Bal Harbour Shops Continues Climb In Upscale Sales
By Jennifer Miller
Bal Harbour Shops reaped the benefits of a soaring economy in the high-end fashion market with a 21.2% increase in sales in March compared to March 1999, said Stanley Whitman, developer and managing partner.
Mr. Whitman said sales at the 15.79-acre mall on Collins Avenue and 96th Street in Bal Harbour Village reached a whopping $20.9 million this March, surpassing a $17.25 million sales mark in March ’99.
"In the 35 years we’ve been established, this is the biggest increase we’ve ever had," he said. "It’s a happy economy."
Mr. Whitman attributes the increase to the mall’s merchant mix, strengthening businesses in South America and Europe, and purchases by visitors to the Sheraton Bal Harbour across the street.
The open-air mall, which promoters say has contributed hundreds of millions of dollars to Bay Harbour Village city coffers since its inception, is home to 80 stores, six personal care and service businesses and nine restaurants.
"We make sure the hottest names in fashion are always here," said Enid Rosenthal, marketing director for Bal Harbour. "I think we’ve got the formula down pat. Sales keep jumping."
Last year, she said, the shops added Celine, a seller of fashions by designer Michael Kors; Dolce & Gabbana Boutique, its first store in the US beyond New York; the first Georg Jensen, La Perla, Luca Luca, and Wolford boutiques in the southeast and one of just two Zegna Sport stores in the country.
The shops have a list of firsts over the years, bringing to South Florida such upscale brand names as Bulgari, Christian Dior and Prada.
Mr. Whitman said Van Cleef & Arpels will open its first jewelry store in the US there this fall.
He said the mall’s obligation is to customers, not merchants, so management lets non-performing stores go all the time.
"We have had a few stores that have run over $10,000 per square foot in sales," Mr. Whitman said. "When stores drop under $500 per square foot, they are on our list to say good-bye."
According to figures compiled by the Urban Land Institute, top regional shopping centers in the country average $227.05 a square foot of a mall’s gross leasable area. At about 500,000 square feet including department stores Saks Fifth Avenue and Neiman Marcus and average sales of $1,200 a square foot, Mr. Whitman said Bal Harbour ranks the highest in sales of about 49,000 US malls.
Mario Castelo, store manager for Giorgio Armani, said net sales over the past year have increased for the store at Bal Harbour, though he declined to say how much.
"The success resulted from having better clients, not necessarily more traffic," Mr. Castelo said.
He said the store is receiving more customers from South American countries such as Brazil, where the currency is becoming more stable.
"The economy has been especially favorable to Bal Harbour’s kind of retail tenants, accrued largely to affluent people," said Herbert Alan Leeds, president of Leeds Business Counseling Inc. "On a general basis, the retail economy has been on the upswing 3%-5%, but the rate of increase is nowhere near Bal Harbour’s."
Mr. Leeds said he is concerned about whether retail success will persist after the Federal Reserve’s consistent increases of short-term interest rates. Since June ’99, he said, the Federal Reserve has raised interest five times, most recently to 6.5%.
"Interest rate increases are going overboard," he said. "There is a hidden inflationary risk that could hurt retail. But Bal Harbour probably won’t be affected as much as the lower-priced retail shopping centers. Their customers are not making mortgage and automobile payments. They have a more discretionary spending power."
Mr. Whitman said he attributes Bal Harbour’s long-term success to its response to market demands.
"In Miami, this market has always attracted self-made people and rich people," Mr. Whitman said. "They know how to make money and spend money."