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Continued: MOA is working harder for every dollar

  • Article by: JACKIE CROSBY , Star Tribune
  • Last update: July 5, 2009 - 10:38 PM

A floor below the hubbub of retail and rides at Bloomington's Mall of America, Maureen Bausch sits in her basement office and points to a pile of papers on her desk. Each week she makes a half-dozen pitches to try to lure new businesses, events and attractions to the mall.

Her current stack includes a treatment for a reality television show and a pitch to Whole Foods Market to open an organic cooking school.

"I'm sure we could book tours to that culinary center to take classes," said Bausch, executive vice president of business development at the Mall of America. "They'll probably turn me down, but what the heck? We get about a 25 percent return on these things. You learn to live with the rejection."

As the recession grinds on, malls across the country are struggling to bring in traffic. Against that backdrop, the Mall of America is standing relatively strong against the economic headwinds.

"We're not recession-proof -- no one is," Bausch said. "We like to say we're recession-resistant."

While total sales at Mall of America stores have grown 3 to 5 percent a year overall, Bausch said sales last year grew 2 percent. She expects sales to be flat or up 2 percent in 2009, too. Nationwide, sales at mall stores fell 6.5 percent last year, according to Green Street Advisors.

In the Twin Cities, no mall seems to come close to Mall of America's sales per square foot, a key indicator of the health and demographic draw of a mall, as well as the rents it can charge. The national average is about $380 to $390 per square foot. The mall reports sales per square foot of $625, compared with $580 at Galleria in Edina and $445 at Rosedale Center in Roseville, according to the 2009 Directory of Major Malls Inc.

But Bausch and her staff work hard -- and ever more creatively -- to keep tourists visiting and locals shopping. They're traveling to book expos, meeting with Hollywood producers and planning back-to-school promotions for Facebook and Twitter.

Ad campaigns now push value over luxury, and tourism efforts are focused on markets within a day's drive of the Twin Cities. For the first time, the mall has offered money-losing discounts to its Nickelodeon Universe theme park to draw budget-minded families.

And, of course, new stores are an attraction. Since January 2008, generally when the recession began, 51 new stores have opened at the Mall of America, outpacing new store openings in the previous four years. Many of the stores are a retailer's first in the Midwest.

$42 million in improvements

The mall's push to promote itself on multiple fronts is a key reason it is still attracting 40 million people a year, even 17 years after opening, retail experts say.

"It has a different shopping appeal, not only for its sheer size, but for its uniqueness," said David Brennan, a University of St. Thomas professor who co-wrote a study in 2003 that showed that nearly 40 percent of the mall's stores were unique to the region. That compared with about 30 percent at Maplewood Mall and 10 percent at Rosedale Center.

The mall's Canadian-based owner, Triple Five, hasn't cut back on the marketing budget this year, Bausch said. It also has invested more than $42 million in improvements and upgrades in the past three years, most notably the $25 million Nickelodeon Universe, which opened in March 2008.

Unlike the former Camp Snoopy amusement park, which had been operated by an outside company, Nickelodeon Universe is owned, operated and managed in-house. That gives the mall more flexibility to use the amusement park as a draw to the retail, a much different strategy than before.

This spring, the mall brought back a wildly popular holiday promotion in which shoppers who spent a certain amount at stores got free all-day passes to the amusement park.

Ridership is up about 14 percent, according to mall officials, but sales are flat because of the discounting. It's a risky tactic, but one that seems to be working.

"Their challenge is to make themselves relevant in a tight economy," said Howard Liszt, retired CEO of Minneapolis ad agency Campbell Mithun. "You see Twins selling value packages for families, Valley Fair doing deals, the Minnesota Zoo, all these other kinds of street fairs -- the Mall of America competes with all of these family entertainment destinations. They need to really understand the mindset of the consumer, both for shopping dollars and for vacations and entertainment."

The mall is well aware that the consumer is looking for a getaway that doesn't cost an arm and a leg. That's why mall tourism director Doug Killian sees the 25 million people who live within an eight-hour drive of the mall as its "primary opportunity."

But the mall still has 70 travel packages in 32 countries, and 33 Bloomington hotels offer free shuttle service from the airport to the mall.

Joan Lillie, director of sales for Country Inn & Suites, said the partnership with the Mall of America is one she wouldn't think of ending. Her hotel is walking distance of the mall's south side, and the hotel offers guests discount tickets for Nickelodeon Universe, Underwater World and Build-A-Bear (a $104 package worth $150, she said).

Lillie also takes out ads on the mall's e-newsletter, with 80,000 subscribers. "Pretty much within an hour after it goes out, we get a call," Lillie said.

A decade on American Girl

The mall pushes its uniqueness beyond the theme parks, an edge regional malls don't have. It installed motion D-Box seats in its movie theaters earlier this year, and sells wine and beer in some movie auditoriums. It was one of only two theaters to get "Valentino: The Last Emperor."

Then there's the multi-day expos and workshops for scrapbooks, knitting and beading, drawing hundreds of enthusiasts to the mall and nearby hotels.

The marketing staff goes to several book expos a year, with a persuasive track record to show to publishers. It's a bad day when an author draws 50 to 100 people, the minimum guarantee for most book sellers. Some 8,000 people came out to see wrestler and actor Dwayne Johnson -- "The Rock" -- in 2000, and Lauren Conrad signed 900 copies of her new book, "L.A. Candy," a few weeks back.

A one-hour reality show based on the behind-the-scenes life at the Mall of America is supposed to run this October, and at least one more is "in the hopper," said mall spokesman Dan Jasper. House of Comedy opens in July, as will a new ropes course in the amusement park. A new butterfly exhibit is set to open in the old theme park food court in mid-August.

Bausch spent a decade courting American Girl, which opened a two-level store near the amusement park in November. Ditto for the Mayo Clinic, which announced two weeks ago it would open a health care center should the mall begin its planned second-phase expansion early next year.

American Girl put a toe in the water at the Mall of America in 1994, opening a small store outside of Nordstrom with a display, catalogs and phones to place orders. It has just seven stores across the country, but traffic levels at the Mall of America, an estimated 700,000 this year, are 40 percent higher than at the average store, said Wade Opland, American Girl's vice president of retail.

"They've done more for us as a landlord than any other location," Opland said. "The Mall of America markets their exclusivity. And they're able to leverage the exclusive nature of American Girl, which helps us and helps them as well."

Sony Vang, of Fresno Calif., watched as his 3 year-old son, EQ, got his face painted like Spider-Man before heading off for rides at the amusement park. Vang was in town for a soccer tournament but goes to the mall several times a year. It's the variety that brings him back.

"The ladies get to go shopping while we take the kids off for fun," he said. "We don't get bored here."

Jackie Crosby • 612-673-7335

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