DeSoto Square mall tackles economic crunch (UPDATED: Dillard's confirms it will close local store)

Mall retailers struggling; task force seeking answers

gagostin@bradenton.comJuly 23, 2009 

Updated, 2:10 p.m. A Dillard's spokeswoman today confirmed that it will close its stores at DeSoto Square mall and Sarasota Square Mall.

BRADENTON — Pravin Chatani, co-owner of Zodiac in the DeSoto Square mall, says sales just aren’t what they were when his father first opened the store in 1979.

“We’ve seen a dramatic difference since then,” Chatani said. “The clientele we used to see and need just don’t come to the mall anymore.”

So, Chatani says, Zodiac will close its doors in January when its lease expires. That will make Zodiac the 15th retailer to exit DeSoto Square mall since 2008.

But DeSoto Square mall still has 87 stores and shops, of which 62 are retail, 10 are eateries and 15 are kiosks.

While economic conditions have left the mall with 14 vacancies since 2008, the mall’s occupancy rate still makes DeSoto Square mall, which is about 634,000 square feet, a viable shopping center, according to the International Council of Shopping Centers.

“Malls don’t just close down — it really takes a lot for a mall to close,” said Erin Hershkowitz, spokeswoman for the International Council of Shopping Centers. “There’s going to have to be a great deal of vacancy. It’s got to be about 50 percent vacant.”

Still, the economy has been tough on the retail industry these days.

As a result, malls nationwide are feeling the pinch as they tend to carry a high concentration of chain stores and apparel shops, both of which are seeing significant productivity declines.

Sales among non-anchor mall tenants nationwide fell by 11.3 percent in March 2009 from the same month in 2008, the latest figures available according to the International Council of Shopping Centers.

Apparel sales at malls declined 5.8 percent in March 2009 and retail chain stores such as JCPenney and Dillard’s saw a 5.1 percent decline in June 2009 over June 2008.

“Malls are feeling the crunch of the recession as consumer spending dials back,” said John Challenger, chief executive officer of the outplacement firm Challenger, Gray & Christmas, which monitors the retail industry. “Malls are facing tough revenues as retailers cut stores.”

When the DeSoto Square mall opened in August 1973, there were 80 tenants including three anchors: Sears, JCPenney and Maas Brothers, according to Bradenton Herald archives. An estimated 10,000 shoppers turned out for the mall’s grand opening in which 37 stores were open. Forty-three shops and stores had yet to complete stocking shelves with merchandise.

Today, the mall’s operators aren’t taking bad news for granted. They have formed a community task force to work on bringing business back.

Jeni Wilson, mall manager for DeSoto Square, said the mall has partnered with the Manatee Chamber of Commerce and the Economic Development Council in an effort to draw more visitors and retailers to the mall.

“The task force’s sole purpose is about revitalization,” Wilson said. “It’s not just about revitalization of the mall but the surrounding area. My hopes are the revitalization efforts will make the mall and the surrounding area the main shopping destination of west Bradenton.”

Bob Bartz, president of the chamber, said the task force has made some immediate suggestions for improvements that are relatively inexpensive. They include brighter lights in the parking lot, painting the entrance markers, sprucing up landscaping and adding directional signage, especially at the main entrance.

The mall needs to be more proactive in having community events there and letting the public know to build foot traffic, Bartz said.

“The owners of the mall need to make some improvements or I’m not sure how successful it will be,” he said of the task force’s work.

The two major economic factors impacting malls are unemployment and the housing market.

“If a mall was struggling prior to the recession, they are probably feeling certainly more troubles now,” said Hershkowitz, with the International Council of Shopping Centers.

The store closures at DeSoto Square started in January with Old Navy, Lady Foot Locker, Waldenbooks, Gordon’s Jewelers, Boater’s World, Hallmark and Allsports 24/7 closing in the first half of the year.

Wilson said the mall is talking with several tenants to fill the vacancies, but declined to disclose details until contracts are in place.

“We’re definitely working on some new tenants for our mall,” she said.

But several retailers at the mall say that Dillard’s, one of the mall’s four anchors, is closing, although company officials won’t confirm it.

“Dillard’s is definitely leaving,” Chatani said.

Wadai Abraham, owner of Street Scenes, an apparel shop located across from Dillard’s, said he was told by Dillard’s employees that the department store will close later this year.

“Their store’s closing but not because of the mall itself here, that was a corporate decision,” Abraham said.

Julie Bull, director of investor relations for Dillard’s, declined to comment on Dillard’s status at DeSoto Square mall.

“We haven’t made any announcements regarding DeSoto Square,” Bull said in an e-mail.

Wilson said she did not have information regarding Dillard’s status at the mall.

It is unclear whether Macy’s and JCPenney have renewed leases with DeSoto Square. Media officials for both department stores said they do not discuss lease terms publicly due to corporate policy.

According to a financial report Dillard’s filed with the U.S. Securities and Exchange Commission in May, the company said it has identified at least four locations for closure this year.

The department store has scaled back inventory and put a majority of merchandise on clearance with discounts up to 70 percent.

Inventory was noticeably scaled back on the second floor this week, where several wall displays at the back of the women’s section were empty. In addition, several jewelry and perfume cases on the main floor were also empty.

“When they leave, of course, it will be a big impact because I’m on that wing,” said Abraham of Street Scenes. “It will mean less mall traffic.”

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