How a Glitzy Mall Developer Built Its Way Into Big Trouble describes how the now-ailing Mills Corp. took the mall-development world by storm:
Mr. Siegel saw most malls as ho-hum rectangles with four large anchor stores. The outlet malls that came in the 1980s and ’90s, which carried name brands at discount prices, often offered no place to eat or sit down. Mr. Siegel decided to marry two concepts: to build full-service malls with food courts and even massage zones and skateboard parks, then fill them with outlet retailers.
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He pursued retailers not typically found in malls, such as Bass Pro Shops, which offers a 60,000-gallon aquarium and an archery range along with its outdoor supplies. Mills was one of the first mall companies to offer prominent space to IMAX theaters instead of sticking movie theatres in an unused corner of the parking lot, says Paco Underhill, who runs a New York-based retail consulting firm, Envirosell Inc., and has written about the mall industry.Shoppers flocked to Mills’s early projects, such as Potomac Mills near Washington, D.C., and Sawgrass Mills outside Fort Lauderdale. So Mr. Siegel picked up the development pace. After building just four large malls between 1985 and 1995, over the next decade Mills built 13 malls and converted two more to its shoppertainment formula.
Mall fashions have changed again:
While a typical large mall draws customers from a 10- to 20-mile radius, many Mills malls are so big they need to draw from a larger area to attract enough customers. As a result, Mills became more vulnerable to new competitors, including outlet centers, discount stores and the hot new model — open-air “lifestyle centers,” which adhere to a “Main Street” approach, with stores opening onto a street, says Steven H. Gartner, president of Metro Commercial Real Estate Inc., a Conshohocken, Penn., retail consultant. And high gas prices made shoppers less willing to drive long distances for a deal on a pair of blue jeans.