‘Lifestyle’ centers to push LR retail horizon
Posted on Sunday, April 20, 2008
With five new “lifestyle” centers opening in a relatively short amount of time, there has been plenty of competition for new retailers in Little Rock.
In addition, with retailers cutting back on expansion because of the slackening economy, it’s getting more difficult to nail down stores and restaurants new to the market, developers said.
“It’s affected us,” said Dave Claflin, spokesman for RED Development, which is constructing the Promenade at Chenal in west Little Rock. “I don’t know anybody who’s not affected.”
The shopping centers, each in different phases of development, are still materializing, if a little slower than expected. The centers combined are bringing more than 2 million square feet of retail, restaurant, entertainment, office and residential components to the city. Some retail and dining experiences are new to the market, with many familiar names among the mix.
But all of the announcements for centers were made before retailers started shying away from opening new stores because of the nation’s struggle with tightening credit, high energy prices and mortgage woes.
Retailers have cut back this year, said Michael Niemira, chief economist and director of research for the International Council of Shopping Centers. According to some retail executives, the environment hasn’t been this tough in 30 years, he said.
“The lifestyle center expansion, which has been a strong part of the industry over the last five years, has seen much more difficulty in the last year,” he said. “There is a lot more caution,” on the retailers’ part.
Lifestyle centers are typically laid out with “traditional streetscapes,” incorporate retail and restaurant components, and usually cater to higher-income customers, according to the International Council of Shopping Centers’ definition.
Regional enclosed malls, such as McCain Mall in North Little Rock and Little Rock’s Park Plaza, are seldom built these days, according to the council. Around the nation, many of them have closed, including the recently razed University Mall in Little Rock.
Certain retailers are still expanding despite the economic slowdown, Niemira said. “It just depends on their perception of the market for them.” That means Little Rock might have a good chance of still bringing in an Apple store, but not as good for something like Urban Outfitters. “Apparel is a very, very tough environment right now,” Niemira added.
While Little Rock is still seeing retail growth, stores are slower to move and make decisions because of limited capital, said Hank Kelley, with Flake & Kelley Commercial. Kelley helps retailers find a home as part of the ChainLinks Retail Advisors network. On top of that, retailers are more apt to put a new store in a bigger metro area rather than a smaller one such as Little Rock, Kelley said.
“But with that being said, there are certain retailers and restaurants that are not here that are either trying to get here or are looking at location changes to improve what they’re doing,” he said.
Sean Glancy, president of Clary Development, said Shackleford Crossing hasn’t seen as much pullback as the centers trying to attract high-end stores.
“I think the higher end centers have slowed down a little bit,” Glancy said.
“The Abercrombies and the Victorias and Ann Taylors and all those types of tenants have actually slowed or stopped their growth at the moment because of the economy,” he said, referring to Abercrombie & Fitch and Victoria’s Secret. “But a lot of the other value and value-plus tenants seem to be prospering and moving forward.”
Restaurants are also slowing down, said Chuck Keller, a principal at Strode Property Co., which is developing Park Avenue and Midtowne Little Rock, at a meeting in February.
For example, he said Brinker International, the parent company of Chili’s Grill & Bar, Macaroni Grill and On the Border, has gone from building 125 restaurants a year to only 25. The slowing economy is forcing restaurants and retailers to get pickier about new locations, he said. Despite hesitance from those business categories, each center in Little Rock has gained ground this year.
PROMENADE UNFOLDING The 340, 000-square-foot, open-air Promenade at Chenal will have about 40 tenants, and about half that list has surfaced. Retailers have confirmed that Aeropostale, American Eagle Outfitters, Bath & Body Works, bebe, Chili’s, Claire’s, Coldwater Creek, Dickinson Theaters, DSW Shoes, Limited Too, J. Crew, J. Jill, Kay Jewelers, Select Comfort, Talbots, and Victoria’s Secret are coming.
In addition, plumbing permits have been filed for Portrait Innovations, Ann Taylor Loft, Lids, Finish Line, Journey’s, Mimi Maternity, White House / Black Market and the long-awaited Apple store. White House / Black Market has confirmed it’s in negotiations but has not yet solidified a lease to locate at the center, White House / Black Market spokesman Jessica Wells said. Apple and Dick’s Sporting Goods, another store rumored for the center, don’t discuss stores before they open, spokesmen said.
“It’s not 100 percent leased, but we have been having good luck with tenants,” said Claflin, the RED Development spokesman.
Stores will start opening Memorial Day and continue throughout the summer, with a grand opening expected in October, Claflin said.
“We are working hard to differentiate the Promenade at Chenal in the marketplace,” he said. “Obviously, the tenants have to want to be here.”
One unique store will be the state’s first J. Crew, projected to open Aug. 28, spokesman Margot Fooshee said. DSW Shoes spokesman Debbi Carpenter said the state’s first store opening has been pushed back to the end of August.
There will be some tenants new to the market, Claflin said. “But a lot of the retailers that do well there already have stores in the Little Rock area.”
Despite rumors that Anthropologie or Urban Outfitters might be making an Arkansas debut at Promenade, Sarah Goodstein — a spokesman for both retailers — said there’s nothing on the store schedule in Arkansas for the next two years.
Sephora, a cosmetics store also rumored for the development, said it has been looking at locating in Little Rock.
“Little Rock is a terrific market and certainly one that we are considering, but at this time, we have no specific location identified,” said Celia Wing, senior vice president of real estate, in a prepared statement. Sephora has one store in Northwest Arkansas. Anna-Marie Zazzero, spokesman for OSI Restaurant Partners, parent company of Carrabba’s Italian Grill, said the company hasn’t finalized any plans for a Little Rock location.
