Wal-Mart Stores Inc., the country's largest retailer and a lightning rod for local labor unions, is negotiating to build its first mall-based store in the Washington region -- in Manassas Mall, according to a source familiar with the deal and several mall tenants.
Wal-Mart operates 32 stores in the region, including two in Loudoun County.
With large plots of commercially zoned land growing scarce and jurisdictions across the region passing tough zoning rules against big-box retailers, the company is rethinking its traditional store designs. In Southern Maryland, for example, Wal-Mart has proposed splitting a store into two buildings to skirt a local zoning ordinance.
A source familiar with the negotiations cautioned that plans to build the Manassas store were not complete and could easily fall apart.
Vornado Realty Trust, which manages Manassas Mall, declined to comment. Mia Masten, a spokeswoman for Wal-Mart, said the company does not comment on proposed stores until a deal is signed.
"This market is very successful for the company, and we are always looking for ways to grow and to better serve our customers," Masten said.
The store would not be Wal-Mart's first in an enclosed mall. About 40 U.S. malls list Wal-Mart as a tenant, according to the Directory of Major Malls, a retail industry trade publication. With department store sales flagging, malls are also courting such chains as Target Corp., another tenant in Manassas Mall.
Construction on the Manassas Mall Wal-Mart is expected to begin in summer 2006, according to mall tenants briefed on the plan. The store would replace a 90,000-square-foot space formerly occupied by Sears, Roebuck and Co. at the eastern end of the mall. Sears relocated to a shuttered Montgomery Ward store on the western end of the mall in 2002 to have more visibility from busy Sudley Road.
The 33-year-old Manassas Mall, anchored by Hecht's, Sears, JCPenney and Target, advertises itself as "One great place to shop." But the mall has suffered from empty storefronts and lackluster sales, tenants said.
"This mall is getting slower and slower every year," said Sohaila Rubin, owner of Enchanted Path, a store that sells shawls, candles and wood carvings from Bali, Indonesia.
Sales in 2004 were $341 per square foot at Manassas Mall, not including empty stores and anchor tenants, according to the International Council of Shopping Centers, a New York-based trade association. By comparison, the national average for mall sales is $366 per square foot, excluding anchor store sales, according to the trade group.
Last year, R.W. Murray Co. -- a Prince William County general contractor -- made a bid to demolish the vacant former Sears store, which has driven shoppers away from the western side of the mall. It still remains, surrounded by seven other empty storefronts. In addition to the empty anchor, there are 15 empty storefronts -- half near the old department store. In addition, existing stores are struggling.
"Things have been tough for us in that mall," said Jake Zargarpur, owner and chief executive of Fashion Time, a jewelry and accessories chain.
Zargarpur said that although people in the county are increasingly wealthy, sales at the mall have slumped.
"There's so much going on, yet that mall is doing horribly," Zargarpur said.
"You only make enough to pay rent," said Moe Boukhair, who owns the Downtown Fashion store, which caters to a teenage market by selling jeans and T-shirts.
Like many older malls in the country, Manassas Mall is competing with outdoor shopping centers and even discount stores.
"In the old days, people went to the malls for several hours and maybe had lunch," said Tom Maddux, president of KLNB Retail, a commercial real estate company whose clients include Wal-Mart. "People don't have time. Malls are evolving and changing, and the malls that are most vulnerable are the older malls."
