REAL ESTATE

Phase one of center court redevelopment completed in July; More to come

BY Michael Fickes

Honolulu — With 42 million visitors per year, the two million-sq.-ft. Ala Moana Center in Honolulu boasts sales per square foot of $1,300. At the beginning of the year, owner General Growth Properties began a massive $572 million redevelopment of Ala Moana — the world’s largest open-air shopping mall. The goal is to add 650,000 sq. ft. of new retail space.

To date, phase one of the center court redevelopment has been completed. The work has updated the common area finishes and restrooms and added new stores, including ‘Auana Quilts, which is now open, and Minamoto Kitchoan, a Japanese confectionery shop slated to open in September. Several existing retailers have relocated within the renovated Center Court area: Island Sole, Lupicia, Swatch, True Friends, Valerie Joseph and Watumull’s.

Phase two is underway and will finish up in November. It will add a Freaky Tiki Tropical Optical sunglasses store and a Nature Republic beauty shop and relocate four stores. It will also construct a new center stage and a new customer service center.

There’s a lot more to come. GGP has bought out the lease on the 340,000-sq.-ft. Sears for $250 million. The store will remain open as Sears throughout this year.

Back in May, GGP announced that a 167,000-sq.-ft., three-level Bloomingdale’s would serve as the centerpiece of the retail expansion in and around the Sears store, which will be demolished.

The retail expansion will include large format retailers, dining, entertainment and 200,000 sq. ft. of inline retailers.


Click here for Past Project Spotlights

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Neiman Marcus launches online beauty product specialist program

BY CSA STAFF

DALLAS — Neiman Marcus launched an online beauty product specialist program that offers customers the same personalized counter experience they would receive in-store.

"Through this program our customers can expect to receive guidance on skincare regimes, makeup application and choosing a personal scent," said Kelly St. John, Neiman Marcus Direct VP, divisional merchandise manager, beauty. "The Neiman Marcus online product specialist is here to take the mystery and question out of the equation for the customer when it comes to her cosmetic and fragrance needs."

Currently the program has specialists representing the following brands: Armani Beauty, Beauty by Clinica Ivo Pitanguy, Cle de Peau Beaute, Creed, Dior Beauty, Guerlain, Hanae Mori, La Prairie, Laura Mercier, Revive, Shiseido and Yves Saint Laurent.

Customers can contact their product specialist of choice via email directly from the Neiman Marcus website.

Neiman Marcus, Inc. is the parent of the Neiman Marcus Group, Inc. The company’s operations include the specialty retail stores segment and the online segment. The specialty retail stores segment consists primarily of Neiman Marcus, Last Call and Bergdorf Goodman stores. The online segment conducts direct to consumer operations under the Neiman Marcus, Horchow, Last Call and Bergdorf Goodman brand names.

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What’s Hurting J.C. Penney? Lack of Change and Clarity

BY CSA STAFF

By Kathy Gersch, VP at Kotter International [email protected]

After the larger-than-expected 12% drop in quarterly revenue J.C. Penney posted on Tuesday, I believe that the company’s time is running out. The drama among the Board, swapping CEOs, and new lines of credit are just distractions from the core problem. J.C. Penney has failed to make the big changes in its strategy to prosper in today’s retail environment – changes they need to make in order to survive.

The retailer’s leadership has made clear statements about future: They are going to stop following the path laid out by former CEO Ron Johnson and they are moving away from his no-coupon strategy. In other words, they have clarified what they aren’t going to do, but as I’ve said in the past – this is not a path forward. J.C. Penney’s leadership must make clear what they are going to do.

One key problem is that they have yet to identify who their target customer is. They haven’t clearly defined what’s different about the new J.C. Penney. What will be new and compelling enough about the J.C. Penney retail experience to draw the customer in? What will they deliver to keep these customers coming back in a world where there are lots of options – online and off?

