Harrods mulls Vegas venture

David Strow

Tuesday, Oct. 3, 2000 | 10:50 a.m.

Harrods, the prestigious European retailer, is in preliminary talks with casino operator Mandalay Resort Group to open its first U.S. store on the Las Vegas Strip.

MGM MIRAGE has also had talks with Harrods owner Mohamed Al Fayed about such a venture.

Though such talks are in early stages, retail observers and operators alike say landing Harrods would be a huge coup for the Strip retail market. It would certainly be unprecedented for Harrods, which has never opened a store in the United States.

Both casino companies are saying little about the talks at this time.

"We are in preliminary discussions with Harrods," said John Marz, vice president of marketing for Mandalay Resort Group of Las Vegas. He declined further comment.

MGM MIRAGE, also based in Las Vegas, is saying even less, though it isn't denying the possibility.

"In the course of considering new projects for development by our company, we have the pleasure of speaking with many different creative people and organizations," MGM MIRAGE spokesman Alan Feldman said. "But it wouldn't be appropriate to comment further at this time on the specifics of those discussions."

But Al Fayed told a British newspaper that MGM MIRAGE and Harrods have also had contact -- something that Las Vegas sources confirm.

"MGM approached me with this idea for a hotel, shopping mall and casino in the image of Harrods Knightsbridge (Harrods' main store in London)," the (London) Mail on Sunday quoted Al Fayed as saying. "But it is only in the concept stage at the moment. It's an extremely exciting suggestion but it's gone no further than a proposal."

The vision Al Fayed mentioned is quite ambitious. The Mail on Sunday said the project would involve "a 1 million-square-foot copy of the London landmark (store) surrounded by towering skyscrapers in central Las Vegas. As well as a shopping mall, the American version would include a hotel and casino run by MGM."

Harrods and Al Fayed are also apparently examining the planned 1.2 million-square-foot mall planned between Mandalay Resort Group's Mandalay Bay and Luxor resorts. The mall is a joint venture between Mandalay and General Growth Properties of Chicago, owner of the Meadows and Boulevard malls in Las Vegas.

That mall was placed on indefinite hold last year after former partner Westcor Partners of Phoenix pulled out of the project. Seattle upscale retailer Nordstrom was to anchor the mall, but decided to locate its first Las Vegas store at Fashion Show mall further north on the Strip after its letter of intent with Mandalay expired.

The start of construction is dependent on striking deals with anchor tenants.

"We've discussed some very interesting possibilities, very exciting possibilities with the Mandalay folks," said Rick Moses, vice president with General Growth. Moses said it would be "premature" to discuss these possibilities further.

MGM MIRAGE has at least two sites it could use for development -- the massive Boardwalk parcel on the Strip, targeted by the company for future development of a hotel-casino, and the MGM Grand Adventures theme park, where MGM MIRAGE is considering alternative uses.

The Harrods store in London, opened in 1849, encompasses more than 1 million square feet of retail space, 300 departments and 21 restaurants. It is generally viewed as one of the most upscale and comprehensive retailers in the world.

Harrods also operates a store at Al Fayed's Ritz Hotel in Paris, as well as smaller "signature shops" in Frankfurt, Vienna, Lisbon, Auckland and Singapore. But it's yet to come to the United States.

Al Fayed is the father of Dodi Al Fayed, who was killed in a 1997 car crash in Paris with Princess Diana.

Al Fayed has been examining the possibility of a Las Vegas store since at least 1996, when he had discussions with Steve Wynn about incorporating a Harrods into the Bellagio resort. Though the talks were friendly, Wynn and Al Fayed were unable to come to an agreement.

But the Harrods possibility came to life again this February, when Al Fayed's associates began making inquiries in Las Vegas. At the time, however, Harrods denied any interest in opening a Las Vegas store.

George Connor, senior vice president of resort and retail properties for real estate brokerage Colliers International, said Harrods would bring "a lot of mystique" to the Las Vegas retail experience.

"It would be a very exciting anchor for this marketplace," Connor said. "Certainly the marketplace would find their presence very complementary. It fits very nicely with the mix currently coming (to Las Vegas).

"With Virgin Atlantic coming out here (with direct flights between Las Vegas and London), that bodes very well for Harrods to piggy-back on their traffic."

Even competing retail operators wouldn't mind seeing Harrods come into town.

"Harrods is a fabulous retail destination, and it would be hard to find anyone on the Strip that wouldn't applaud it," said Paul Beirnes, director of marketing at the Desert Passage mall at the Aladdin resort. "Yes, it's competition, but competition is good sometimes. If anything, it (emphasizes) the fact that retail is a very prominent itinerary item for those coming into Las Vegas.

"You could never describe them as a discount retail player. They're a very fine retailer, and one very flattering to the Las Vegas profile."