The months-long renovation of Century City's only shopping center has been an exercise in patience, with relocated stores, reduced parking, double-parked dump trucks and nonstop construction noise all cutting into the shopping experience. Overall mall sales are down because some customers have just given up.
Not much longer, though. The first phase of Westfield Group's transformation of its Westside mall will be almost finished next month with the opening of a second-floor dining terrace, a gussied up replacement of the center's tired-looking food court that will feature, among other things, indoor and outdoor seating and real silverware instead of the plastic stuff.
The following month, just in time for the holiday movie season, comes a 15-screen AMC theater with stadium seating, digital technology and surround sound that will replace a 14-screen lower-tech multiplex in another portion of the mall.
It's all part of what Sydney, Australia-based Westfield dubs a "hy-style" mall a hybrid of traditional and lifestyle shopping centers where department store anchors place second to entertainment venues, restaurants and specialty retailers. "It is something that we are doing to differentiate from our competitors, and it is something that we are looking at to roll out to the rest of our centers," said Paul Kurzawa, Westfield's vice president of management.
If all goes well at the newly christened Westfield Century City the name "Shoppingtown" has been dropped Westfield will take the hy-style concept to its 10 other malls throughout the Los Angeles region.
Already, Westfield Topanga in Canoga Park is being renovated and expanded, and plans are being readied to make over Westfield Fox Hills. The price tag for all three centers is around $600 million, with many more millions to renovate the other properties.
There are skeptics, among them Elliot Mahn, owner of Agoura Hills-based Potatoes Potatoes Potatoes, which runs Century City's California Crisp location. He said shoppers don't think about the Westfield brand when they go into a mall and amenities like fancy forks aren't the reason people choose to eat there. (Anyway, he said silverware ends up getting stolen.)
But Westfield's willingness to invest so much speaks volumes about the fundamental transition taking place in retailing. With department stores consolidating and so-called lifestyle centers like the Grove drawing away customers with their specialty retailers and movie theaters, the more traditional centers must keep up by providing many things to many shoppers or at least trying to.
That includes changing the retail mix. At Westfield Topanga, where renovations began earlier this year and are scheduled to be mostly complete by the fall of 2006, Nordstrom and Neiman Marcus will be adding stores as will Target.
Like other mall operators, Westfield is trying retail juxtapositions that were unheard of when large anchor traditional department store tenants ruled the mall experience.
"Target is a wonderful addition," said Greg Stoffel, a shopping center consultant with Irvine-based Stoffel & Associates. "That combination (of Target and Nordstrom) works more and more. People wouldn't have tried it five years ago."
Opportunity has influenced many of the makeovers starting with Federated Department Stores Inc.'s acquisition of May Department Stores Co., which is leading to the closure locally of seven Robinsons-May stores and two Macy's locations.
"What has actually refocused a lot of these projects is the fact that the department store merger has given back property," said John Goodwin, a vice president of development at Westfield. The Robinsons-May at Westfield Fox Hills, for example, is on the chopping block, giving Westfield the opportunity to shift that department store space.
Westfield, publicly traded on the Australian stock exchange, is the largest mall operator in the world, with 129 centers in four countries 68 of those in the United States and 42 in Australia. The estimated worth of the U.S. portfolio is $15.2 billion.
The company began cobbling together its collection of L.A. centers in the 1990s, purchasing TrizecHahn Corp.'s mall portfolio, which had Fox Hills, for $1 billion. In 2002, Westfield was in a group that acquired Rodamco North America's U.S. properties in a $5.3 billion deal that netted Westfield 14 centers, including Century City.
The company was started inauspiciously enough in the late 1950s when Frank Lowy opened a deli in western Sydney with partner John Saunders. With that business thriving, the two purchased the surrounding land and developed the first Westfield shopping center.
Lowy remains chairman of Westfield and members of his family take key roles in the company. His son Peter Lowy sits on the board and is the company's managing director.
The company has a tendency to acquire malls in geographic proximity. That way, it can cross-brand centers to create a distinct Westfield identity that's supposed to attract shoppers even when rival centers are nearby.
That approach was behind the Shoppingtown tag, which was placed on centers across Westfield's portofolio except the name hasn't really worked. "Shoppingtown kind of just made for long difficult project names," said Rob York, a principal with retail consultancy Fransen Co. "It didn't ring true with a more cosmopolitan customer base."
L.A.'s top tier
That certainly was the case at Century City, where an affluent mix of residential and office tenants are luring high-end retailers willing to fork over higher rents. "Rent is always a function of opportunity," said Valerie Richardson, vice president of real estate for the Container Store Inc.
The Dallas-based chain needed 25,000 square feet to locate at the mall, a space requirement that prohibited it from entering Century City prior to the remodel. With the renovation, it's set to open next year.
All told, 30 new stores are slated to open at Century City, lifting mall-wide sales to $400 million from the current $300 million, according to Kurzawa. That puts Century City in the top tier of malls in L.A. County.
But the centerpieces of the Century City renovations are the theater and dining terrace. These additions will be on the Constellation Avenue side of the mall; the old theaters and food court, on the Santa Monica Boulevard side, will be turned into retail offerings.
The overhaul comes none too soon for some merchants. Craig Albert, president of Flavor Firm, franchiser of the Tacone restaurant chain, remembers that when the AMC multiplex had a big movie playing, his Century City location would get a bump of $200 to $300 per day. "I think the theaters at the Grove and some of the others around town have really impacted that adversely," he said.
Rick Caruso, chief executive of Caruso Affiliated Holdings LLC, the Grove's owner, isn't worried about the Westfield renovations hurting his mall properties. This year, he said the Grove is on pace to increase its sales per square foot 40 percent over last year, although he wouldn't disclose the specific figures.
"I am glad to see Century City get improved. I think it is needed," he said. "The challenge for us is that we always have to be on the cutting edge and constantly doing new things."
Looking for convenience
At Fox Hills, Westfield faces perhaps a tougher challenge than at Century City. It needs to broaden its customer base if it wants to pull shoppers away from other shopping venues.
To do so, the company is adding a fa & #231;ade to give the indoor complex a lifestyle center feel. The focal point will be a grand entrance facing Sepulveda Boulevard around which specialty stores and restaurants will be centered.
If the hy-style concept is transformative there at Fox Hills, it's a good bet the concept can succeed at other local Westfield malls, including those in Valencia, Eagle Rock and West Covina.
In the end, Stoffel stressed that mall shoppers just want to eat and shop at the most convenient and best places. After all, he said, South Coast Plaza is no beauty, but the mall is always a top performer.
"Of all the centers I have seen across the United States, three quarters of them look better than South Coast Plaza, but no one has a tenant mix better than that in Southern California," he said. "That is what really matters."
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