Internet shopping a hot topic as shopping center industry meets

Robert Macy

Monday, May 22, 2000 | 4:19 a.m.

Two years ago the click of a mouse was a deafening roar for the nation's retailers who fretted that Internet sales could turn booming shopping centers into deserted outposts.

But dire forecasts have turned to upbeat predictions as retailing giants forge partnerships with Internet companies, sharing expertise that can generate new customers and retain old ones.

"We're seeing more brick and mortar Internet," a marriage of services by top retailers and leading online companies, Malachy Kavanagh, a spokesman for the International Council of Shopping Centers, said Monday.

America On Line developed relationships with Sears, Wal-Mart and Circuit City; Microsoft with Tandy and Best Buy; and Yahoo! with Kmart.

E-commerce is a hot topic at the 43rd annual International Council of Shopping Centers convention, which began Sunday and runs through Thursday. More than 30,000 retail developers, brokers and leasing agents are expected to attend.

"A lot of our sessions are focusing on e-commerce and what impact it's having," Kavanagh said. "As far as number are concerned, Internet sales are still a small part of the retail industry. In 1999 it was about 1 percent, but it's growing.

"We're now seeing Internet companies seeking alliances with retail companies," Kavanagh noted. "They need the retail experience to grow their businesses. We have a lot of vendors here that will be working to link retailers to the Internet. This will offer shoppers the opportunity to shop in stores or on the Internet."

When the Internet first began to flex its retailing muscle, "there was a lot of fear," Kavanagh said. "Retailers and shopping center developers were concerned there would be a cannibalizing of existing sales. It took a couple of years, but retailers are now seeing a lot of instances where the Internet is driving customers to the stores."

A report released at the convention shows shopping centers registered more than $1.16 trillion in sales in 1999, up 8.4 percent over 1998. By comparison, total Internet retails sales were estimated at $14 billion to $24 billion in 1999, the International Council of Shopping Centers reported.

The report said an average of 190.5 million adults visited shopping centers each month in 1999, up from 188.7 million in 1998. There were 44,367 centers in 1999, up from 43,583 in 1998.

The annual convention will allow major industry players to showcase new or expanded projects here targeting some 34 million Las Vegas visitors and 1.4 million local residents.

The Forum Shops at Caesars, the facility that proved visitors were receptive to spending big bucks in stores as well as casinos, is entering its third phase of an expansion that will give it 740,000 square feet of high-end retail space. The Forum Shops opened in 1992 with 240,000 square feet of leasable space and was expanded to 500,000 in 1997. The center has become the top-grossing shopping mall in the nation at $1,400 a square foot a year.

The Roman-themed Forum Shops has sparked a boom in high-end centers here, with resorts such as the Venetian and Bellagio making upscale retailers an integral part of their operations. The Grand Canal Shoppes at The Venetian includes 500,000 square feet of retailing in a Venice setting complete with canals and gondoliers.

The new Aladdin Hotel, scheduled to open in August, will include 500,000 square feet of shops in its Arabian-themed Desert Passage center.

Mandalay Bay resort is planning a 1.2 million square foot upscale center.

And the Fashion Show Mall is more than doubling its size to 1.7 million square feet.