LOCAL FLAIR In the meantime, more local retailers are making the move to the 300, 000-square-foot Pleasant Ridge Town Center on Cantrell Road. Forsythe’s Ladies’ Apparel, Kristin Todd Accessories and Solemates from Breckenridge Village Shopping Center, as well as Powder & Smoke from Pavilion in the Park will be making the move, said Lou Schickel of Schickel Development. Kitchenco, a store created by the owners of Sauce Co. in Little Rock’s Pulaski Heights neighborhood, will also be coming, as well as Solemate, a shoe store; and Faux Pas, a jewelry and accessory store. Understatement, a lingerie store, has recently made the move. Kristin Todd, owner of Forsythe’s and Kristin Todd, said she’s making the move because she loves the look of the center, the drive-up parking, the music and the feel. Plus, with Bonefish Grill, The Fresh Market and specialty stores nearby, it’s a great place for customers to spend the afternoon, she said.
“They’re all this boutique feel, they’re not chain stores,” she said. “That really made our final decision.” She said that chain stores aren’t very specialized. “And we think that today with the times and everything, that people, when they spend their money, they really want to have customer service, and that’s what we’re totally about,” she added.
Todd said both stores should be moved and open in Pleasant Ridge by May 5.
While the center lost restaurant Imagine, it will add the city’s first Panera Bread location, Schickel said. The cafe should open in August, he said, and it will include an “egg station,” one of the chain’s first, for breakfast. Renee Eifert, spokesman for the franchisee of Arkansas Panera Bread cafes, said that the corporate offices just opened up the Little Rock area for franchising. The franchisee has 28 stores in Missouri, Arkansas and Oklahoma, including locations in Bentonville, Fayetteville and Fort Smith. Schickel said he’s talking with a dozen possible restaurants to locate in the Imagine space, as well as another half dozen retailers to fill the remaining slots at the center. The Fresh Market and Belk, both anchoring the center, are proving attractive for tenants, he said, and it’s 87 percent leased. “Business is booming,” he added.
VALUE PLUS CENTER Shackleford Crossing is taking shape as the market’s new value center, said Glancy, the Clary Development president. Along with the alreadyopen Cracker Barrel, the almost 600, 000-square-foot center will add other popular restaurants, including a Texas Roadhouse and a Zaxby’s, Glancy said. Panera Bread is also a possibility. A person at Cheddar’s Casual Cafe headquarters who declined to give her name said there was something in the works, but nothing finalized.
Two hotels are coming to the center — expected to be a Marriott TownPlace Suites and a Comfort Suites, Glancy said.
Edwin Watts Golf recently signed on for an 11, 000-squarefoot space, and the center is in talks with a 50, 000-square-foot clothing and accessories junior anchor that would be new to the market, Glancy said, as well as a few smaller clothing stores.
Maurices, a women’s clothing store, has been confirmed for a Shackleford space, said Connie Graden, Maurices’ spokesman.
“We’ve been targeting, trying to bring in a lot of new restaurants and new tenants,” Glancy said. The former Comcast building has now been demolished and workers are flattening the hill it sat on to provide space for a Wal-Mart Supercenter. The process of building a new Comcast building just south of the old one took longer than expected, Glancy said, pushing the prospective opening date for Wal-Mart back from late this year to spring 2009. The developers will hopefully close the sale of the property to Wal-Mart in June, Glancy said, after which the company will begin construction. Many retailers are waiting to pin their opening to Wal-Mart’s, and he said he expects the center to be about 90 percent filled once the big retailer opens its doors. The first store to open was J. C. Penney, in October. “We’re going to start to see some openings start happening from July to October and then another big push come this [next ] spring,” Glancy said.
STRODE DEVELOPMENTS Another reason for the slowto-solidify tenant lists are the numerous shopping centers opening within a relatively short time frame, which means there’s a lot of competition in the market for the same stores. Added to the competition is the recently announced Park Avenue, going in where the nowdemolished University Mall was located. Nearby, the 130, 000-squarefoot Midtowne Little Rock center is nearly full, with The Container Store now open and the recent announcement of Cantina Laredo, an upscale Mexican restaurant.
Jim Strode, developer of both of those centers, said in a prepared statement to the Arkansas Democrat-Gazette: “Our plans for Park Avenue are on track, and we continue to attract the interest of first class retailers, just as we did with Midtowne Little Rock. Park Avenue’s central location in the midtown corridor has been important in gaining interest from national retailers and restaurant groups, and we look forward to revealing more of our plans in the near future.”
At a Feb. 29 meeting of the Midtown Redevelopment Advisory Board, Keller presented his company’s vision for Park Avenue to the committee. It will be mixed-use center, with three stories of residential space over a first story of retail and restaurants, along with medical office space. A movie theater and bookstore, as well as a big-box retailer — the center is in talks with Target — will be part of the 711, 000-square-foot center.
During a March 6 meeting to discuss preliminary plans for the development, suggestions from the city’s planning division included making entrances to the new development “more welcoming” and adding more big identifying signs near the road.
The Little Rock Planning Commission is scheduled to vote on whether to approve the plans for Park Avenue at its May 8 meeting. Keller has said that the developer group is on a tight timeline because Target typically only opens stores in March, July or October, at which time the other retail and restaurants are required to be in place.
As a result, Park Avenue is shooting for an October 2009 opening — an extremely tight turnaround considering the September 2007 purchase date, the time needed for demolition and environmental cleanup of University Mall, and then construction of the shopping center, Keller said.
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