weird american mall
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The man-made snow was piling up on the 16-storey indoor ski slope and workers were testing whizzing rides at the theme park. These were some of the surest signs that the opening of the American Dream Meadowlands megamall was finally at hand some 16 years after the star-crossed project was initiated on the New Jersey marshlands, just across the river from Manhattan. We have been here before. “It’s been a very difficult process but we’re reaching the culmination of all our hard work and efforts,” Don Ghermezian, the president of Triple Five Group, the family-owned development company overseeing the project, told a reporter. That was seven years and nearly $3bn ago. Assuming there are no last-minute hitches, the first phase of the American Dream will come to life this Friday with a grand ceremony to kick off the opening of its theme park. That will be followed in the months to come with the christening of North America’s largest indoor water park, the ski slopes and then hundreds of shops and restaurants. Much has changed since the project, originally known as Xanadu, was born in 2003. New Jersey has seen five governors since then. The pastel tiles that prompted one of them, Chris Christie, to call it “the ugliest damn building in New Jersey” have been replaced. The original developer, Mills Corp, dropped out long ago after running into financial trouble. So did its successor, Colony Capital. Triple Five agreed to take control of the project in 2011. Don Ghermezian, president of Triple Five Group, the family-owned development company overseeing the mall project © Patrick MacLeod/WWD/Shutterstock Above all, the shopping mall, once the mainstay of American retail commerce, is under pressure as never before thanks to the rise of ecommerce. Vacancies in US shopping malls hit an eight-year high in the third quarter, according to Reis, a division of Moody’s Analytics, with vacancies at their worst level since the financial crisis. As consumers shop online and department stores buckle, many malls are grappling with a glut of space. It would not appear to be the best of times to open a 3m-square-foot jumbo mall. “This was conceived 20 years ago, and the world has changed a lot for retail since then,” said a well-respected real estate investor. Another questioned whether any department stores, the traditional anchor tenant for shopping malls, would even exist in 10 years. Nor do the mall’s trio of helipads overcome the challenge of luring shoppers from Manhattan to a traffic-clogged corner of New Jersey. “How do you get a large number of people from Manhattan to this property in an efficient way?” asked Vince Tibone, a retail specialist at Green Street Advisors, a property research group. Still, the Ghermezians have not lost their faith in American Dream. They pledged as collateral 49 per cent of the two other megamalls they own — the West Edmonton Mall in Canada and the Mall of America in Bloomington, Minnesota — to secure a $1.67bn construction loan from JPMorgan and Goldman Sachs to realise their vision. A rendering of the ice skating rink © American Dream Their conviction is that so many superlative attractions will make American Dream a destination in its own right. Among them: the world’s largest indoor wave pool, with a 1.5m gallon water park and beach heated year-round to 87-degrees Fahrenheit, a Nickelodeon theme park featuring the world’s steepest rollercoaster, a Lego Discovery centre, a Sea Life aquarium, two 18-hole miniature golf courses, a kosher food hall, an aviary featuring local birds, a KidZania children’s village, a regulation National Hockey League skating rink, and the aforementioned Big Snow indoor ski hill, with two slopes, a chairlift and an Alpine village serving hot chocolate. “We’re thinking a lot of people will do ski vacation prep there,” a guide explained during a recent tour. Soon to come is a London Eye-style Ferris wheel with a view of Manhattan and perhaps a luxury hotel. On their way to those activities, guests will be funnelled past luxury shops, including a two-storey Hermes. “It is obviously a very unique retail property, to say the least,” Mr Tibone observed. The mall earlier this year: eventually it will feature North America’s largest indoor water park, ski slopes and hundreds of shops and restaurants © AP The Ghermezians, a family of Iranian Jews, have a history of defying expectations. The family relocated to Montreal in the late 1950s and entered the rug trade. They quickly expanded their business until, eventually, they were holding auctions all around the US and Canada, including well-attended sessions at the Waldorf-Astoria hotel in Manhattan. (A New York Times reporter who observed one in 1976 described Mr Ghermezian’s uncle, Nader, as “mesmerising audiences of up to 800 with his glib chatter and entertaining chant”.) Drawn by an oil and gas surge in western Canada, the