Thursday, January 22, 2009

Country Club Plaza Mall, Heading Towards Disaster?

Country Club Plaza Mall, Sacramento's most vulnerable mall, has the highest vacancy rates (30.6%) than any other mall in the metro area.

But is the news all that bad?

The recently remodeled 600,000 sq. ft. shopping center has been finding its niche among power players in the area, including the Roseville Galleria and Arden Fair mall. Soon after the remodel of the mall, occupancy rates were at 51%. Currently, with 49 potential stores, 15 spaces are empty (in red above), which lowers the vacancy rate to 30.6%. Exterior pads were not considered in this statistic.

I'm examining this mall because it's home to the only Gottschalk's in the Sacramento region. The impact of Gottschalk's closing is purely speculative. However, Country Club Plaza is unique in its own rite. Very rarely do you see investors willing to pony up money for an enclosed mall this size.

We'll keep an eye on this mall to gauge the retail economic conditions in Sacramento.


Capitola Mall Holding Its Own

Another mall to keep an eye on is Capitola Mall in Capitola California.
This roughly 586,000 sq. ft. enclosed mall is a dominate player in the Santa Cruz region, but lost Mervyn's late last year. With the impending Gottschalk's failure, the mall will have lost two of its four anchor tenants.

The above image, taken today from Maerich's Web site, shows the mall with 96 potential stores. At this time, 12 space are unoccupied (in red), leaving a 12.5% vacancy rate. Anything to be concerned about at this time? Not so much.

We'll keep a close eye on this center for changes in occupancy.


Will Somersville Towne Center Survive?

Somersville Towne Center, a roughly 500,000 sq. ft. enclosed mall in Antioch California, is one of the Bay Area's most vulnerable malls. With the departure of Mervyn's late last year and possible closing of the Gottschalk's chain in 2009, the mall will have lost half its anchor tenants.

It's no secret that malls suffer after loosing an anchor. But loosing two anchors often signals the end of any shopping center. Remember San Mateo Fashion Island mall, which was demolished after loosing two of its four anchor tenants?

The above images, taken from Somersville Towne Center's current store directory, shows a total of 67 potential stores (exterior strip and interior mall). Currently, 13 space are unoccupied (in red), leaving a 19.4% vacancy rate.

We'll keep a close eye on this mall as an economic indicator of retailing in the Bay Area.


Friday, January 16, 2009

So Long Circuit City

It's official... Circuit City has filed in Bankruptcy Court to liquidate its assets. They hope to begin the liquidation on Saturday.

For some, this comes as no surprise. Circuit City has been on the long road to a slow death. In addition to a poor marketing positioning, Best Buy is just knocking the pants off these guys.

In November 2007, Circuit City laid off about 3,400 workers, then offered them to come back for a lower pay rate. What a great way to motivate your sales staff. It doesn't take a Business major to know that was a dirty move.

In 2008 Circuit City closed some of its stores in an attempt to "fix" some of its problems. However, management never came up with a viable marketing plan. It takes more than closing stores to fix what's broken.

So now we have just one electronics retailer... Best Buy. What's a monopoly to do?


Thursday, January 15, 2009

Innovative Marketing Means Free Imbibement for Men

My award for most innovative marketing scheme for 2008 goes to Reno's Meadowood Mall, which sought to entice male shoppers with its "Free Beer" campaign.

Yes, FREE beer... for one-night only (sorry folks, you already missed it; it was December 22, 2008).

Male shoppers, who have been unfairly stereotyped as selfish, are suddenly finding themselves with a reward for thinking of others.

According to Siobhan McAndrew (2008), men who register with guest services will receive a ticket for a free beer at Bully’s Sports Bar (in the mall), a coupon for free gift wrapping of purchases made at the mall, and a chance to win prizes, including a TV and gift certificates, from mall merchants.

The marketing manager was thinking ahead. Male shoppers needed to be present for the prize drawings that occurred at 8 P.M.

Weeks after the program expired, we are still waiting to hear if the marketing program worked, but I suspect it did.

In other news, female shoppers at Meadowood Mall are rewarded with free tap water, wrapping their own gifts, no prizes, and tired feet.


McAndrew, S. (2008, December 18). Meadowood Mall offering free beer for men on Monday night. Reno Gazette-Journal. Retrieved from

Wednesday, January 14, 2009

Retail Sales Down, But Not That Much

Okay, the U.S. Commerce Department released their adjusted retail sales numbers and retail sales were down 2.7% between November and December 2008.

Whew! That's not so bad. We all knew they weren't going to be up.

However, some retail experts are predicting 2009 to be even worse than 2008. Alas, the naysayers are more interesting to our news outlets.


Gottschalk's - A Goner?

Gottschalk's of Fresno filed for Chapter 11 bankruptcy protection Wednesday morning. The chain had put itself on the market in late 2006, but has not found any interested suitors.

Gottschalk's has stores at Antioch's Somersville Towne Center, Capitola's Capitola Mall, Carson City's Carson Mall, Modesto's Vintage Faire Mall, Sacramento's Country Club Plaza Mall, Santa Rosa's Coddingtown Mall, Stockton's Sherwood Mall, and Tracy's West Valley Mall. Both Capitola Mall and Somersville Towne Center just lost their fourth anchor, Mervyn's, last year.

As with many retailer bankruptcies, unprofitable stores are usually closed. If Gottschalk's was to close any of the above mall locations, we could easily see devastating results. Somersville Towne Center, Captiola Mall, Carson Mall, and Country Club Plaza Mall may all go under. Sherwood Mall and Coddingtown Mall would be seriously threatened. However, Vintage Faire Mall and West Valley Mall ought to be strong enough to survive.

