Target Has Malls In Its Sights

 
 
 
 
 
The familiar red bullseye set to go up on the site of a former Lord & Taylor in Newark, Del., serves to illustrate the evolution of the nation’s shopping emporiums: Developers are looking beyond department stores for mall anchors.

The 135,000-sq.-ft. store will open this fall in the Christiana Mall, but Target already operates 85 mall-based units. This should come as no surprise: A spate of retail casualities and store closures over the past few years has freed up a sizeable amount of retail real estate. As a result, mall owners and operators are offering cheaper leases and throwing in rent concessions, says Jesse Tron, a spokesman for the International Council of Shopping Centers.

“Traditional department store anchors have been turning over somewhat, so you have to look for new anchors,” says Joe Feldman, a managing director with Telsey Advisory Group. “So where do you look? Discounters.” And Target is a particularly attractive candidate because its customer profile is “a little more affluent.”

And because discounters have largely outperformed other retail formats during the recession, they have become even more desirable, Tron says.

In addition to everyday essentials like household products, electronics, clothing and seasonal merchandise, the Christiana Mall Target will include an “expanded food layout in an open-market layout,” Target spokesman Kyle Thompson says.

In a move to capitalize on the popularity of lifestyle centers, some developers are experimenting with enclosed-mall/open-air hybrids. “They’ll take the anchor pad and knock the roof off,” Tron says, “adding an open-air component to an already enclosed mall.”

But it’s the trend toward heretofore unconventional mall tenants that will start to accelerate, he predicts. “You’re going to see an influx of non-traditional anchors coming in due to the recession."