by Peter Corbett – Jul. 16, 2009 10:50 AM
The Arizona Republic
I got a glimpse three months into the future recently when I visited Barneys New York on the Las Vegas Strip.
In the short term, it’s a tough proposition in this economy with retailers – especially in the luxury segment – struggling with sales. have average sales of about $420 per square foot with occupancy at 8 percent.
“Everybody has had to do a little more discounting to keep ourselves clean,” said Michael Celestino, Barneys executive vice president of stores. “But we spend every day focusing on delivering the best selection of merchandise, not driving our business on reductions of price.”
Barneys will occupy two levels and nearly 65,000 square feet of space at Fashion Square, joining Neiman-Marcus, Nordstrom and a collection of luxury retailers in the downtown mall.
In Las Vegas, the 2-year-old Barneys fronts the palatial Palazzo Las Vegas hotel and casino across the street from Treasure Island and Fashion Show Mall.
It is a striking store with a winding staircase, whimsical and colorful displays and mannequins decked out in cutting-edge fashion for a narrowing demographic.
On a weekday afternoon, Barneys sales staff outnumbered tourist shoppers looking at the wares. That included big, bold men’s watches that look like arm anchors, $990 Chrome Heart sunglasses, $2,000 purses and $88 T-shirts.
Scottsdale’s Barneys will have a slightly different merchandise mix, but don’t expect mass-market fashion and accessories.
“Each store takes on a little spirit of its own, although there are some iconic features in each store,” Celestino said.
In Scottsdale, that includes a staircase, a glass-box entrance and a Fred’s restaurant on the second level.
Barneys picked Fashion Square as the best Valley location for it after looking at other options, including CityNorth and Palisene in Phoenix and One Scottsdale at Loop 101 and Scottsdale Road, Celestino said.
Steve Helm, Westcor assistant vice president of property management, said Barneys will solidify Fashion Square as the premier luxury mall and add another exclusive retailer.
“This should be something that enhances our sales per square foot,” Helm said.
U.S. News & World Report, in its June 28 issue, identified Fashion Square as one of the nation’s top 10 most profitable malls with sales per square foot of $618 and a 5 percent vacancy rate. The largest 650 U.S. shopping centers
The Valley’s first-quarter retail-vacancy rate was 14.15 percent, up from 11.29 percent a year earlier, according to figures from Valley retail analyst Bob Kammrath.
“The retail environment is bad and getting worse,” he said. “Vacancies in all the centers are the highest they have been in 15 years.”
Barneys should get a boost from being the new kid on the block, Kammrath said, adding that the question is whether shoppers will come back to the high-end store and spend money.
Other merchants opening in the new wing at Fashion Square include True Religion, Forever 21, Stash Collections, Ed Hardy, J.Crew and LTJ Arthur.
An Italian restaurant, Marcella’s, and Modern Steak, a new Sam Fox concept eatery, are also set to open this fall, Helm said.