction. Of the approximately 48 open for business, 25 had huge sale signs and, in fact, 18 had nothing but huge sale signs in their windows and storefronts. We are quite aware that business is tough in June of 2008, but we are also quite aware that saying exactly the same thing as everyone else is the retail equivalent of saying nothing at all.

Lululemon Athletica, REI, Apple, and a store called "In The Pink" were by far the busiest stores during a slow, hot, humid early summer afternoon. They had a few things in common:

  • No sale signs at all (REI had a few smaller ones, well inside the store, but none in the windows/storefront).
  • The stores featured their unique and interesting products with clear pride and quality information about features and benefits. A very novel idea seeing as we are in 2008.
  • They seemed to actually represent a 'lifestyle". In the Pink features the brand, Lilly Pulitzer, representing upscale, wealthy, Palm Beach-style looks. REI is outdoorsy, hiking, biking, etc. Lululemon Athletica is modern day yoga and women's fitness. Apple is just plain Apple (a lifestyle of its own), which, by the way, is now the single most successful store in recorded sales per square foot history.

Does anyone other than us remember when Ann Taylor stood for something? They were quality, wearable fashions for young, working women. They had distinctive looks and always delivered. None of that has seemed to hold true for at least ten years now.

Two of the vacancies are from the closing of Talbot's Kids and Talbot's Mens. We also remember when Talbot's stood for real, quality brands like Geiger boiled wool jackets, Sue Bristol Fair Isle sweaters, etc. Somewhere along the line some executive decided, "Let's just do our own label and make it cheaper overseas. Our customers will never know the difference and we can pocket all the mark-up!" Sorry, but it is evident that Talbot's customers do seem to know "phony classics' when they see them. So, now what do you do with your diluted brand and tumbling revenues. I guess selling junk as men and kid's classics was not the answer.

We go into Kohl's four or five times a year in our never ending quest to figure out why they exist. They are actually on store-wide sale it seems 364 days a year (we haven't checked, but we assume they are closed Christmas Day). Doesn't a sale lose its meaning when the merchandise never exists at full price? There used to be laws that tried to hold practices like that in check, but which is worse; Kohl's or the silly up and down pricing games that Macy's plays? Enough though about pricing, for this is material for another newsletter.

From the street, sidewalk, and parking lot, the only visible sign at Barnes and Nobles reads "OPEN". Don't they have anything better than that to tell us?

None of the national chains, i.e. Express, JoS. A Bank, Banana Republic, etc., showed any sign at all of adjusting to local situations, such as relocating window signs to deal with glare from the sun. About 20 stores could not be seen at all from more than 5 feet away, even though slight changes in color and location would have corrected the problem. Additionally, none of the stores did any reacting to all of the other stores having similar "Summer Sale" signs.

Of all the stores "shopped" today, if we exclude Apple to give others a fair chance, the most impressive by far (and the second busiest to Apple as well) was Lululemon Athletica. We admit, when they first opened we did not immediately "get" the store. It doesn't explain itself very well in a non-verbal sense, nor does it define itself in the way normal, well-run stores do. It seemed kind of all over the place design wise.

Well, it took us a little time, but we now get it and love it (as do a great number of consumers). It has redefined Yoga and made it current and local instead of 60's and Far Eastern. They have designed a store that works for its customers and merchandise. Their fixtures and selling floor adjust to accommodate workout sessions and activities of all kinds. It is truly an interactive store and also one with a clear strategy to merge into the communities where it does business. Its products are custom designed to be comfortable and effective in their uses, while attractive and colorful. It is like no other store (sound like Apple?), while at the same time it is the perfect store for these times and they have a natural home in "Lifestyle Centers"...whatever that may be...


Also see...

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  • "Too Many Malls, Too Few Tenants". Wall Street Journal. July 17, 2008
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