Bellis Fair Bounces Back

by Heidi Henken

“Business is normal. It’s doing what it was doing prior to Sept. 11.” Thats how Bellis Fair general manager Bob Buchanan describes the economic climate at the Bellingham mall one month after the attack on the World Trade Center and a few days into the United States’ bombing of Afghanistan.

Economics are difficult to discuss or predict when war, human loss and suffering and uncertainty about physical safety are in the forefront of the news. Situations change from day to day and sometimes from moment to moment. But when Business Pulse sat down with Buchanan and marketing manager, Mary Vermillion in October, they were optimistic about the overall ongoing health of Bellis Fair, even in a wartime economy.

Sales at Bellis Fair were up “double digits” in August over the same month last year, says Buchanan, who began heading the mall’s operations in May 2000. Until Sept. 11, “Things were going along as we had projected, as we had anticipated,” he remarks.

There was a noticeable drop in sales for “a few days after Sept. 11, of course, that had an effect on everyone,” Buchanan adds. The mall closed early on Sept. 11 as a precaution. But business picked up soon after and was quickly back to normal.

“The trends are still somewhat the same,” Buchanan observes. “I think that people are doing what the president asked us to do: To live our lives the way we were living them and to not be afraid to be who we are and what we are about.”

Owned by General Growth Properties of Chicago, Bellis Fair is one of 145 regional malls owned by the publicly-traded company in 39 states. In Washington, General Growth also owns Alderwood Mall in Lynnwood, Lakewood Mall in Lakewood and Southshore Mall in Aberdeen.

Bellis Fair currently houses approximately 150 retail stores in its 900,000-square-foot enclosed building. Anchors include The Bon Marché, Sears, JC Penney, Mervyn’s and Target.

The mall is in its 13th year of operation. When Bellis Fair opened in 1988 near the intersection of Interstate 5 and Meridian Street, its impact on Bellingham and the surrounding county was immediate. Three of the anchors — The Bon, Penneys and Sears — had been major pieces of the downtown Bellingham business landscape. The effect of their removal was felt downtown something like the extraction of three front teeth in unanesthetized oral surgery. It also opened the way for expanded retail development along the Guide Meridian corridor, pulling even more shoppers north.

Initially the impact of Bellis Fair was difficult for downtown merchants, but now “We’ve passed that transition,” says Pat Rowe, Bellingham/Whatcom Chamber of Commerce development director.

Smaller “destination-type” businesses have opened downtown, joining together to offer a “uniqueness that people are looking for,” he remarks.

 

Strong performer

Since opening, Bellis Fair has consistently done well, even after the fall in the exchange rate of the Canadian dollar, which significantly cut Canadian patronage of businesses countywide. How well Bellis Fair is doing is difficult to say, however, as the company doesn’t release annual sales for the mall.

General Growth’s Web site doesn’t separate out sales figures for individual properties. However, the company does report an overall annualized daily sales per square foot of $360 as of March 31, 2001, which was up from $347 per square foot for the same period of the previous year.

In General Growth’s corporate office, Wally Brewster, senior vice president for corporate marketing and communication, didn’t have August or September sales figures available for Bellis Fair, but reports that “through the end of June, the mall was tracking ahead of last year in sales” with a “lower single-digit increase” that reflected a slight increase over the year before.

“Bellis Fair is performing better than average in that result,” in comparison to General Growth’s other properties, Brewster says.

With regard to the Sept. 11 attack, Brewster says the revenues of General Growth’s malls dropped for a few days before beginning to pick up again by the next Saturday, with malls seeing more traffic than sales.

“What we found is a lot of people found the mall as a good gathering place (following the attack),” he observes.

Bellis Fair is in the midst of a remerchandising plan that began in 1998, when approximately 40 percent of its vendor leases were due to expire. The remerchandising has been leaning heavily toward the apparel sector, something Bellis Fair’s market research indicated Whatcom County shoppers want.

Whatcom shoppers “like having the quality of a larger, metro shopping experience, but they need the value end of it as well,” says Vermillion.

Buchanan characterizes local shoppers as cautious. “They look for value, they look for quality and I think they hold out until they find what they want,” he states.

