U.S. Malls Hope Gyms, Experiences Will Lure Shoppers

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The New York Post


US malls are raising the curtain on their second act.

Fed up with watching their apparel chains, department stores and electronics locations go dark as Amazon steals their sales and traffic, malls from coast to coast are signing leases with entertainment and experiential businesses to woo back shoppers — and the early results are promising.

At mall operator Westfield's Topanga, Calif., property, traffic was up 3.6 percent through the early part of 2017 from a year earlier after it added YogaWorks, Kate Hudson's Fabletics and Total Woman Gym + Spa.

On one hand, the malls are starting to give American consumers what they want — experiential activities. Across the US, spending on apparel and electronics is down while cash spent on hotels, dining and travel increased.

Also, malls seem to be learning how not to get steamrolled by Amazon.

"Mall owners are trying to sell something that you can't buy at Amazon," said Joshua Stein, a New York City real estate lawyer who represented one such experiential business, called Gloveworx, in its Westfield lease.

Gloveworx is a boxing studio founded by Leyon Azubuike, a former US national heavyweight boxer. He likes that his business is helping bring people back to malls.

"I never imagined that I'd be part of the rebirth of a shopping center," Azubuike told The Post last week.

Two-year-old Gloveworx will be opening a second location in Westfield's Century City shopping center in October near an Equinox gym, SoulCycle and the first Eataly food market in California.

"We have a serious commitment to this category of fitness," Westfield's David Ruddick, executive vice president of leasing, told The Post. "It's everything from the fitness studio to the shake you have afterwards."

Westfield is spending $9.5 billion to redevelop its 35 shopping centers by 2020, adding so-called outdoor lifestyle centers to some of its traditional malls and filling them with spas, yoga studios and new restaurant concepts.

Gloveworx is not anything like the gritty boxing gyms in Philadelphia where Azubuike honed his skills growing up. About 85 percent of its members are women — who might be inclined to shop at Bloomingdale's after their workout — and "no one is getting punched in the body or face," Azubuike said. The gym offers mostly conditioning and training.

Another experiential chain being wooed by malls is Punch Bowl Social, a nine-store restaurant chain that offers bowling, table tennis, pool, arcade games and karaoke.

It is doubling its footprint over the next two years as mall developers like GGP, Simon Properties and others fall in love with the Denver chain.

Plus, the 25,000-square- foot restaurants can take up a good chunk of space as big box stores pull up stakes. In November, Punch Bowl Social moved into a former Nordstrom store at Simon Properties' Circle Centre Mall.

"We are one of the first phone calls to be an anchor tenant in these lifestyle centers," said the chain's chief executive, Robert Thompson. "They come to us early and put us on their tenant lists to get others signed on."

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July 24, 2017


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