family ploughed their money into thousands of acres of Alberta prairie, eventually opening a mall in 1981 that featured submarine rides and a man-made lagoon. Five years later, after a visit to Minnesota, they set about repeating the trick on an even bigger scale. These days, the Mall of America pulls in more than 40m visitors a year. Recommended Megan Greene Consumers cannot carry the US economy for ever “People didn’t understand [the concept] and thought it would fail,” Mr Ghermezian told Women’s Wear Daily in 2012. American Dream will feature the best of those projects, as well as new baubles for an “interactive” generation. One of the reasons construction was so costly is because the Ghermezians ripped out virtually everything from the nearly finished Xanadu when they took over. But this time the Ghermezians are not building in “middle-of-nowhere Canada,” as one observer put it. Rather, they will be competing for visitors in one of the busiest urban areas in the world. Moreover, New Yorkers and affluent tourists seeking a luxury mall have a brand new palace at the Related Companies’ $25bn Hudson Yards on the west side of Manhattan. It had its own grand opening in March. As if all that were not enough, American Dream is in New Jersey’s Bergen County, where trading regulations — known as “blue laws” — do not permit Sunday shopping. “It’s so big and there’s just no infrastructure to make it work,” one rival developer said of American Dream’s prospects. But, knowing the Ghermezians, he could not bring himself to bet against them: “They have a tremendous will not to fail.”
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In a first for the high-minded management consultancy, McKinsey is opening a retail store and flogging underwear, make-up and jewellery to customers in a Midwest shopping mall. Due to open on Friday in Mall of America, the largest US shopping centre, the outlet is designed to test the effectiveness of new technology that retailers and their advisers could deploy to keep stores relevant in the age of Amazon. Visitors to the mall in suburban Minneapolis will be able to try out gadgets including smart mirrors and software that aims to help them pick the right bra size. Cryptocurrency will be among the payment options. In the background, McKinsey will be crunching data on shopper behaviour. Praveen Adhi, a McKinsey partner, said retail executives were “constantly inundated with pitches, and can struggle to figure out how to get value from all the different technologies out there”. We thought it would be a great way to learn. It’s an interesting example of a consulting firm that’s trying to add value. Heidi Zak, co-founder, ThirdLove He added: “There is no real way, given the speed at which the technology and analytics is changing, to keep ahead of the trends without getting your hands dirty.” A rotating roster of retailers will share space in the store, a near 5,000 sq ft site formerly occupied by Abercrombie & Fitch. Microsoft is among several technology companies involved. Four fashion and beauty brands will take part initially. The line-up comprises jeweller Kendra Scott; type:A Deodorant; Elevé Cosmetics; and ThirdLove, a “body-positive” clicks-to-bricks lingerie company that has been taking market share from Victoria’s Secret. A Kendra Scott jewellery store will be part of McKinsey's Modern Retail Collective © McKinsey & Company “We thought it would be a great way to learn,” said Heidi Zak, ThirdLove’s co-founder. “It’s an interesting example of a consulting firm that’s trying to add value.” Mall of America is not charging McKinsey rent for the space. Revenues generated from the store will go directly to the retailers, which will pay a fee to offset some of McKinsey’s costs. McKinsey does not expect to make money from the venture, which has been branded Modern Retail Collective. Instead, it hopes data gleaned from the project will help improve its understanding of what works in retail and what does not, and so improve the quality of recommendations to clients. “This is a large investment for us,” Mr Adhi said. “The economics of the store itself don’t come close to breaking even. That’s not why we’re doing this.” Recommended Lex McKinsey store: undies study ThirdLove hopes to learn about the optimal level of interaction between shoppers and staff to maximise sales and profits. Both the McKinsey store and its own outlet that opened in Manhattan in the summer allow women to use an app to find their optimal bra size, but there will be fewer employees available to help in the McKinsey outlet. ThirdLove plans to compare the results. It is the latest retail experiment at Mall of America, which also features a theme park, toddler groups and live music concerts. “There’s a lot of change in the retail industry,” said Jill Renslow, senior vice-president of business development at Mall of America. “The key is trying new things, taking risk, and learning from it.”
