Tuesday, August 26, 2008

Hickory Hollow Mall may add office mix

Owners have 'no intentions to close,' but will refocus on malls its size By SUZANNE NORMAND BLACKWOOD • Staff Writer • August 25, 2008 Hickory Hollow Mall is here to stay, a mall official says. At a recent meeting of the Hickory Hollow Business Alliance, CBL & Associates Properties, Inc. regional manager Mike Johnson bluntly dismissed any notion that the mall may be nearing its end. His statement was in response to rumors that the mall has become not just a victim but a near-casualty of crime and competition. We have no intentions to close Hickory Hollow Mall," Johnson said at the meeting. "Our intentions are to keep it as a very viable center." CBL & Associates Properties purchased Hickory Hollow Mall in 1998. A couple of years later, the mall underwent major renovations that included a whole new interior motif, as well as improvements to the exterior. But the mall has struggled in recent years to keep up with its peers, CoolSprings Galleria and Rivergate Mall, both of which are also owned by CBL & Associates Properties, Inc. Last year, the mall had an 84 percent occupancy rate according to CBL & Associates filings with the U.S. Securities and Exchange Commission. Occupancy rates at CoolSprings and Rivergate were 99 percent and 97 percent, respectively. Although the mall's parent company is determined not to give up on the traditional mall concept, the company is devising strategies it hopes will give the mall a more promising future. Mall to remain primarily retail Johnson said the mall would remain majority retail, and anchor tenants would continue to be a huge part of its focus when it comes to leasing. A new tenant the mall recently announced is Famous Labels, a value retailer which will be making Hickory Hollow its first location in Tennessee. But CBL & Associates Properties is refocusing its efforts on malls this size, Johnson said. Johnson said possible future partnerships include something like that of 100 Oaks Mall and Vanderbilt University Medical Center, where medical offices are moving in with the retail mix. "We're looking at alternative uses," he said, adding they would be complimentary to the retail environment. "It's becoming unusual that malls this size can support 100 percent retail," he said. The company also plans to redevelop Hickory Hollow Courtyard, which is an adjacent piece of property associated with the mall. Johnson said the company is planning to add more retail, as well as restaurants there. The movie theater and TGI Fridays, which currently sit on the property, would remain. Marketing strategies target trade areas In determining the tenant mixes for its malls, CBL & Associates Properties looks for tenants that "offer products and services that fit that trade area," Johnson said. Also, Johnson said, although the company's three malls share advertising during peak retail seasons, Hickory Hollow targets its marketing toward its own trade area. "We have a pretty traditional marketing concept," he said. Johnson said Hickory Hollow is always looking for anchor tenants that don't have a presence in other markets. But, he said, having tenants that are duplicates of those at its sister malls helps more than it hurts. Johnson said there's no doubt that changes in the demographics and competition have forced the company to rethink its focus. "There's no question that the Cool Springs area has a higher per capita income," he said, adding that demographics do make a difference. Also, he said, an "influx of competition" from places such as Opry Mills and The Avenue and Stones River Mall in Murfreesboro have had an effect. "That has affected the tenant mix quite a bit, which is why we've refocused our efforts on finding some alternative uses." Malls everywhere are facing challenges The recent announcement that Dillard's would be leaving the mall this month has caused concerns to escalate about the mall's ability to survive. Linens 'n Things has also announced it would be leaving, following former tenants J.C. Penney and Hallmark. Bill Vaughn, president of The Shopping Center Group, said that many of the problems that department stores are facing, however, are national and not specific to Hickory Hollow Mall. Regarding the local situation, Vaughn described the mall as "a work in progress." "It's just reflecting the change in demographics of that trade area," he said. Britt Beemer, founder of America's Research Group, said the mall should be cautious about how it adapts changes in its customer base. The mall, he said, needs to be attracting new customers as quickly as it's losing old customers. Also, said Beemer, the mall is likely facing some of the challenges that malls everywhere are facing. "Many malls simply don't have enough traffic to make all of their numbers work," he said. This is both a reflection of the economy and changes in shopping trends, he added. And most malls lack individuality and features that would keep them fresh and current and, thus, attractive, he said. Contact Suzanne Normand Blackwood by telephone at 259-8268 or by e-mail at sblackwood@tennessean.com.

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