Orlando’s soon-to-be-completed The Mall at Millenia is a gamble that could cost its investors a bundle, said Britt Beemer, chairman of Charleston, S.C.-based America’s Research Group Ltd., at ICSC’s 2002 Florida Conference yesterday.
In a panel discussion titled "Regional Overview of Florida," Beemer questioned the long-term feasibility of the center, which features a tenant roster of upscale retailers such as Louis Vuitton, Cartier, Chanel, Gucci and Neiman-Marcus and is set to open this October.
"Orlando doesn’t have a big luxury shopper base," he said. "The market’s consumer has never been high end." According to Beemer, the development team of Taubman Centers and The Forbes Co. is banking on tourist dollars to help float The Mall at Millenia. The 1.2 million-sq.-ft. center will feature a foreign currency exchange where tourists can convert their pounds, euro, pesos and yen into U.S. dollars. An onsite, full-service U.S. post office will also allow shoppers to ship their purchases back to their homes.
But Beemer says the September 11 terrorist attacks have changed the game. "Tourists used to spend 26% of their vacation time shopping. But after 9/11 that’s down to 19%." Beemer says The Mall at Millenia will also have a tough time pulling tourists out of the grips of Mickey Mouse. "Disney used to cross-market with other Orlando venues," he said. "Now, Disney is fighting to keep customers at the park."
The Mall at Millenia has another fierce competitor to battle as well — Simon Property Group’s 2.4 million-sq.-ft. Florida Mall, which recently renovated and added new anchors Lord & Taylor and Nordstrom. The decidedly more middle-market Florida Mall felt the sting of declining tourism in 2002, with an 8% drop in sales, according to Deutsche Bank estimates. But it is still the market’s dominant fortress mall, a position The Mall at Millenia may be hard pressed to obtain.
Beemer’s advice to The Mall at Millenia’s management team: Take drastic measures to get consumers into the center. "Hire the Beach Boys to perform in the parking lot. Do whatever you have to do. The first 90 days of a center’s performance last seven years, so it’s important to make an impression early on. After 9/11, consumers are visiting fewer malls and driving less distance to shop. No mall can afford to be in second place these days."