The Mall of America Takes on the Great Recession
Mar 2, 2010 2:07 PM
...for the year and tried to minimize health care costs by organizing wellness education events for employees, including yoga classes and a smoking cessation program. When vending contracts came up, everyone was encouraged to negotiate as hard as they could to lower prices. Though there have been no layoffs, the Mall’s management tried to shuffle workers’ schedules to further trim its budget.
In addition, Bausch admits some tenants approached the management with rent relief requests as they couldn’t meet their performance expectations in a down economy. The Mall of America had to grant some of those requests, though the management team first spent a lot of time with the retailers looking at their operations and marketing efforts and trying to figure out new ways to drive sales.
The measures seemed to have helped—though the Mall’s owners don’t release official numbers, Bausch estimates the occupancy rate at the Mall is currently at about 95 percent, within its historical range. But both the business development team and the leasing team are aggressively searching for new concepts that would work with the center’s demographic and image to make sure that if any spaces become available they are not leased haphazardly to the first taker.
“Sometimes it’s easier to just lease the space, but you have to get the tenant [your customers] want,” Bausch notes. “That’s the first thing, because if you have the right mix of tenants, you are golden. We read everything we can get our hands on, we do research constantly to see who our customers are, who is our most productive demographic and what they are looking for. And then we look at who are the new tenants out there and can they fill that need?”
For example, last year, Bausch saw a newspaper story about Mattel Inc. partnering with department store chain Bloomingdale’s to open Barbie shops inside Bloomingdale’s locations for the doll’s 50th anniversary. She reached out to the company and Mattel ended up opening a pop-up shop at the Mall of America in the fall of last year. The pop-up proved successful enough that Mattel is now thinking of taking a permanent location at the center.
The mall also spent close to 10 years trying to bring in the American Girl Store, but the timing was never right. Finally, in November of last year, the company opened its first store at the Mall of America. “If you know something would be right for your mall, you just have to keep going at it.” Bausch notes.
Overall, she advises mall owners not to skip on any expenses that would impact the quality of service at their center. “I certainly think that if you cut in critical areas, it will come back to bite you,” she says.
The mall’s performance in the last year certainly goes to show that expensive can be cheap.
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