If J.C. Penney doesn’t want to fade into history like retailers Circuit City and Borders, they’ll need to focus on three key actions:

1. Clearly define the path forward. So far, J.C. Penney has spent far too much time focusing on the problems that have brought them to where they are, rather than how they plan to move forward and get out of their slump. It is imperative for CEO Mike Ullman to clearly define a vision for where the company is headed and what it needs to do to compete. This vision must be specific, it must be actionable, and it must be communicable.

2. Communicate this vision to the company. Whatever the path forward is, the retailer must clearly communicate the new vision internally to its employees to create urgency around the new strategy. Most leaders fail to communicate their visions adequately. J.C. Penney must frequently and continually share compelling reasons for their own employees to believe that this future path is one worth supporting and working toward. If their own employees don’t understand and believe in the new vision – if the retailer can’t win their hearts and their minds – then any efforts to develop brand-loyal customers will fail.

3. Make a dramatic change. This is the most crucial step for J.C. Penney. The company must do something dramatic enough to draw customers back into its stores. Bringing coupons and promotions back is not a significant change. In fact, it’s far from it. If J.C. Penney continues to make small, incremental changes that largely involve going back to pre-Johnson-era practices, it will continue to lose ground to its competitors – which it was doing even before Johnson took over.

J.C. Penney has been on the ropes for quite some time now. Until they follow these steps, they will continue to spiral. Even if they start now, it may be too late.

Kathy Gersch is an executive VP at Kotter International, a firm that helps leaders accelerate strategy implementation in their organizations. She can be reached at [email protected].


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P.Rosenblum says:
Aug-26-2013 01:10 pm

Missing something
Hi Kathy, The biggest problem JCP has, and in fact, the problem that has existed since before Ron Johnson's tenure is that it doesn't have enough cash to execute any kind of major change. If you look back to 2011, you'll see that $900 million was burned on a stock buy-back, and another $270 million, give or take on buying the Liz Claiborne brand (reported as $267 mm but the fees are always serious money in these transactions. Dropping revenue 25% during the Johnson era didn't help much, and I believe the company was about to become insolvent when it finally let Mr. Johnson go. Mr. Ullman has enough clout with factors to have kept those dogs at bay and also gain some more needed working capital, but there's just no room for re-invention. The question is, does JCP bring enough differentiated value to exist? One could ask the same of Sears and Kmart, and I think the answer is the same for all three. Not really. It's sad but its true. Johnson's ideas weren't bad. He was trying to move away from the pack. They were just poorly funded and accompanied by a marketing campaign that's right up there with the original Infiniti ads and New Coke introduction as "worst in history". So what are we left with? The core customer? The old one, who the company is begging to come back. The core products? What Mr. Ullman was working towards, assuming they can get rid of the home products brought in under Mr. Johnson's regime (which its old customer will not buy. The strategy? Survive. That's the story.

P.Rosenblum says:
Aug-26-2013 01:10 pm

Hi Kathy, The biggest problem JCP has, and in fact, the problem that has existed since before Ron Johnson's tenure is that it doesn't have enough cash to execute any kind of major change. If you look back to 2011, you'll see that $900 million was burned on a stock buy-back, and another $270 million, give or take on buying the Liz Claiborne brand (reported as $267 mm but the fees are always serious money in these transactions. Dropping revenue 25% during the Johnson era didn't help much, and I believe the company was about to become insolvent when it finally let Mr. Johnson go. Mr. Ullman has enough clout with factors to have kept those dogs at bay and also gain some more needed working capital, but there's just no room for re-invention. The question is, does JCP bring enough differentiated value to exist? One could ask the same of Sears and Kmart, and I think the answer is the same for all three. Not really. It's sad but its true. Johnson's ideas weren't bad. He was trying to move away from the pack. They were just poorly funded and accompanied by a marketing campaign that's right up there with the original Infiniti ads and New Coke introduction as "worst in history". So what are we left with? The core customer? The old one, who the company is begging to come back. The core products? What Mr. Ullman was working towards, assuming they can get rid of the home products brought in under Mr. Johnson's regime (which its old customer will not buy. The strategy? Survive. That's the story.

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