Mall Almost Full As Oct. 4 Looms

As developers continue to book tenants into the 1 million SF Pinnacle Promenade in Rogers, which is scheduled to open on Oct. 4, Fayetteville’s 24-year-old Northwest Arkansas Mall is humming along at 91 percent capacity.

“Malls around the country are usually running at 75 to 80 percent, so 90 percent is very good,” said Bridget Elkins, marketing manager for the mall, which is owned by Macerich Co. of Santa Monica, Calif.

The 822,126-SF Fayetteville mall has basically had a quarter-century honeymoon period. The nearest mall of comparable size is in Tulsa, 122 miles to the west.

“It’s amazing that the Northwest Arkansas Mall has been the only major retailer here,” Elkins said. “It’s time for competition … This is going to be good for all of us.”

But some observers think the Promenade shopping center will cut into sales at the Fayetteville mall. With Dillard’s and J.C. Penney stores anchoring the Promenade, will those companies still need the stores they have at the Fayetteville mall?

Elkins said yes. Dillard’s has a lease with the Northwest Arkansas Mall until 2050 on the two stores it has there (a 117,222-SF women’s store on the north side and a 105,000-SF men’s and children’s store on the west side). Penney’s lease on its 154,123-SF space at the mall runs out in 2016. Sears has committed to be in its 137,125-SF location at the mall until at least 2009.

Dillard’s

A source, who requested anonymity, said Dillard’s expects the Rogers store to cut into the Fayetteville store’s sales revenue by about one-third the first year it’s open. The Company expects the Fayetteville store to bring in about $45 million that year compared to $23 million for the new store.

David Gerdel, manager of the Fayetteville Dillard’s, said he couldn’t comment on those numbers but said he “can’t see” Dillard’s closing either of its two stores in the Northwest Arkansas Mall.

“There is too much business in the area,” he said. “This store is expected to do more business than the new store.”

According to the Macerich Web site, the Northwest Arkansas Mall brought in $376 per SF of store space last year (that’s up 40 percent from $269 in 1998). With 820,581 SF of leasable space, that means the mall had about $308.5 million in total sales in 2005.

John George, a spokesman for The Pinnacle Group, which is developing Pinnacle Promenade, said he expects the new shopping center to bring in about $400 per SF its first year, which would amount to about $400 million (the 1 million SF figure refers to covered retail space).

The mall had 6.3 million visits in 2004. Shoppers who go to the mall tend to do so 3.5 times a month and spend an average of 66 minutes there, according to the Macerich Web site.

Alice Church, senior manager of the mall, said occupancy rates there have been between 90 percent and 95 percent for the past five years.

Macerich bought the mall in 1998 for $94 million from Tri-State Joint Venture of Maryland. The mall went through a three-year renovation project that was completed in 1998 and increased the size from 600,000 SF to 822,000 SF. The rent also increased, by about 20 percent.

After the renovation, the mall landed several national chain stores that it had been unable to hook before: Banana Republic, The Gap, Eddie Bauer, Victoria’s Secret, Disney and Talbots.

Retail Sales Stats

Over the past decade, retail sales have grown by more in the cities of Benton County than in Washington County (see chart).

From 1995 through 2005, total retail sales increased by 81 percent in Fayetteville and 77 percent in Springdale. During the same time period, retail sales jumped by 129 percent in Bentonville and 116 percent in Rogers.

Those numbers are based on tax collections reported to the Arkansas Department of Finance and Administration. They include restaurants and hotels but exclude automobile sales.

Fayetteville still led the Northwest Arkansas retail market in 2005, with $1.59 billion in sales. In the other cities, Springdale reported $1.25 billion, Rogers had $964 million and Bentonville $610 million.

Oddly enough, over the past decade, Fayetteville’s dominance over Rogers has grown by 10 percent, with Fayetteville posting 51 percent more retail sales than Rogers in 1996 and 61 percent more in 2005.

A year from now, that could be a different story.

Pinnacle Promenade Tenants

Tenants committed to the Pinnacle Promenade shopping center in Rogers include:

Dillard’s Department Store (100,000 SF)

J.C. Penney’s Department Store (90,000 SF)

Malco Theater (12 screens)

Border’s Bookstore (23,000 SF)

P.F. Chang’s (restaurant)

White House Black Market (women’s apparel)

Casual Creek (women’s apparel)

Ann Taylor Loft (women’s apparel)

Trade Secret (beauty supply)

Regis Salon

American Eagle Outfitters (young men’s and women’s clothing)

The Children’s Place (children’s clothing)

Buckles (young men’s and women’s clothing)

Fossil (watches and accessories)

Brighton’s Collectibles (gift shop)

Click here for a look at retails sales from 1995-2005.