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The man-made snow was piling up on the 16-storey indoor ski slope and workers were testing whizzing rides at the theme park. These were some of the surest signs that the opening of the American Dream Meadowlands megamall was finally at hand some 16 years after the star-crossed project was initiated on the New Jersey marshlands, just across the river from Manhattan. We have been here before. “It’s been a very difficult process but we’re reaching the culmination of all our hard work and efforts,” Don Ghermezian, the president of Triple Five Group, the family-owned development company overseeing the project, told a reporter. That was seven years and nearly $3bn ago. Assuming there are no last-minute hitches, the first phase of the American Dream will come to life this Friday with a grand ceremony to kick off the opening of its theme park. That will be followed in the months to come with the christening of North America’s largest indoor water park, the ski slopes and then hundreds of shops and restaurants. Much has changed since the project, originally known as Xanadu, was born in 2003. New Jersey has seen five governors since then. The pastel tiles that prompted one of them, Chris Christie, to call it “the ugliest damn building in New Jersey” have been replaced. The original developer, Mills Corp, dropped out long ago after running into financial trouble. So did its successor, Colony Capital. Triple Five agreed to take control of the project in 2011. Don Ghermezian, president of Triple Five Group, the family-owned development company overseeing the mall project © Patrick MacLeod/WWD/Shutterstock Above all, the shopping mall, once the mainstay of American retail commerce, is under pressure as never before thanks to the rise of ecommerce. Vacancies in US shopping malls hit an eight-year high in the third quarter, according to Reis, a division of Moody’s Analytics, with vacancies at their worst level since the financial crisis. As consumers shop online and department stores buckle, many malls are grappling with a glut of space. It would not appear to be the best of times to open a 3m-square-foot jumbo mall. “This was conceived 20 years ago, and the world has changed a lot for retail since then,” said a well-respected real estate investor. Another questioned whether any department stores, the traditional anchor tenant for shopping malls, would even exist in 10 years. Nor do the mall’s trio of helipads overcome the challenge of luring shoppers from Manhattan to a traffic-clogged corner of New Jersey. “How do you get a large number of people from Manhattan to this property in an efficient way?” asked Vince Tibone, a retail specialist at Green Street Advisors, a property research group. Still, the Ghermezians have not lost their faith in American Dream. They pledged as collateral 49 per cent of the two other megamalls they own — the West Edmonton Mall in Canada and the Mall of America in Bloomington, Minnesota — to secure a $1.67bn construction loan from JPMorgan and Goldman Sachs to realise their vision. A rendering of the ice skating rink © American Dream Their conviction is that so many superlative attractions will make American Dream a destination in its own right. Among them: the world’s largest indoor wave pool, with a 1.5m gallon water park and beach heated year-round to 87-degrees Fahrenheit, a Nickelodeon theme park featuring the world’s steepest rollercoaster, a Lego Discovery centre, a Sea Life aquarium, two 18-hole miniature golf courses, a kosher food hall, an aviary featuring local birds, a KidZania children’s village, a regulation National Hockey League skating rink, and the aforementioned Big Snow indoor ski hill, with two slopes, a chairlift and an Alpine village serving hot chocolate. “We’re thinking a lot of people will do ski vacation prep there,” a guide explained during a recent tour. Soon to come is a London Eye-style Ferris wheel with a view of Manhattan and perhaps a luxury hotel. On their way to those activities, guests will be funnelled past luxury shops, including a two-storey Hermes. “It is obviously a very unique retail property, to say the least,” Mr Tibone observed. The mall earlier this year: eventually it will feature North America’s largest indoor water park, ski slopes and hundreds of shops and restaurants © AP The Ghermezians, a family of Iranian Jews, have a history of defying expectations. The family relocated to Montreal in the late 1950s and entered the rug trade. They quickly expanded their business until, eventually, they were holding auctions all around the US and Canada, including well-attended sessions at the Waldorf-Astoria hotel in Manhattan. (A New York Times reporter who observed one in 1976 described Mr Ghermezian’s uncle, Nader, as “mesmerising audiences of up to 800 with his glib chatter and entertaining chant”.) Drawn by an oil and gas surge in western Canada, the family ploughed their money into