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Correction to This Article
A July 23 Business article about shopping malls misstated the age of Herndon resident Michelle Yass. She is 21, not 17.

Old Magnets Just Don't Attract

Mall Illustration
(By Sean Kelly for The Washington Post)
By Ylan Q. Mui
Washington Post Staff Writer
Sunday, July 23, 2006

Even 17-year-old employee Michelle Yass has noticed: When shoppers at paper store Papyrus in Fair Oaks Mall in Fairfax have a question, what they're asking about isn't engraved invitations or shades of vellum. Increasingly, it's the Cheesecake Factory.

The restaurant, which boasts more than 200 menu items and, often, two-hour lines, is scheduled to open at Fair Oaks in the fall, along with steakhouse Texas de Brazil. Customers are waiting with bated breath.

"I've told everyone," said Yass, who lives in Herndon. "Everyone's gonna go now. This mall needs it."

Fair Oaks Mall is tired. Even during weekends, Yass said, traffic is often light. The five department stores anchoring the center -- Macy's, Hecht's, Sears, J.C. Penney and Lord & Taylor -- have lost some of their magnetic power, victims of industry-wide weakness and consolidations. Mastercraft Interiors, another major tenant, has filed for bankruptcy protection.

Mall developer Taubman Centers Inc. hopes the two restaurants will act like a shot of Botox for the aging shopping center. It's counting on them to draw shoppers, boost sales and turn Fair Oaks once again into a destination.

"The reality is that we understood that adding restaurants to a shopping center was bringing someone to a project more times than they were coming before that," said Rick Strauss, vice president of leasing for Taubman. "It creates a sense of place."

Call them the new anchors. Like Fair Oaks, malls across the country have begun looking at restaurants -- along with movie theaters, big-box stores and even supermarkets -- as main attractions. In some places, they are even replacing the traditional mall anchor, the department store.

"It's understandable as consumers change their shopping habits that the anchors, the draws, would change," said Michael P. Niemira, chief economist for the International Council of Shopping Centers, a trade group. "Where the consumer heads in terms of their spending is where the market heads in terms of development."

The catalyst for these changes lies just a few miles down Route 50 from Fair Oaks. The Peterson Cos.' Fairfax Corner development offers a mix of retail, restaurants, offices and homes. The parking lots were packed on a recent afternoon, and the brick-paved streets were bustling with ID-wearing office workers, moms with strollers and teenagers just chilling.

Such outdoor "town centers" have been stealing customers from traditional shopping malls. Some of the most prominent examples include Bethesda Row by Federal Realty Investment Trust, Bowie Town Center by Simon Property Group Inc. and Reston Town Center.

The problem began when department stores started to lose customers to specialty retailers such as Abercrombie & Fitch and Pottery Barn, as well as discounters including Wal-Mart and Target. According to consumer research firm America's Research Group, 85.6 percent of shoppers visited a discounter in May, compared with 32.5 percent who visited national department stores and 21 percent who visited regional stores.

That meant the layout of malls was no longer convenient for many shoppers, who must walk through a department store to reach other retailers. Open-air town centers allow customers to park directly in front of or near the stores they visit. Retailers get more visibility and generally pay lower rents and operating costs than in malls.

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