“That’s been true for awhile,” Vermillion adds. “That’s not a 2001 phenomenon.”

One of the changes they’ve seen is a move in apparel buying from department stores to specialty clothing stores. That and the importance to this area of the “family market” are the rationale behind the addition of stores such as Old Navy, GAP Kids, Abercrombie & Fitch and American Eagle.

In a sense, says Buchanan, the mall is “like a big department store. It’s one-stop shopping. It’s being able to go there and get as many of your needs filled as possible. We treat the shopping center much the same way.”

To do this, Bellis Fair has been “repositioning ourselves” by adding stores customers tell them they’ve been wanting, Buchanan says.

Vermillion notes that the expansion in the apparel offerings follows a national trend of “more growth in the apparel end of things.”

The additions of The Bon Marché Home Store and Welcome Home were also supported by careful market research, says Vermillion. In Whatcom County, “We spend a lot of money on our home, we care about our home and like to have accessories.”

Bellis Fair had 92 percent of its leasable space occupied in October and hopes to be 97 percent occupied by the end of 2002.

With regards to the remerchandising, Buchanan says the new stores “are all reporting doing very well. We are very pleased with what we have experienced thus far.”

As the long-term plan moves forward, Bellis Fair anticipates adding more large-space retailers.

“Nobody that we can specifically name at this point,” says Buchanan, “as we don’t have anything wrapped up. But there’s a number of other additional retailers that have shown a tremendous amount of interest in our property.

“The nice thing is that the (interested) stores like the other large users that have come in because they are performing well,” Buchanan observes. “(They’re) performing at or above what they’d projected for their stores.

“It interests the other retailers because they know who they can co-habitate with, what co-tenancy is needed for them to succeed in the market and that’s promising.”

 

Small retailers welcome

Along with the big, national name players at Bellis Fair, are the “little guys,” smaller local retailers that give the mall a unique Whatcom flavor. Buzzz Coffee and Grace Harbor Farms are two examples.

They have benefited from General Growth’s program for fostering locally-owned businesses, known as the specialty leasing or temporary tenant program. The program allows smaller businesses to sign month-to-month or short-term leases, instead of the kind of decade-long leases larger tenants usually pen.

“Maybe they just have a seasonal product, or they want to just kind of do a little market test,” explains Vermillion.

The local businesses “do quite well in this environment,” remarks Buchanan.

Buchanan and Vermillion say they are always on the lookout for new candidates for the specialty program.

 

Large employer

The mall employs approximately 1,200 people year-round and adds approximately another 300 during the holidays. This makes Bellis Fair one of the top employers for Whatcom County. An average of 13 million people a year visit the mall.

Vermillion and Buchanan expect those figures to remain consistent this year, even with the current national political and economic climate. When Vermillion has talked with store owners, she hasn’t heard anyone talking about cutting back or not hiring for the holidays.

Bellis Fair also hasn’t noticed any difficulty in getting stock for its stores and Buchanan says he isn’t aware of any impact by trucking slowdowns at the Canadian border.

In forecasting holiday shopping trends, there is some thinking that local shoppers may decide to stick closer to home, which may end up benefiting local retailers.

Buchanan and Vermillion also note that people who might have been considering taking trips across the border or outside the area might decide to scale back and come to a local “desirable location” such as Bellingham for an overnight instead.

When Bellis Fair opened, estimates set the percentage of Canadian shoppers at between 25 and 30 percent of the total. With the devaluation of the Canadian dollar, that percentage had “decreased considerably” by 1998, according to a Business Pulse interview with then-general manager, Charles Christensen.

In line with the re-merchandising, Bellis Fair’s current strategy for wooing Canadians includes trying to offer stores not available north of the border, including Old Navy and American Eagle, as a way of enticing more loonies back down south, say Buchanan and Vermillion.

Bellis Fair is continuing its family-friendly efforts by launching a new Kids’ Club. Vermillion says the new club includes an event the first Friday of the month and special mall perks, including T-shirts, interactive programs for children and parents, free birthday meals at Red Robin and a quarterly newsletter.

Mall management is also looking for a sponsor for the play area and Buchanan and Vermillion are hoping a business or a nonprofit will step in and take advantage of the advertising potential.