CityCenter’s Crystals adjusts, boosts occupancy with new retailers

By Amanda Finnegan

Monday, Sept. 20, 2010 | 1:50 a.m.

More than nine months after its opening, Crystals is still evolving. Managers of CityCenter’s retail district are recruiting new retailers, tweaking the mall’s design and making adjustments where they see fit.

Crystals will add eight new brands to its list of retailers by December, including flagship stores for two of the most recognized luxury brands.

Joining stores like Louis Vuitton, Tom Ford and Tiffany & Co. will be Yves Saint Laurent, Stella McCartney, Donna Karan, Balenciaga, Emillo Pucci and Harry Winston. Prada will open a three-level, 21,000-square-foot flagship store with Strip frontage while Gucci will open a 15,000-square-foot store, also along Las Vegas Boulevard.

The additions will bring the number of retailers at Crystals to 52, which is 29 more brands than the shopping center housed when it opened in Dec. 3, 2009.

By December, Crystals is expected to be 86 percent occupied, up from 54 percent at the end of the first quarter. When MGM Resorts International reported second quarter earnings in August, Crystals was 62 percent occupied, CityCenter CEO Bobby Baldwin told investors and analysts on a quarterly conference call.

Crystals General Manager Farid Matraki said the additional stores have improved the overall appearance of the shopping center.

“In December we had a lot of missing stores. We had a lot of white walls, but now it looks a lot better,” he said. “It’s impossible for a 500,000-square-foot building to have everything perfect when you open.”

But the posh mall is still at least 10 retailers short of its target. Matraki said he hopes to have between 62 and 65 stores upon completion, depending on the plans of future tenants.

Pamela Joy Ring, president of Las Vegas-based Ring Retail Advisory, said it’s important for shopping centers to be near full occupancy when opening.

“The higher the occupancy on a property the longer the visitors will stay, be engaged and are more likely to spend,” she said. “Crystals has done a creditable job of giving the illusion of higher occupancy by placing billboard-sized signage over vacant spaces, but signage does not spell retail sales and revenues. The visitors’ time is probably shortened relative to if there was full occupancy.”

In an effort to fill Crystals and make the space feel warmer, Matraki said, more trees and benches will be added in response to complaints that the mall lacked seating.

Crystals also has made adjustments with its food and beverage offerings.

The shopping center opened with a pricey French restaurant by Wolfgang Puck, which Matraki said didn’t fare well with shoppers. Crystals worked with Puck’s team to change the restaurant into Wolfgang Puck’s Pizzeria and Cucina, which opened in June.

“Originally when we were leasing the building, I wanted an Italian pizza place. Every mall has one,” Matraki said. “French cuisine didn’t translate well. I never think of French cuisine when I think of a mall.

“Sometimes something doesn’t exist in a market because maybe it shouldn’t.”

What does exist in Las Vegas is plenty of competition among high-end retailers. Ring said the Strip is overbuilt in luxury retail with duplication of the same brands.

“Drawing guests from other high-end properties to shop Crystals is problematic,” Ring said. “Why is a guest going to leave Bellagio to shop at Tiffany & Co. at Crystals when the resort has its own?”

Tiffany & Co. opened its third store on the Strip in Crystals. Louis Vuitton, another flagship store in Crystals, opened its fourth. Both retailers declined to comment last week on how their shops in Crystals have affected their other Las Vegas locations.

Crystals does include a large number of retailers who are new to the Las Vegas market, including Tom Ford, Assouline and Carolina Herrera. Ring said if a mix of unique brands continues to fill vacant spaces, Crystals can be successful at drawing wealthy locals and high-end guests from other properties.

Despite Strip shoppers leaning more toward mid-level brands – especially during a recession that has decreased visitor spending – Matraki said Crystals is sticking to its strategy of strictly high-end luxury.

“When we look back a couple years ago, this is what the market was,” he said. “Everyone else diluted from that after starting with high-end luxury. We are filling a niche that the Las Vegas market is missing.”