Malls investing to lure target demographics

WINDOW SHOPPING: Pottery Barn exited Providence Place mall, choosing Cranston’s Garden City Center for its new Rhode Island home. / PBN PHOTO/RUPERT WHITELEY
WINDOW SHOPPING: Pottery Barn exited Providence Place mall, choosing Cranston’s Garden City Center for its new Rhode Island home. / PBN PHOTO/RUPERT WHITELEY

Change is afoot at Providence-area shopping malls.
Even as the Internet reshapes the retail industry around them, several of the region’s most prominent shopping hubs are experiencing the most significant new investment and store realignments in years.
On Route 2, the Ocean State’s suburban retail spine, a Concord, Mass., developer is planning to resuscitate the shuttered Rhode Island Mall, while around the corner the Warwick Mall is celebrating new anchor stores and Garden City Center in Cranston continues an evolution toward an upscale “lifestyle center.”
At the Providence Place mall, the loss of some higher-end, home-furnishings stores is moving the complex toward a younger, more urban demographic.
All the while across Rhode Island and Massachusetts, traditional strip malls grapple with the continued shrinkage of big-box retailers.
“Each one of these different kinds of retail center is going for [its] own demographic and target market,” said Melanie St. Jean, a professor of marketing in Johnson & Wales University’s College of Business about the new round of local mall repositioning. “I would say the ones that are really trailing behind are the strip shopping centers. The upkeep is hard and appearance-wise they are just not that appealing.”
Since the popularization of the indoor shopping mall in the latter half of the 20th century, the most significant trend in suburban retail has been the advent of the “lifestyle center,” a hybrid of the indoor mall, outdoor strip mall and pre-war Main Street village. Lifestyle centers are outdoors and car-centric, but face inward instead of out at a large roadway and include sidewalks and parking in front of storefronts instead of a single lot.
In Rhode Island, examples include South County Commons in South Kingstown and Garden City Center in Cranston, which was built in 1947, long before the term was coined, but with characteristics that would come back into vogue 50 years later.
Mansfield Crossing in Mansfield has lifestyle-center elements, but a traditional shopping plaza reliance on big boxes such as the defunct Borders, which has not been replaced, and Best Buy.
“Prior to the lifestyle centers coming into fruition, the mall was really the gathering place to eat and shop, but then the demographics shifted and the lifestyle center was a more relaxed setting for a family oriented shopper who didn’t want to go into the city,” St. Jean said. “Stores that serve a more mature client realized in the city they were not faring as well and said we can do the same business in the lifestyle center with a bigger building and lower rent.” In 2010, The Wilder Cos., the Boston-based property-management firm that runs Garden City, began a series of upgrades to the 500,000-square-foot complex to make it attractive to the older, more affluent clientele typically targeted by lifestyle centers.
That’s included breaking down some of the larger spaces into smaller ones for specialty retailers, a strategy at least partially prompted by recession-era bankruptcies that included the Providence Watch Hospital and big-boxes Circuit City, Borders and Linens N Things. Large outdoor clothing and equipment chain Eastern Mountain Sports also left.
In their place, Wilder has bet on up-market home furnishings, bringing in Pottery Barn, which left Providence Place, and expanding its Williams Sonoma store.
It’s also adding smaller stores focused on the same demographic, including Anthropologie (women’s clothes and housewear), Ann Taylor (women’s clothes), Lululemon (yoga gear), Clark’s (leather shoes), Clog’s by Alexander’s (shoes), Edible Arrangements (fruit baskets) and Mod Mama (baby clothes.)
“We are going after a certain customer and going after a certain experience, which is being outdoors and having good, fast-casual dining,” said Andy LaGrega, principal at The Wilder Cos. “Lifestyle centers provide the convenience to working moms and soccer moms alike.”
To the south in Warwick, the new owners of the Rhode Island Mall are going the opposite route and consolidating the small shop spaces inside the mall into larger units to attract two or three larger stores.
Since April 2011, the interior section of the mall has been closed with anchor-stores Sears, Kohl’s and Walmart operating independently.
“The basic problem the Rhode Island Mall has had is you have two malls side by side and the Warwick Mall has been widely successful with small shops and anchors, while the Rhode Island Mall’s small shops were in decline,” said Adam Winstanley, founder of Winstanley Enterprises of Concord, Mass., which along with a New York private-equity firm bought the Rhode Island Mall last year for $38 million. “My hunch is the market is strong enough to support two, I just think our mall needs to be in a new configuration,” Winstanley said. “I want to stay away from competing with the smaller tenants at the Warwick Mall and attract larger tenants that will bring traffic.”In the search for the first new large tenant, Winstanley said he is down to two candidates, of which only one will be chosen, probably in the next 120 days. Variables include whether new tenants will use both levels of the two-floor mall, a single level or a combination.
On the broader retail real estate market, Winstanley said the trend of consolidation and shrinking store footprints will continue, with the giant regional, 1-million-plus-square-foot malls coming out the best.
Next door, the Warwick Mall, also severely damaged by the 2010 floods, added a large Jordan’s Furniture store, complete with laser-water theater, at the end of 2011, and a Nordstrom rack outlet last fall.
“These are regional draws because there is not a Jordan’s [or a] Nordstrom just anyplace,” said Warwick Mall co-managing partner Aram Garabedian. “These are popular stores that draw a broad base of customers from a large area.”
While the Providence Place mall may have lost home furnishings to the suburbs, it has replaced them with several new stores that appeal to young people, such as Vans (skateboard clothes), True Religion (jeans), and Athleta (woman’s sportswear).
St. Jean of Johnson & Wales said what’s happening in the Providence market fits the national retail pattern of city malls going younger and trendier, lifestyle centers going older and more affluent, traditional suburban malls targeting large discount stores and strip malls shrinking.
Even in the shifting retail climate, each of the first three kinds of properties should be alright, St. Jean said, although the lifestyle centers may do the best in the near future.
“The Providence Place mall, if they maintain the stores that hit that target market, will do fine,” St. Jean said. “But the one I have seen really come up is the lifestyle center and you are going to see more of them popping up.” •

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