Malls adapt to changing retail landscape

SCRANTON - In the midst of a deep economic recession, few businesses have had to adapt and change their strategies more than retail shopping malls. With many consumers cutting back on retail spending, malls have had to be more creative than ever to attract and keep both customers and tenant stores and businesses.

Both Lackawanna County malls - the Viewmont Mall in Dickson City and The Mall at Steamtown in Scranton - have been challenged by the recession and have succeeded to varying degrees.

Viewmont Mall Marketing Director Holly Jones said the facility has enjoyed attracting new retailers while maintaining current ones. Since July, the mall has seen C.J. Banks and Lane Bryant leave the landscape. However, those stores were replaced by new shops from Rue 29 and Body Central later in the month. A third store, Bolton’s, was replaced by another store, Strawberry, which is operated by the same company as its predecessor.

Jones said that the occupancy rate for the Viewmont Mall has remained above 90% in recent years. A check of the latest supplemental financial and operating information report for the Pennsylvania Real Estate Investment Trust, which owns the mall, puts the mall’s occupancy rate as of June 30, 2010 at 97.8%, down just -0.1% from the same time last year.

“To be honest, the recession has not had a great impact on us,” Jones said of her facility. “Our company’s leasing department has done a fantastic job of bringing in new businesses.”

Jones also chalked up some of her mall’s success to longevity, as the facility has been open since 1969. PREIT has operated the mall since 1994 when it replaced previous owner Crown American. Founded in 1960, PREIT is a publicly-traded company that owns 54 retail properties across the United States. She also said that being surrounded by other retailers and restaurants has played a large part in bringing customers back.

“We are located in the hub of the area’s retail center, and things like that help make this a more attractive place to shop,” Jones said. “The new movie theater is a tremendous addition for .

Jones cites the success of special offers like the mall’s back-to-school promotion. Started on July 30, shoppers could get a gift which included free back-to-school supplies with $75 or more in purchases at mall retailers. Viewmont also offered the chance for other prizes including an iPod touch.

“Last year we gave away 432 packs of supplies,” Jones said. “This year we gave out 576 packs, and ran out far earlier than we had planned on!

“We try to focus on promotions that add value to the shopping experience. We know people are appreciative of value.”

After opening in 1993, The Mall at Steamtown was seen as a gleaming new addition to Scranton’s downtown area that would attract customers for years to come. While the facility has seen its share of retailers leave in recent months and years, mall General Manager James Walsh has remained optimistic in finding new ways to combat the downward trends that have accompanied the recent recession.

“In the current economic climate, consumers are not spending money freely, and that makes an impact on our businesses,” Walsh . “There is a tremendous amount of capital that is sitting on the sidelines.”

Within the last year, retailers such as Eddie Bauer and The Ground Round restaurant - both of which were among the mall’s original tenants - have left the mall, creating empty storefronts and disappointing mall customers. Such closings have helped keep the mall’s occupancy rate at 76%, which Walsh says has been consistent since the departure of anchor store Montgomery Ward in late 1996. The Bon-Ton filled that location in 1998.

In addition, Walsh says the addition of the Shoppes at Montage, a self-described “lifestyle center” in Moosic, has saturated the market with retail space that is detrimental to the success of retail business in a market with Scranton’s demographics.

“The addition of the Shoppes has helped flatten the market, because now you have triple the number of some retailers in one demographic area that can’t handle them all,” Walsh said of the competition. “Our revenues here have stabilized. However, we are not where we were at in the fall of 2007- the incipiency of the economic tsunami.”

In place of the lost stores have come several local retailers, such as Cronin’s Irish Cottage, as well as the relocation of the Scranton Single Tax Office to the mall’s second floor. Walsh was also quick to highlight the mall’s three-year old partnership with Citadel Broadcasting, which has seen entertainers such as Justin Beiber, Adam Lambert and Kris Allen make appearances at the mall within the last year.

“Our Head of New Business Development and Alternative Revenue, Amy Zellers, has been tremendously beneficial in attracting local businesses and kiosks to the mall,” Walsh added. “The NBC kiosk on the first floor has been a tremendous success. That was one of the first such kiosks opened outside of New York City, and NBC made arrangements with it’s operators to keep it open here beyond it’s projected date.”

Officials with The Mall at Steamtown in recently announced that a Hurricane Grill & Wings restaurant will come to the former Ground Round location.

The Florida-based chain currently operates 52 restaurants nationwide. The nearest existing location is in Port Jefferson, N.Y.

“We had a developer with several other stores who was interested in bringing a restaurant to this location,” Walsh said. “We are on track for mid-October, but there are several factors that can change that, including the application for a liquor license.”

The Mall at Steamtown is owned by Steamtown Mall Partners, LP, while being operated by Prizm Asset Management Company. Headed by President Al Boscov, the company also operates the Oppenheim and Samter Buildings in Scranton, as well as the Scranton Enterprise Center on Lackawanna Avenue.

Other retail properties operated by the company include the Lebanon Valley Mall in Lebanon and the Reading Mall in Reading.

In addition to the celebrity appearances, Walsh is quick to highlight the work done by the mall in the local community, including partnering with local police for National Night Out and working with the Leukemia and Lymphoma Society to raise more than $330,000 in recent years. He also added that the mall is in discussion with “a handful of other retailers” about new development.

“We continue to do our best for the community, and to make us stand out to our customers,” Walsh said. “We will keep pursuing new opportunities as they develop.”

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