The departures of two longtime, locally based retailers from the Galleria in Edina are raising questions about whether the upscale mall has reduced its commitment to local retailers.
Whymsy apparel boutique has already closed at the Galleria, which former owner Gabbert & Beck sold to Hines Global REIT in 2012 for $127 million. Three Rooms art and home furnishings store, a tenant for 33 years, will close by the end of January.
Patty Burrets, co-owner of Three Rooms, tried unsuccessfully to relocate to a smaller footprint within the Galleria, but nothing was available. She feels that the Galleria may have more interest in national retailers rather than local ones.
“I felt pressure that it was tilting toward national retailers,” she said. “[Former owner] Warren Beck was instrumental in keeping the local focus.”
Sargent Johnson, director at Hines Global, said no shift is in progress. In fact, one of the few unoccupied spaces will be taken by Russell+Hazel, a local home office decor store to open in the spring.
More than 25 local retailers, not including restaurants, are staying put, including Len Druskin, Oh Baby, Trail Mark, Twill, Hammer Made, Ampersand, Scandia Down, Pumpz and Fawbush’s. About 40 percent of the mall’s tenants are local.
“We want to maintain the strong emphasis on locals,” Johnson said, “But there is an ebb and flow between 40 and 60 percent, local and national tenants or vice versa.”
Burrets said her store, which was underperforming since 2009, was partly a victim of Pottery Barn and Crate & Barrel, which sell home decor at similar or lower price points. Its exit followed another local store, StyledLife, that left the Galleria last year.
Tom Lauer, co-owner of the Que Sera and Oh Baby retail stores, had a Que Sera location in the Galleria until the previous management and the local owners agreed not to renew leases with Que Sera, A Pea in the Pod and Schmitt Music.
He moved Que Sera to downtown Excelsior, but the Oh Baby location remains open in the Galleria.
“When Warren [Beck] was running it, he was conscious of keeping the local mix, but I can’t get into the head of Hines,” he said. “I don’t know if we can reach any conclusions yet, but I am not concerned.”
The mall has to weave a delicate balance as it tries to nab high-profile retailers that are exclusive to Minnesota before competing malls such as Mall of America snag them. National or locally based, it’s survival of the fittest for any retailer, said Dick Grones, principal of Cambridge Commercial Realty in Edina.
“The local tenants have plenty of pressure from national retailers that want to be there,” he said. “It’s survival of the fittest.”
Grones isn’t convinced that the new Galleria owners are cold to the local retailers. He said that even former owners were ruthless with all their tenants, local or otherwise.
“If you’re not at the top of your game,” he said, “you’re going.”