THE CHANGING MALL
Stamford Town Center grapples with effects of U.S. retail upheaval
STAMFORD — Five retailers have recently left or plan to soon exit Stamford Town Center. The changes are not likely to end with that group.
The turnover at the downtown mall shows the local impact of a sector hit by the ongoing march of e-commerce and a series of bankruptcies and closings. Constraints on many customers’ disposable incomes and competition from other shopping centers compound the challenges. But mall officials and a number of retail experts said “Class A” retail complexes such as Stamford Town Center are not about to be swept away like many of their lower-end counterparts.
“It’s a lot easier to backfill the spaces in a Class A mall, than in a Class B mall,” said Garrick Brown, vice president of Americas retail research for commercial real estate firm Cushman & Wakefield. “In retail, there are haves and have nots. Class A malls are still the haves.”
Retail retrenchment
Each of the latest store closings at the mall reflects companywide struggles.
J. Crew and Armani Exchange both closed on Jan. 27. In the past couple of years, J. Crew’s parent company has shut down dozens of locations, including the one at the Danbury Fair mall. Armani Exchange’s
parent company has shuttered a number of stores as part of a 2017 restructuring.
The Walking Co.’s outlet went dark on Feb. 10. Its parent firm filed again for bankruptcy last year.
The Ann Taylor storefront is set to close on Feb. 23. Its departure fits into a 2017 plan by its parent company to close up to 667 locations.
And Gymboree’s outlet at the mall is also going out of business. The company is closing all of its stores, which include locations at Danbury Fair and tje Westfield Trumbull mall.
“It’s true that bankruptcies create vacancies,” Robert Taubman, the CEO, president and chairman of Stamford Town Center’s owner, Taubman Centers, said on a call Thursday with investment analysts. “But in high-quality real estate, they also create the opportunity to improve the merchandising of a center.”
Parent company gains
Taubman Centers owns the Stamford mall and 19 other major U.S. shopping centers.
On Thursday, the firm reported 2018 revenues of about $640 million, up 2 percent from 2017.
At the same time, it saw annual increases in key categories — including a 9 percent rise in tenant sales per square foot and a 4 percent uptick in rent per square foot.
“We’re pleased with what we’ve accomplished operationally and strategically this year,” Robert Taubman said.
In the past couple of years, however, Taubman Centers has faced questions about its management.
Jonathan Litt, founder of Stamford-based hedge fund Land & Buildings — whose offices are coincidentally located next to the mall — was elected last year to the company’s board after a two-year campaign to reform the firm.
Before his election, Litt had said Taubman was a business plagued by poor governance — and, in turn, underperforming earnings — but one that still owns quality properties.
“The bottom line is Taubman owns an extraordinary portfolio of malls,” Litt said in an interview last year. “The future of the Taubman malls is bright — and it gets lost in the whole retail-real estate narrative. We’re quite excited about these assets and the markets they operate in.”
Litt declined to comment this week, referring questions to Taubman officials.
Ongoing challenges
While e-commerce has shaken brick-and-mortar operations, it still accounts for a modest share of retail revenues — about 10 percent in the third quarter of last year, according to the U.S. Census Bureau.
But its growth is unrelenting: Digital third-quarter sales increased 14.5 percent year-over-year.
Overall, third-quarter U.S. retail sales grew about 5 percent from a year ago.
But many consumers’ finances have deteriorated.
“Only 20 percent of consumers were better off in 2016 than they were in 2007, with precious little income left to spend on discretionary retail categories,” according to a study last year by professional-services firm Deloitte.
Meanwhile, luxury retailers are consolidating their footprints. In 2014, Saks Fifth Avenue closed its department store at Stamford Town Center — replaced soon after by a lower-market Saks Off 5th outlet. The Saks Fifth Avenue and Saks Off 5th chains are both owned by Hudson’s Bay Co.
Six miles west, Hudson’s Bay doubled-down on its high-end offerings in downtown Greenwich. A Saks shoe shop opened at 20 E. Elm St., in October 2016. It was followed in February 2017 by a Saks clothing boutique and then in May 2017 by a Saks jewelry store, both at 200 Greenwich Ave. That trio joined Saks Fifth Avenue’s flagship Greenwich store, long-established at 205 Greenwich Ave.
“Some of the biggest names and luxury items aren’t going to be in malls such as Stamford Town Center anymore,” said Christian Bangert, a Stamford-based managing director with commercial real estate firm Newmark Knight Frank. “Those brands are looking to be in the markets where their consumers are. The Saks consumer is more of a Greenwich consumer, than a Stamford consumer.”
Looking long term
Despite the closings, Stamford Town Center retains a number of other apparel retailers and other key assets.
All three of its anchor spaces are filled — by Barnes & Noble, Macy’s and Saks Off 5th.
But those mainstays have not dispelled growing questions about the mall’s longterm prospects.
Rumors have percolated on social media about possible interest in the site from the University of Connecticut. UConn opened its first residence hall in the city in 2017, and it is further increasing its student housing.
Taubman and UConn officials denied the speculation. Both parties told Hearst Connecticut Media that the university has no plans to lease or buy any of the mall property.
The mall long ago diversified beyond retail. Its restaurant row on Tresser Boulevard replaced a one-time Filene’s Basement department store.
On the north side of the mall stands Bow Tie Cinemas’ long-standing Landmark 9 theater.
“Class A malls have an ability to reinvent their centers,” Brown said. “We’re seeing a trend of them moving toward experiential concepts, including restaurants.”
Meanwhile, Stamford Town Center will soon have another peer in the area. The SoNo Collection mall is scheduled to open in October in Norwalk, off Interstate 95’s Exit 15. Its anchor tenants would include Bloomingdale’s and Nordstrom department stores.
“Even with SoNo Collection opening, I don’t see Stamford Town Center going away,” said NKF’s Bangert. “We’re going to see it continue to change because we’re seeing an evolution of retail.”