Mall business slumps after attacks, retailers ready for slow holiday season

Grace Leong

Monday, Sept. 24, 2001 | 9:49 a.m.

The nation's retailers are bracing for slow holiday sales and three malls on the Las Vegas Strip are cutting their hours following a reduction in travel after the Sept. 11 terrorist attacks in New York and Washington D.C.

Business for the malls on the Strip is driven largely by tourism and they are therefore hit harder by the slowdown than local malls, which aren't cutting back.

Starting today, Forum Shops at Caesars will open an hour later at 10 a.m. and close two hours earlier at 9 p.m. The new hours are effective Sunday through Thursday. The mall will close an hour earlier at 11 p.m. Friday and Saturday.

Desert Passage at the Aladdin and Showcase Mall, a standalone operation north of the MGM Grand, cut their operating hours last week.

"We're cutting our operation hours because incoming traffic to Las Vegas has dropped," said Maureen Crampton, marketing director of the Forum Shops.

"But we're very hopeful that Forum Shops will recapture some of the tourist foot traffic because we're finding week by week that hotel occupancy numbers are increasing."

"We're looking at events day by day, if we see more foot traffic, we'll resume normal hours. But a lot depends on the airline industry and the Las Vegas Convention and Visitors Authority to help us recapture Las Vegas as a resort destination."

Desert Passage now closes two hours earlier at 9 p.m. Monday-Thursday. The change began Sep. 18.

"We're trying to determine what events in recent weeks mean for the Strip and where we go from here and whether the slowdown is a short-term or a longer-term issue," said Desert Passage General Manager Troy Fischer.

Showcase Mall marketing manager Vicki Duncan agreed, saying the mall -- whose customer base is overwhelmingly dependent on tourism -- is evaluating a strategy to attract drive-in tourists from Arizona, California and Utah.

"If the customers aren't there, it's hard for the tenants to keep their shops fully staffed. There will be some preliminary cutbacks because of the mall's shorter operating hours," Duncan said.

Showcase Mall, which is partly owned by Forest City Enterprises Inc. of Cleveland, cut its operating hours starting Sep. 20 and now closes two hours early at 10 p.m. Monday-Thursday.

A big exception to the cutbacks on the Strip is the Grand Canal Shoppes at the Venetian, which is maintaining its usual hours.

And four local malls including another Forest City-owned mall, Galleria at Sunset, said they will keep their operating hours unchanged for now. Duncan, also a marketing manager for Galleria At Sunset, said: "It's too early to tell what impact the recent events have had. Our mall was packed because people needed a break or escape from the horrific images on the TV, and news on the radio and newspapers."

Carrie Luckham, Meadows Mall's marketing manager, agreed.

"The mall closed on Sept. 11 and saw a drop in business from (Sept. 12-14) because everyone was glued to the TV, but business picked up over the weekend. The mall is a place for people to get away," Luckham said.

Fashion Show Mall said it is affected by the slowdown in tourism, but said it isn't as hard hit as the malls located within hotel-resort properties because of its large local customer base.

Alan Bond, Belz Factory Outlet World's general manager, is taking a wait and see approach.

"We've had a fairly steady local crowd, but tourism foot traffic has dropped."

"It wouldn't surprise me to see a drop in the amount of disposable income that tourists bring with them. People will take vacations even in a recession unless we slip into a depression. Even in a recession there may still be visitors, but the amount of spending money will drop. We have to look at other options to maintain business."

The National Retail Federation, the world's largest retail trade association, has sharply reduced its retail sales forecasts for the fourth quarter, which includes the winter holiday season.

The Washington D.C.-based association said sales of general merchandise, apparel, furniture, home furnishings, electronics and appliances will now be up 2.2 percent, instead of the initial 4 percent gain forecast.

The association predicts holiday retail sales will be up in the range of 2.5 percent to 3 percent.

"With a few notable exceptions, such as American flags, consumers are currently focusing on basics, buying out of necessity, not desire," said Tracy Mullin, National Retail Federation's president and chief executive officer.

"We expect consumer spending patterns to begin to return to normal levels as the holiday season approaches," she said.

George Connor, a retail specialist of Colliers International, echoed similar views.

"Retail sales are off considerably across the nation, and in Las Vegas particularly because we depend on tourism. If tourists aren't coming, all of the Strip will be affected," he said. "But this is just a short term phenomenon of 6-8 months that will correct itself as people begin to feel better."

"We have a number of big projects on board now, the Fashion Show mall expansion, the Mandalay Bridge (mall) project is under construction, and pre-leasing of Chelsea Property Group's 400,000-square-foot retail project (downtown) is under way," he said. "We're in the process of handling leases right now. But there may be delays if tenants hesitate to commit due to uncertainty in the economy."

The Associated Press contributed to this report.