Retail Growth Booms in Palm Springs
For a desert community, Palm Springs is seeing a lot of green lately.
The resort area in Southern California, famous for golf and celebrities and leisure, has also become a mecca for America’s latest pastime—shopping.
The entire desert region, known as the Coachella Valley, has recently seen a new shopping mall open, an existing mall expand, and another mall add a national powerhouse tenant. Still to come is the complete transformation of an existing mall in Palm Springs.
The changes are helping the Coachella Valley cities rack up impressive retail sales figures.
In Palm Desert alone, where much of the growth centers, retail sales ballooned 55 percent in four years to $1.36 billion for fiscal 2001, according to the city’s business support manager, Ruth Ann Moore. Sales dipped to $1.3 billion following the attacks of Sept. 11 but are expected to climb up to $1.33 billion for fiscal 2003, Moore said.
“We’re seeing our transient occupancy tax numbers rise to pre-9/11 levels and we feel fortunate that we’re within driving distance within all of Southern California,” she said.
Along with dollars from the 3 million tourists visiting every year, the area’s booming population is fueling strong retail sales.
Maggie Montez, vice president at CB Richard Ellis in the Valley city of Indian Wells, said the region’s permanent population has grown to 330,000, a 32 percent increase in the past five years. By 2010, that number is expected to reach 500,000 residents. “We’re growing at a faster rate than expected,” she said.
Among the retail heavy-hitters eyeing the region are Wal-Mart Stores Inc., which has chosen sites for three superstores in the area, Montez said, and Nordstrom. The Seattle-based department store is reportedly looking at opening at the Westfield Shoppingtown Palm Desert, but mall officials won’t reveal much more.
“They’re interested in the market,” said the mall’s general manager, Norine Bowen.
A spokesperson for Nordstrom said, “We think Palm Desert is a great community and we won’t rule out opening a store there in the future, but we have no plans at this time.”
Mall Changes
On the horizon is the redevelopment of Desert Fashion Plaza in Palm Springs, a nearly vacant mall, which struggled further when Saks Fifth Avenue closed in July 2001. New owner John Wessman is expected to provide plans by this fall, said John Raymond, the city’s director of community and economic development.
“We’re trying to push for a comprehensive rehab that will start next year,” said Raymond. Plans are to open the renovated mall by fall 2004.
Meanwhile, the Westfield center is in the midst of a $30 million massive overhaul and expansion. The 850,000-square-foot shopping complex, which TrizecHahn Properties sold to Westfield two years ago, is adding another 150,000 square feet with the reshuffling and addition of department stores. Once home to I. Magnin and both Robinsons and May Co., the center has had to cope with department store consolidations. Plans for the new look entail combining the two existing Robinsons-May stores for women and men’s/home into a 200,000-square-foot unit slated to open by fall 2003. Newcomer Sears will open a 124,000- square-foot store by spring 2004.
The Macy’s men’s and home store will expand 20,000 square feet to 75,000 square feet by November of this year. A 7,000-square-foot Charlotte Russe and an 8,000- square-foot Express—geared for both men and women—are also planning to open there. Another big draw of the mall will be the addition of a 600-space covered parking garage (a needed addition with summer’s triple-digit temperatures, Bowen said), a remodeled food court and a new 25,000- square-foot Barnes & Noble. The mall completed a cosmetic makeover with new limestone flooring, glass railings, new skylights and carpet accents last November.
“This is a long-awaited makeover,” Bowen said. “We’re going after every single retailer in the center that has credibility and talking to them about renewing [their leases] early or getting a facelift and it’s been well-received.”
City officials say it’s too early to determine the sales impact of the River in Rancho Mirage, a $50 million shopping and entertainment complex that opened in phases last October. The River houses a number of restaurants new to the desert, including P.F. Chang’s China Bistro and the Yard House, along with a 12-screen movie complex, a Borders bookstore and shops ranging from Billy Martin’s to Ulta Cosmetics, due to open later this year.
“Our sales are on track or going above,” said River marketing director Julie Reese.
At the 3-year-old Gardens on El Paseo, an outdoor shopping center home to Saks Fifth Avenue, Ann Taylor, Talbots and Banana Republic, mall officials are tweaking the mix. J. Jill will open a 4,190-square-foot store this fall, replacing Eddie Bauer.
“J. Jill is a better fit for our center,” said Emily Bird, marketing director for the center.
Bird also said the mall is repositioning part of its second-floor space for office and medical uses. So far, Fidelity Brokerage has leased 5,500 square feet, joining TLC Laser Eye Center.
Bird said competition from the other malls hasn’t hurt the center, considering each caters to a different need.
“It’s very important for Palm Springs to have all different elements from a regional mall for the family to an upscale shopping district,” she said.
Indeed, consumers have demonstrated their affection for certain stores. When Ike Zekaria, vice president of Los Angeles-based teen retailer Windsor Fashions, planned to close his struggling store at the then–Palm Desert Towne Center about four years ago, he was besieged with hundreds of letters from his young customers.
“They felt like we were betraying them, so we showed the letters to the landlord and found a way to make a deal,” Zekaria said.
At that point, sales began to trend forward, Zekaria said. Now, the company is remodeling the 5,400-square-foot store slated to open this September.
“For the last, I’d say, two years, we have had double-digit same-store sales increases,” he said.
