California Apparel News

A fallen retail giant may be on the road to regaining its former prominence.

The city council of Torrance, Calif., unanimously approved plans submitted on April 6 by Arlington, Va.–based The Mills Corp. for a $200 million renovation of the Del Amo Fashion Center.

At 2.5 million square feet, Del Amo is the biggest mall in the Western United States, but it has been a slumbering giant. For more than a decade, it has been mired in economic doldrums while nearby shopping centers such as the South Bay Galleria, owned by Cleveland, Ohio–based Forest City Enterprises, have attracted consumers with newer stores and higher-end retail.

“We’ve been very disappointed in the mall’s deterioration. It’s been an embarrassment,” said Torrance City Councilman Paul M. Nowatka. “The Mills Corp. has made a commitment to having a class mall, which will attract class retailers.”

Mills, a 20-year-old company that also owns The Block at Orange and Ontario Mills, hopes to attract affluent shoppers with a top department store such as Bloomingdale's, high-end restaurants and retail stores, a cinema, and possibly a bowling alley and a spa.

The Del Amo Fashion Center is located in the right place to attract well-heeled consumers. Neighboring town Palos Verdes Estates has a median income of $123,000, according to the 2000 census.

Kevin Kudlo, group vice president of development for Mills, said Del Amo’s facelift should be completed by the spring of 2005. Construction might begin this summer on the designated improvement area: 86,123 square feet of what the Planning Department of Torrance calls “the obsolete north end” of the shopping mall, now the site of the empty Montgomery Ward building.

Mall tenants have been eagerly looking for a delivery from Del Amo’s doldrums since Mills purchased the shopping center in July 2003 for $442 million.

“Foot traffic here always seems to be in slow motion,” said Jose Rubio, manager of athletic-apparel boutique Just Sports. “People just come into the mall to browse or kill time. The mall’s new look is going to attract new people just like a magnet.”

Tapping underserved markets

The renovation stands a good chance of success because the South Bay is an underserved market, according to Mills.

Analyst George Whalin, president of San Marcos, Calif.–based Retail Management Consultants, agrees with this assessment. “They have a captive population in Palos Verdes. It’s hard to get in and out of there,” he said.

Palos Verdes shoppers must travel long distances to other prime retail destinations. The South Coast Plaza is a 50-minute drive. Beverly Hills is a 40-minute trek.

Palos Verdes residents also happen to be a tough audience to please. Shopping centers such as The Avenue of the Peninsula have languished despite being the address for popular businesses such as Saks Fifth Avenue and Abercrombie & Fitch.

Whalin said attracting crowds is an industrywide problem for malls.

“Malls all started out being destinations,” Whalin said. “But they did such a poor job of remaining destinations. The Mills Corp., on the other hand, has a great track record across the country. They attract a tremendous amount of people to their shopping centers.”

Kudlo said Mills stresses entertainment in its 24 U.S. shopping centers. The company hopes to attract a South Bay crowd with an outdoor design, a hot new trend for shopping centers, including The Grove in Los Angeles.

The renovation’s centerpiece, the promenade and the plaza, will be outdoors. This area’s retail stores and restaurants will be housed in a two-story building. The bottom floor will feature restaurants with outdoor seating. Retailers and entertainment venues will be on the upper floor.

Immediately north of the promenade compound will be an attached three-story department store comprising 210,000 square feet. To the west, Mills will enclose another 536,843 square feet of space in a traditional mall building with a roof. The new building will house additional retail space and a common area.

The new mall will also gain 3,744 parking spaces. This is an increase of 1,913 parking spaces for the shopping center, which is on Hawthorne Boulevard, one of the busiest traffic arteries in the South Bay.

California has been a particularly attractive destination for Mills, which also plans to renovate a mall similar to Del Amo on Piers 27–31 of San Francisco’s historic port. The $200 million project includes 134,000 square feet of retail space and 50,000 square feet of restaurants and cafeacute;s that will border recreation facilities for boating, swimming, skateboarding and BMX biking.

San Francisco County’s Board of Supervisors was scheduled to vote on the project on April 9, but Mills asked for a 60-day postponement to revise plans in order to satisfy traffic and design concerns of various civic and consumer groups.