Gottschalk's was forced out of its Danville Blackhawk Plaza location in 2006, which was its deepest penetration into the highly competitive Bay Area market.

Time will tell what Gottschalk's next move will be. Stay tuned for the latest


Sunday, January 04, 2009

Walnut Creek Residents: Biting The Hand That Feeds Them

The Neiman Marcus project in Walnut Creek's tony Broadway Plaza has been repealed by the city council.

The move came in response from Macerich, the plaza's owners, which came in response to 5,000 residents signing a petition to put a referendum on the ballot to cancel the project (Nardi, 2008, ¶ 3). Has Walnut Creek effectively jeopardized a potential tax bonanza and a dashed the hopes of local residents for a uber upscale department store that side of the bay?

But who is behind this move? No one seems to know and downtown merchants don't even care (Nardi, 2008, ¶ 6). But shouldn't we be concerned when no one takes responsibility for paying signature gatherers to rally voters?

The reasoning for the petition came under the guise of parking issues. But the parking situation only worsened when everyone else moved in after years of downtown redevelopment. Simply put, if Macerich expanded the mall and no one could get there, they'd be pretty motivated to remedy the problem on their own. Besides, how much traffic can Neiman Marcus create? With retailers begging for traffic, I'd figure the downtown merchants association would welcome deep-pocketed shoppers with open arms.

Macerich is expected to resubmit a new plan for the Neiman Marcus project. However, until that happens and with the current economic conditions, it just may not occur.


Nardi, E. (2008). Neiman Marcus project repealed. Oakland Tribune. Retrieved from;col1

Malls Have Gone Boring?

In one of those studies that begs the question, "who pays for these things?" the Wharton School of Business has found that malls are boring to shoppers.

Director of the study, Stephen Hoch, has determined that malls suffer from a "lack of discovery" (Philadelphia Business Journal, 2008, ¶ 4). Apparently, 35% of mall shoppers say "there was nothing new or unique in the mall" (Philadelphia Business Journal, 2008, ¶ 6).

I'm Not an Expert, But I Play One Online...

I love studies that confirm the seemingly obvious. How many malls have you been to that are exactly like the others? In my rating system for my BIGMallrat Malls of Northern California Web site, we have a rating scheme that considers uniqueness. It's simple. If every mall has The Gap, then it's not unique. If one mall has a Abercrombie & Fitch, but another does not, then that mall becomes unique. It's a stretch, but it works.

It's Not That Simple...

The situation may be more complex. Mall marketing managers have to determine a mall's differentiation and positioning. What the Wharton study has done is effectively determined that malls are not positioning themselves correctly. In fact, they have no differentiation whatsoever. The key for marketing managers is finding that differentiation, especially with the fierce competition of a down retail market. Mall anchors are few and far between, with mostly Macy's, JC Penney, and Sears being primary mall anchors. Dillard's is holding on, but not expanding. You probably can forget about Gottschalk's (regrettably). Kohl's doesn't prefer mall locations, either.

What us, as consumers, will inevitably find out is what mall marketing managers will do. Westfield seems to be the market leader, with the others either languishing or simply following the leader.

I'm hoping for the best.


Philadelphia Business Journal (2008). Here’s what’s the matter with malls today: They’ve become mundane. Retrieved January 4, 2009, from^1746434&ana=e_vert

Mervyn's - Gone But Not Forgotten

Mervyn's is gone... December 27th marked the day as Mervyn's last, closing all remaining stores that didn't close a month earlier from a previous round of store closings.

The final sales event was markedly mixed. Consumers reported that some prices were raised in order to present a 25% of markdown, in turn selling items higher than what Mervyn's originally had charged. Of course, the last 10 minutes of store closings was marked with 10 items for a dollar.

Not all hope is lost...

The San Francisco Business Times (December 12, 2008) reported that Kohl's and Forever 21 have acquired 12 former Mervyn's locations to expand their businesses. For local malls affected, Kohl's will replace Mervyn's at The Mall at Northgate in San Rafael, Southland Mall in Hayward, and Capitola Mall in Capitola (San Francisco Business Times). Forever 21 will be opening a super-sized store concept at the former Mervyn's at Northridge Mall in Salinas (San Francisco Business Times). That just leaves vacant anchor stores at Hillsdale Mall in San Mateo, Westfield Solano Mall in Fairfield, NewPark Mall in Newark, Somersville Towne Center in Antioch, and Princeton Plaza Mall in San Jose. Late in 2008, Mervyn's departed Alameda Towne Centre in Alameda, also to be replaced by Kohl's.

NewPark Mall expressed interest in replacing Mervyn's with a movie theatre and entertainment complex, but those plans have stalled with owner General Growth Properties verging on bankruptcy.

Malls with empty anchors often struggle. A recent visit to NewPark Mall showed the former Mervyn's end of the mall dying out. Westfield Solano Mall and Somersville Towne Center may also show struggles. Princeton Plaza Mall may have serious consequences since that was the tiny mall's only large anchor. Hillsdale Mall has other strong anchors and may not show much of a decline. The question remains, what can and will eventually replace these empty spaces? Not to mention, a glut of available retail with the departure of many Circuit City stores, all Linen's N Things, Kay Bee Toys, Crescent Jewellers, Whitehall Jewellers, and others, and we are looking at a bad mall year. However, these things are cyclical. What goes down, must eventually go up.


San Francisco Business Times (December 12, 2008). Kohl’s, Forever 21 acquire Mervyns locations, including Hayward store. Retrieved January 4, 2009, from