Sun, Feb 11, 2018 - Page 15 News List

Miami mall reserved for the rich is doing just fine

By Kim Bhasin  /  Bloomberg

Two 100% Capri employees model the brand’s clothing at the Bal Harbour Shops in Miami on Jan. 26.

Photo: Bloomberg

At the northern tip of Miami Beach’s famed barrier island, atop what was once a tangle of mangrove-filled swamps, sits a three-story, 43,300m2 sanctum for the super-rich. A pair of models dressed in beige linen outfits strut silently past onlookers like a wandering catwalk ad. Outside, shoppers shell out US$30 for valet parking and the right to show off their supercars near the main entryway.

Bal Harbour Shops looks like a posh resort compared with the 1,100 or so indoor malls sprinkled throughout US suburbs. Instead of the glare of fluorescent lights and fake plants, the main drag there is lined with tropical greenery and ponds with turtles and koi.

It is different from your run-of-the-mill mall in other ways, too: This one is not constantly cutting deals on rent to get stores to stay. On the contrary, there is a wait list. And while some malls are desperately seeking financial lifelines, this one is planning a US$400 million expansion.

The mall’s developer, Matthew Whitman Lazenby, 40, has just returned from a business trip to South America, where he visited several malls, including one in Sao Paulo, Brazil, that is a virtual duplicate of his.

“There’s not many luxury stores you go into and say: ‘Ugh, this is terrible,’” he said. “There are some, though. Not here.”

Malls across the US are dealing with what has been called the “retail apocalypse”: The looming death of an industry unable to cope with the shifting shopping habits of consumers. Clothing retailers close stores by the thousands as households shift spending to travel, eating out and other leisure activities.

More importantly, foot traffic continues to slow as customers abandon the suburban mall for the ease of online shopping. US e-commerce sales are expected to account for 17 percent of all retail by 2022, up from 12.7 percent last year, with Inc the main driver, according to Forrester Research.

Even worse, Credit Suisse AG has predicted that from 20 to 25 percent of the complexes in the US will shut their doors within the next five years.

It is the kind of cultural cataclysm so total that suburban explorers trek through dead malls with their cameras, chronicling decay as if they were ancient ruins.

While the malls Generation X came of age in are on death row, luxurious versions of those dinosaurs are doing just fine.

Bal Harbour regularly tops the annual list of the most productive shopping centers in the US, according to real-estate research firm Green Street Advisors.

However, malls for the rich are not immune to e-commerce, Lazenby said — they just have more time than normal malls before the online monster hits.

Much of luxury has not shifted there yet — it is much harder to convince shoppers to dump US$10,000 on a bejeweled necklace or alligator shoes without seeing the items up close.

Nevertheless, elite labels that once spurned e-commerce are now moving some business online. Internet retailers, such as Net-A-Porter and Farfetch Ltd, have proven that there is an appetite for high-end online shopping.

There are luxury brands that still shun the Internet, but Lazenby said that they should pursue both sides of the business.

“One shouldn’t be at the expense of the other,” he said.

Inside Bal Harbour, a row of jewelry stores draws double-takes, even from well-appointed passers-by. These shiny outposts include Bvlgari, Harry Winston and Chopard. At Graff, the biggest head-turner is a ring with an emerald-cut diamond the size of a fingernail. These are among the few shops at Bal Harbour whose doors are closed — even the 1 percent sometimes have to get buzzed in.

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