When SAM Edelman decided to open his first Las Vegas boutique late last year, the veteran shoe exec knew exactly where he wanted to set up shop on the Strip: The Forum Shops at Caesars Palace.
“Having traveled the world and seen every great retail location, I firmly believe The Forum Shops is at the forefront,” Edelman said at the time. “Opening a store there has [always] been a dream.”
The storied retail development is home to a diverse group of shoe players, including high-end stalwarts such as Christian Louboutin and Jimmy Choo, shoe giants Nike and Skechers and newer names such as Charlotte Olympia.
The Forum Shops stands out as one of the country’s most coveted retail locations on Las Vegas Boulevard, which accommodates 4 million square feet of retail area along a three-mile stretch of road.
Despite its prime place in the global market today, Las Vegas emerged onto the shopping scene rather late in the game. Fashion Show Mall was the first retail development to open, in 1981, and it wasn’t until 11 years later that The Forum Shops raised the stakes dramatically.
“It was a novelty, but an unproven novelty,” said Maureen Crampton, director of marketing and business development for The Forum Shops. “It’s a themed shopping center, and it’s adjacent to a casino that you can walk through, so there were skeptics in the industry who thought it was odd and different. It was either going to fly and be successful, or we would just have to wait and see.”
The experiment quickly proved to be a hit. “We opened the doors, and stores ran out of inventory,” recalled Crampton, who has been with The Forum Shops since it opened. “They had to overnight inventory from stores in other markets. Stores ran out of shopping bags.”
The early years were so fruitful that in 1995 The Forum Shops started planning an expansion of 30 more stores to its first phase of 70 stores. Other retail developers took note and couldn’t help but get in on the action. “It enhanced the menu as far as visiting the city from the viewpoint of an international customer,” Crampton said, “and it opened the eyes of other developers and other brands to take Las Vegas seriously as a viable market.”
“The Forum Shops definitely changed the retail direction to make it more thematic and bring more of an entertainment element to the city,” said Wendy Albert, senior director of marketing for the Miracle Mile Shops in the Planet Hollywood Las Vegas Resort & Casino. “People were looking at the city differently in terms of what else there was to do. Back then, you came to gamble and to go to shows — and now you could shop.”
Going All In
“Each expansion was merited by the success of the existing shopping,” Crampton said of the continued growth. But The Forum Shops wasn’t the only one making a major play.
Grand Canal Shoppes opened at The Venetian in 1999 with 90 shops. Desert Passage (which is now the Miracle Mile Shops) opened in 2000 with 150 stores. In 2003, Fashion Show underwent an expansion that doubled its size to approximately 1.9 million square feet of retail space.
Fashion Show anchor Saks Fifth Avenue also took the opportunity to expand during the renovation, doubling in size to 162,000 square feet. The Forum Shops expanded a third time in 2004, building space for an additional 50 stores.
Almost 17 years later, Grand Canal Shoppes has grown to 160 shops. “We had a pretty major expansion as well at Grand Canal Shoppes, which added the first and only Barneys New York to the market along with a plethora of first-to-market retailers that couldn’t be found at many of our other competitors at the time,” said Janet LaFevre, senior marketing manager for Fashion and Grand Canal Shoppes. “You have to realize that Grand Canal didn’t remain stagnant. We were always refining our mix over the course of those years when competitors were opening in the market.”
Miracle Mile was also refining its mix while growing to just under 200 stores today. “When our current owners bought the property in 2007 and turned it into the Miracle Mile Shops, they focused on making the shopping center shoppable and approachable,” said Albert.
“They brought in popular brands that would appeal to everybody — not just luxury shoppers. So when the economy took a downturn, people were still coming here because they could afford what we had, so we actually didn’t see a big impact from the recession.”
But not all of Las Vegas Boulevard has been so lucky in negotiating the recession — and its lasting impact. “What’s hurting the market are Asian and international travelers; we are not getting a lot of those people in,” said Debbi Miles, director of marketing for Saks Fifth Avenue at Fashion Show. “The dollar is not the same, and they would come here to get the deals. Tourism is down in terms of people coming to shop.”
Crampton agreed: “The attraction to visit Las Vegas is not as keen as what we were experiencing four or five years ago. We are seeing a slight dip based on the traveler. You become
so dependent on their visit and their disposable income, and if you can’t control that and they aren’t traveling as frequently or aggressively, it’s inevitable that you are going to be affected by that.”
How to Win
In a tricky climate, which fashion players are best positioned for success?
“Those retailers and brands that everybody recognizes are the ones that have done well here,” said Albert. “They have bigger stores, so they definitely bring in [a wide array] of merchandise because they know we have got such a cross-section of customers coming to the city.”
She added that retailers should make their stores experiential, giving shoppers a reason to come in.
“We just opened up Drybar a couple of weeks ago, and it’s the first one in the city,” Albert explained. “It’s the largest one in the chain, and it’s the first one with a full bar and DJ — and that makes it more fun than other Drybars in the country.”
For Saks, service is where it concentrates its efforts. “The fact that we are a department store is in our favor,” said Miles. “We can service them with everything here: get a handbag, a shoe, all the accessories. Because we have everything under one roof, that gives us an advantage. We can style someone from head to toe.”
It’s not just a service issue for Jimmy Choo, which has locations in The Shops at Crystals, Grand Canal Shops and The Forum Shops.
The brand also looks to Las Vegas’ 42 million annual visitors. “Tourism is a key component in luxury retail, and how you manage this clientele is very important,” said Tanya Golesic, U.S. president of Jimmy Choo. “Relationship building has paid off in Las Vegas.”
Strategies aside, there are also intangibles that play prominently in the city’s role as a coveted shopping destination — such as capturing the spirit of Las Vegas.
“Whether it’s a domestic or international customer, they want to take a piece of their iconic trip back home,” said Crampton. “It’s almost like a trophy. They can say, ‘I visited Las Vegas. I gambled and I took my winnings and bought that Louis Vuitton bag or Fendi shoe.’ ”
Alain Baume, U.S. president of Giuseppe Zanotti, shares a similar line of thinking: “Giuseppe Zanotti shoes make men and women feel happy, beautiful and special, and this coincides with the reason why most people go to Las Vegas.”
Gambling on the Future
In spite of the economy not being as flush as it once was, many are still open to the continued expansion on Las Vegas Boulevard.
Albert, who joined the Miracle Mile Shops eight months after it opened in 2000, agreed that growth is still good for the market.
“At some point we are probably going to hit a wall,” she said, “but as long as we continue to find unique things to bring to the property and unique spins on it, and as long as retail is coming up with interesting new merchandise, I think we will still be good.”
LaFevre is not as sure. “It’s hard to imagine what more could be added on the Strip,” she said. “We are very aware that more retail will probably come, but we are competitive, and it’s hard to say we want more retail on the Strip.”