Western Development Corp. officially opens the doors Thursday on the first phase of Potomac Mills, a $97 million mall in Prince William County that gambles on the untried combination of off-price, factory-outlet stores and little-known but more traditional retailers.
Developers of what looks like a massive warehouse from the outside have promised gee-whiz technology on the inside, although some of it is not yet installed. According to the developers' plans, the mall, now only about a quarter filled, will include 170 shops by the end of next year.
When some of the promised gadgetry is in place, a shopper will be able to punch a button to fire up a computerized store directory featuring "Tron-like 3D graphics" and get a printed map to guide him or her through the 1.3 million-square-foot mall; particular shops are shown on the map in color-designated "neighborhoods" where similar products are clustered. Overhead, 6-by-8-foot video screens suspended from the ceiling will carry fashion videos, information about mall shops, news about what items may be on sale, public service announcements and soft-music videos.
Shopping parents will be able to drop children at least 6 months old at an in-mall day-care center staffed by a registered nurse that is expected to open Thursday. Mom and dad will be electronically fingerprinted for identification when they come to retrieve their offspring. Next March, a 10-screen movie theater and a 14-restaurant food court also are scheduled to open.
The mall, a major retail development for an area on the fringe of the metropolis, is part of a joint venture by Western Development and Atlanta-based KanAm Realty Inc. Among D.C.-based Western Development's other projects are the Georgetown Park mall and Washington Harbour, now going up along the Georgetown waterfront. Last week, Western was granted the right to develop the Portal site at the foot of the 14th Street Bridge. The mall's developers hope to lure bargain seekers from throughout the Washington area and as far up and down the pike as Baltimore and Richmond.
Western Development and KanAm Realty, the U.S. subsidiary of West German investment giant KanAm International, are banking that Potomac Mills will draw about 28,000 shoppers each weekday, and 40,000 a day on weekends, from among the 6.5 million people who live in the region. In addition, the developers noted that another 20 million visitors and tourists come to Washington each year and that the mall's location along I-95 makes it accessible to an estimated 100,000 cars that pass by each day on the East Coast's busiest North-South highway.
Despite local opposition, Western Development has won approval from Prince William County to put up a 1,500-square-foot illuminated sign advertising Potomac Mills that will be visible from at least a mile in either direction. The site is located on about 150 acres of wooded, rolling hills off I-95 at Dale City, about 15 minutes south of the Beltway.
Western is billing Potomac Mills as the world's largest "enclosed factory outlet" mall and hopes that shoppers will be induced to travel the extra miles for the convenience of having some 170 stores -- 75 percent of them discount or outlet retailers -- under one roof when the second phase of the mall is completed sometime next year. In such established factory outlet centers as Reading, Pa., most outlet shops -- stores owned by manufacturers that generally sell factory seconds and closeout goods directly to the consumer -- are independently situated in surroundings that generally reflect their budget-price merchandising and require frequent hops in and out of the car to visit different stores.
Potomac Mills will use large, independent off-price retailers -- Waccamaw Pottery, the European fashion discounter Cohoes, and the Swedish home furnishings retailer IKEA -- to anchor the ends of the mall and draw consumers past the other tenant stores, said Jon Miller, general manager of Potomac Mills. What the mall will not have is department stores, which are the traditional keystones of shopping centers.
Other stores include Creighton Shirts, Burlington Brands, Aileen Factory Outlet, The Casual Male, Compare Menswear by Ted Louis Shop, Sassafrass, Ritz Camera, Potomac Sports Factory, a Nike shoe outlet, a Toys & Gifts outlet and dozens more shops selling goods ranging from children's apparel to ceiling fans. Some of the stores are already open, though the official ribbon-cutting ceremonies are set for Thursday.
There is also an Elvis Presley Museum that will display such artifacts as the late king of rock 'n' roll's last personal limousine -- a 1973 stretch Lincoln Continental with a bar, color television and fur-lined doors -- and other items from "the largest private collection of Elvis memorabilia in the world." It also will sell items such as Elvis jackets and souvenirs.
In size, Potomac Mills will rival Fair Oaks Shopping Center or Tysons Corner when it's completed, but in concept, it's very different, "a revolution in marketing," said Western Development President Herbert S. Miller, Jon Miller's brother.
Jon Miller said he expects the electronic locator system "will bring in over 5 percent in extra business, and 5 percent, when you have 170 retailers and over 1.3 million square feet of space, is a lot of extra sales. It will be phenomenal." He said studies have shown that 80 percent of merchandise is purchased by women, so Potomac Mills will be geared in large part to female shoppers. "The mall will have more seating than other malls its size for men to plop down and watch the girls go by while waiting for their shopping wives," he said.
Jon Miller said Potomac Mills' blend of independent "off-price" anchor stores -- Waccamaw Pottery, IKEA and Cohoes -- some regular retailers, plus deep-discount and factory outlet stores under a single roof is unique to retailing, and targets the baby-boom generation in Washington's educated, upscale market. This group "is demanding value, but at the same time has financial resources to buy," he said.
Waccamaw Pottery, a Myrtle Beach, S.C.-based home furnishings retailer, will be among 40 to 50 stores officially opening this week as part of Phase I, with all 82 first-phase stores expected to be open by March. Waccamaw, in a massive 150,000-square-foot warehouse-like store, carries a vast range of items from pottery, gift wrap, silk flowers and linens to brand-name china, rugs, baskets and wicker furniture, according to Karen Lord, Potomac Mills' marketing director. IKEA, Sweden's largest home furnishings retailer, is expected to open its store next March as part of Phase II, Lord said, while Cohoes, a discount retailer of European men's and women's fashions, plans to open in mid-October.
