California Apparel News

For 30 years, Nordstrom has been one of the prominent anchors of the Glendale Galleria retail center in Glendale, Calif. But that’s about to change.

On March 16, mall developer Caruso Affiliated announced that it will be bringing the department store next door to the Galleria’s rival mall, The Americana at Brand. These high-profile malls are located next to each other in downtown Glendale. Nordstrom owned the store building and land at the Galleria. The Americana at Brand’s three-level Nordstrom will debut in 2013 and will be located in a mall area slated for expansion. The more-than-135,000-square-foot parcel is located on the 200 block of South Orange Street and previously housed a hotel and a recording studio and was acquired in January by Caruso Affiliated.

The change of address will be a move to a swankier place, said Erik Nordstrom, president of stores for Nordstrom Inc.

“While Glendale Galleria has been a good home over the years, we think moving into a brand-new store at The Americana at Brand will help us do a better job of serving our customers. We’re excited to be part of such a terrific project,” Nordstrom said in a prepared statement.

Glendale Galleria representatives could not be reached for comment by press time. Glendale Galleria is owned by General Growth Properties Inc. The prominent mall developer and management company announced in November 2010 that it had emerged from Chapter 11 bankruptcy. Glendale Galleria hosts other anchor tenants, including Macy’s, JCPenney and Target. Other tenants include BCBGeneration, MichaelKors , Apple and Metropark.

GGP was informed of the deal on March 16, when it was announced to the press, according to Rick Caruso, chief executive of the developer of The Americana and sister mall The Grove in Los Angeles.

The deal for the Nordstrom relocation also will feature a unique arrangement where Caruso Affiliated will purchase the existing Nordstrom store at Glendale Galleria. Nordstrom then will lease its new store at The Americana at Brand from Caruso Affiliated. Caruso declined to state how much his company paid for the Nordstrom store.

“We will work in cooperation with General Growth Properties and the city [Glendale] to revitalize, remerchandise and reposition Glendale Galleria. We are confident we will be successful in identifying an exciting tenant for the current Nordstrom space and that we can enhance this entire wing of Glendale Galleria,” Caruso said in a prepared statement. No meetings have been scheduled between representatives of the two mall companies.

In a March 16 letter to Sandeep Mathrani, GGP’s chief executive, Caruso expressed alarm over increasing vacancy around The Americana and the Galleria. “The Mervyns store closed, leaving that building vacant for more than two years. Now, directly across the street, Borders is slated for closure, which will create huge dark spaces at this important intersection in Glendale. Additionally, the Galleria II wing has suffered from significant vacancy and lack of foot traffic. We should work together to stop this trend,” Caruso wrote in the letter.

Caruso’s Nordstrom deal is without precedent, said George Whalin, an analyst for Retail Management Consultants in Carlsbad, Calif. “It is extremely unusual for another developer/shopping center management company to promise to help fill a space when it ’steals’ a retailer from its current location,” Whalin said in an e-mail.

The Americana at Brand debuted in 2008 with a gala party attended by then-Gov. Arnold Schwarzenegger and Jay Leno. However, the 15.5-acre mall opened with no traditional anchor tenants. Its tenant mix includes Barneys New York Co-Op, Kitson and Forever 21.

The addition of a new Nordstrom will change the makeup of The Americana. “It will make it a regional mall,” Caruso said, “With a quality retailer like Nordstrom, it will have a stronger draw.”

The Americana’s sales have been increasing. In 2010, the mall’s sales per square foot were $800, according to Caruso. In 2011, its forecasted sales per square foot are $1,100. The Grove’s sales per square foot were $1,300 in 2010.—Andrew Asch