thousands of acres of Alberta prairie, eventually opening a mall in 1981 that featured submarine rides and a man-made lagoon. Five years later, after a visit to Minnesota, they set about repeating the trick on an even bigger scale. These days, the Mall of America pulls in more than 40m visitors a year. Recommended Megan Greene Consumers cannot carry the US economy for ever “People didn’t understand [the concept] and thought it would fail,” Mr Ghermezian told Women’s Wear Daily in 2012. American Dream will feature the best of those projects, as well as new baubles for an “interactive” generation. One of the reasons construction was so costly is because the Ghermezians ripped out virtually everything from the nearly finished Xanadu when they took over. But this time the Ghermezians are not building in “middle-of-nowhere Canada,” as one observer put it. Rather, they will be competing for visitors in one of the busiest urban areas in the world. Moreover, New Yorkers and affluent tourists seeking a luxury mall have a brand new palace at the Related Companies’ $25bn Hudson Yards on the west side of Manhattan. It had its own grand opening in March. As if all that were not enough, American Dream is in New Jersey’s Bergen County, where trading regulations — known as “blue laws” — do not permit Sunday shopping. “It’s so big and there’s just no infrastructure to make it work,” one rival developer said of American Dream’s prospects. But, knowing the Ghermezians, he could not bring himself to bet against them: “They have a tremendous will not to fail.”
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In a first for the high-minded management consultancy, McKinsey is opening a retail store and flogging underwear, make-up and jewellery to customers in a Midwest shopping mall. Due to open on Friday in Mall of America, the largest US shopping centre, the outlet is designed to test the effectiveness of new technology that retailers and their advisers could deploy to keep stores relevant in the age of Amazon. Visitors to the mall in suburban Minneapolis will be able to try out gadgets including smart mirrors and software that aims to help them pick the right bra size. Cryptocurrency will be among the payment options. In the background, McKinsey will be crunching data on shopper behaviour. Praveen Adhi, a McKinsey partner, said retail executives were “constantly inundated with pitches, and can struggle to figure out how to get value from all the different technologies out there”. We thought it would be a great way to learn. It’s an interesting example of a consulting firm that’s trying to add value. Heidi Zak, co-founder, ThirdLove He added: “There is no real way, given the speed at which the technology and analytics is changing, to keep ahead of the trends without getting your hands dirty.” A rotating roster of retailers will share space in the store, a near 5,000 sq ft site formerly occupied by Abercrombie & Fitch. Microsoft is among several technology companies involved. Four fashion and beauty brands will take part initially. The line-up comprises jeweller Kendra Scott; type:A Deodorant; Elevé Cosmetics; and ThirdLove, a “body-positive” clicks-to-bricks lingerie company that has been taking market share from Victoria’s Secret. A Kendra Scott jewellery store will be part of McKinsey's Modern Retail Collective © McKinsey & Company “We thought it would be a great way to learn,” said Heidi Zak, ThirdLove’s co-founder. “It’s an interesting example of a consulting firm that’s trying to add value.” Mall of America is not charging McKinsey rent for the space. Revenues generated from the store will go directly to the retailers, which will pay a fee to offset some of McKinsey’s costs. McKinsey does not expect to make money from the venture, which has been branded Modern Retail Collective. Instead, it hopes data gleaned from the project will help improve its understanding of what works in retail and what does not, and so improve the quality of recommendations to clients. “This is a large investment for us,” Mr Adhi said. “The economics of the store itself don’t come close to breaking even. That’s not why we’re doing this.” Recommended Lex McKinsey store: undies study ThirdLove hopes to learn about the optimal level of interaction between shoppers and staff to maximise sales and profits. Both the McKinsey store and its own outlet that opened in Manhattan in the summer allow women to use an app to find their optimal bra size, but there will be fewer employees available to help in the McKinsey outlet. ThirdLove plans to compare the results. It is the latest retail experiment at Mall of America, which also features a theme park, toddler groups and live music concerts. “There’s a lot of change in the retail industry,” said Jill Renslow, senior vice-president of business development at Mall of America. “The key is trying new things, taking risk, and learning from it.”
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