Whether Potomac Mills will affect sales in the area's traditional regional shopping centers such as Springfield Mall, Fair Oaks, White Flint and Tysons, is open to debate. "We think the mall will affect Fredericksburg and Springfield Mall to some degree, but in the overall scheme, the impact won't be significant," said William D. Striegl, district manager for J. C. Penney Co. Inc. stores in this area.
"I don't see the same kind of business" developing at the outlet mall as there is in the traditional shopping centers, Striegl said. "It will be the people who have time -- the retired people, those on tour buses, women who do not work, who will use the outlet mall. Busy people who shop because they need something really don't seem to patronize these things. . . . Nobody in their right mind will travel 45 minutes away to see if they could happen to find a pair of pants when they know they will surely find them in a traditional mall."
Striegl also is skeptical about trying to mix traditional stores with outlet shops. "I've never seen them successfully mixed. People who live not too far from there will stop in to see what they have, but to do their principal shopping, most people will still go to the traditional shopping centers."
The reason: Most of the items at the new mall will be closeouts, Striegl said. "Closeouts are closeouts -- they are there for a reason -- consumers wouldn't buy them for one reason or other at other stores. . . . You don't know what's there. Busy people don't have time to do that kind of shopping," he argued.
Potomac Mills officials concede that numerous mall stores will offer closeouts and seconds, some of it relabeled brand-name merchandise. But they also say that the mix of factory stores with regular retailers will provide consumers with a wide range of choices that will make Potomac Mills successful.
"The mall will have everything a traditional mall will have and more," Jon Miller said. "We'll have one-of-a-kind deep discounters selling first-quality goods, a wide range of brand-name selections." Many of Potomac Mills' stores will sell "the exact same products, under different labels, stitch-for-stitch as those being sold" by Woodward & Lothrop, Hecht's and other major local department stores "at far lower prices," he said.
One Potomac Mills retailer, who spoke on condition that he not be identified, said his store will sell closeouts and seconds, in addition to first-quality brand-name goods, "because that's where you are going to make the money. We will have some seconds, but that name 'seconds' doesn't mean a damned thing. Suppose you bought a shirt with no rips or tears but the button holes were just slightly oversize. You wouldn't even notice it. It's still top-quality, it's just a little cosmetic difference."
A spokesman for the Greater Washington Board of Trade said he expects the outlet mall "will become a special destination retail location for infrequent trips by many Washington-area consumers.
"I wouldn't expect it to be a direct competitor with Tysons, Montgomery Mall or more closely located full-service malls because of the travel distance and mix of stores," the Board of Trade spokesman said. Analysts agreed that Springfield Mall, the nearest regional mall, 15 miles north off I-95, will feel the greatest impact from Potomac Mills.
Karen Afflerbach, a spokeswoman for the Berks County Pennsylvania Dutch Travel Association, said outlet merchants in Reading fear Potomac Mills will have some effect on their sales but expect people still will travel north for bargains.
"It's an experience to go outlet shopping," Afflerbach said. "Ladies who sit at home a lot want to get out, and they will go to Potomac Mills, but many of them will still come up here just for the experience of taking the trip.
"But a mall like [Potomac Mills] probably would siphon off some of our business up here," she said. "We draw people from Virginia, North Carolina and Florida. We get busloads of people from Washington. And most of our [outlet stores] are scattered" in six major complexes, she said.
Lord said Potomac Mills is negotiating with tour bus companies and advertising throughout the region, and expects to draw up to 100 busloads filled with out-of-town weekend bargain hunters.
Jon Miller said Western Development has kept overhead costs low on Potomac Mills by anchoring with independently owned stores instead of traditional department stores, which have a fixed corporate overhead of about 20 percent. Traditional malls give anchor stores all the benefits, Miller said, because it takes perks such as rent discounts and lower sales percentage fees to get them to come to the malls.
"Here, we think we have taken care of those two areas," he said. "We have very, very strong deep discounters that don't have that overhead."
"Economically, we have a strong advantage. By offering the independent tenant a lower cost structure, lower rents, we are making them a very competitive marketing unit. Normally, a regional mall gives everything to the anchor stores and makes up the difference from the independents [in higher rents and mall percentages]. By offering the independents who are between the anchors lower costs, it can allow them to keep their prices lower and offer better-quality merchandise at deep discounts."
In addition, Western Development is using prefabricated mall buildings and keeping exterior frills to a minimum, "preferring to spend the money on the interiors" to keep overhead low, Miller said.
For Prince William County's 171,000 residents, Potomac Mills represents a long-awaited spark for development. Across Smoketown Road from the mall, construction is well under way on Prince William Square, a 247,260-square-foot shopping center anchored by a Bradlees store. And there are two other mixed commercial-office centers planned nearby at Smoketown and Davis Ford roads. According to estimates by Western Development, the mall is expected to generate about $260 million in annual sales, add nearly $8 million a year in sales taxes to state coffers and another $2.6 million for the county, creating more than 3,500 new jobs. Prince William also can expect another $850,000 in real estate tax revenue each year.
Potomac Mills is part of a 400-acre mixed-use development planned by Western and KanAm called Potomac Commerce Center. The $300 million project, scheduled for completion in late 1986, calls for more than 2 million square feet of office, industrial and commercial space and also may have a major hotel and conference center.