Leading Retail's Renaissance

December 20, 2019

Originally published by WWD Studios

Macerich's Scottsdale Fashion Square is redefining the upscale shopping experience via a compelling mix of retailers, brands and experiences.

Located in one of the fastest-growing luxury markets in the world, Scottsdale Fashion Square serves as a destination where upscale shoppers can experience exclusive-to-market luxury retailers, in-demand contemporary and experience-centric brands and world-class dining as well as fitness and wellness.

At 2 million square feet, Scottsdale Fashion Square features over 200 shops and restaurants and is positioned as a premier shopping destination. Here, Michael Guerin, senior vice president of leasing at Macerich, shares insights into the first phase of the center's luxury renovation, what makes shopping centers compelling for customers and why the top brands have chosen Scottsdale Fashion Square to showcase their wares.

WWD Studios: What was the impetus behind the remodel and expansion of Scottsdale Fashion Square?

Michael Guerin: Adding value to well-positioned retail properties is in Macerich’s DNA, and a big reason why our properties continue to be sought after and highly productive platforms for retailers and brands. Scottsdale Fashion Square has long served as one of the nation’s retail powerhouses and the region’s undisputed luxury leader, with an unparalleled mix that draws mil¬lions of visitors annually.

The definition of what a shopping center means and brings to a community – in the minds of retailers as well as shoppers – has changed. We are acting on a generational opportunity to amplify the success of Scottsdale Fashion Square by capitalizing on our retail magnet, a heritage of smart growth and proven execution, a dynamic and robust marketplace, and highly motivated brands that want to put their best representation forward.

The two most significant luxury conglomerates, LVMH and Kering, both have multiple brands positioned within Scottsdale Fashion Square. The perfect synergy exists to not only drive the ultimate consumer experience, but also to represent the retail renaissance and transformation for what shopping centers of this caliber should be.

We are constantly refining and curating our canvas with the best luxury brands – often with their only location in the region – flagship presentations by retailers, elevated food and beverage choices that target all day parts, fitness and well-being, art and artistry, coworking, and purposeful mixed-use densification.

WWD Studios: How would you describe the luxury renovation process?

M.G.: After more than two years of development and construction, the updated luxury wing debuted in November 2018. We met with community leaders and stakeholders to design the ultimate mix of uses for the entire campus and secure the right entitlements – particularly for future high-rise offices, the upcoming Caesars Republic Scottsdale luxury resort, and footprint into more productive real estate.

Importantly, we collaborated with some of the best luxury CEOs in the world to thoughtfully define an environment for their ultimate success at our property. It took a huge commitment – from us as well as the retailers – to invest in new stores, relocations, and aesthetic changes befit¬ting the best address for shopping and one-of-a-kind experiences in Arizona.

From beautiful new finishes and premium materials, furnishings and resort-level amenities, plus a new entrance flanked with thoughtful food and beverage experiences, we delivered what we promised, recognized by our retail partners and a vibrant response from the customer.

WWD Studios: What are some of the elements that make Scottsdale Fashion Square a success?

M.G.: When a landlord and a retailer can meet eye to eye on a vision, and each brings their “A” game, this is the end result. Ultimately the customer wins. The property has delivered more and better luxury in an exclusive-to-market luxury retailers, such as Bottega Veneta, Cartier, Escada, Gucci, Jimmy Choo, Louis Vuitton, St. John, Saint Laurent and many more.

Scottsdale Fashion Square is on the cutting edge of adding exciting, complementary new uses to its luxury-forward retail line-up – from first-to-market dining attractions and Arizona's first Equinox location to a fresh art concept, Wonderspaces.

The redevelopment included reinventing the former Barneys department store space into two marquee uses – a stunning, new all-glass Apple flagship store plus a new coworking space with Industrious right inside the mall. The Industrious opening earlier this year generated the company’s best-ever grand opening occupancy.

Already, we’re seeing strong momentum on the consumer side – the centers’ sales per square foot moved from $1,032 before the redevelopment to $1,472 now.

Something else that has been essential is the trust retailers have that we’ll do what we promise. We are a premier, pure-play, high-end mall REIT that delivers on our commitments.

WWD Studios: Can you explain the collaborative process with retailers and brands during the remodel and expansion? What made it work? How important is having a shared vision?

M.G.: The world’s top luxury brands know their customer better than anyone, and the customer experience is not just within a store – it’s everywhere you touch in the entire property, from the moment you park your car to the grand sense of arrival, to being able to enjoy a delightful meal, to amenities like resort-level restrooms and eye-pleasing, comfortable sitting areas.

Retailers’ input is woven into each component of the redevelopment and we have mutual confidence in executing on the vision we created together.

WWD Studios: What role does having the “right mix” of retail and dining play at Scottsdale Fashion Square?

M.G.: The “right mix” means we’re considering all day parts, the different demographics and psychographics we attract and giving our guests the best for all occasions. You need a little “something for everyone” for retail, dining, and lifestyle to be successful together.

Restaurant headliners certainly drive appeal and traffic. On par with great retail names are some of the exceptional dining concepts we’ve attracted, including the state’s first Nobu, opening next year, Giada De Laurentiis’ only namesake restaurant in Arizona also coming to Scottsdale, a polished Ocean 44 and the immersive Toca Madera, which brings an exciting Hollywood dining concept to the property.

We think having destination, market-exclusive dining attractions is an essential complement to world-class retail offerings, today more than ever.

WWD Studios: Can you explain the importance of store design in making Scottsdale Fashion Square a compelling destination? Can you give examples?

M.G.: Several brands – Gucci, Cartier, Louis Vuitton, Saint Laurent, Toca Madera, Nobu, Ocean 44, lululemon, Salvatore Ferragamo – visited the center and made the decision to move forward with their very best brand presentations. The center showcases best-in-class, unique and differentiated aesthetic presentations from retailers, just as we delivered with the overall ambiance of the center.

Great design evokes emotion and that is what the customer wants to experience and feel on their journey. Each brand should stand out and excite a consumer, draw them into their location, and ultimately deliver a unique experience that has them coming back for more.

WWD Studios: What role do art, music and live activations play in the overall luxury shopping experience?

M.G.: The new wing at Scottsdale Fashion Square includes custom artworks created for us, and this is in keeping with the singular experience shoppers will find there. And we have engaging programming that is tailored for our customers – from designer runway and trunk shows to curated celebrations of beauty, food, sports, music and culture in and around the center.

Additionally, the center is now home to Wonderspaces, a breakthrough experience offering changing, world-class art exhibits that debuted its first permanent location in our center.

Scottsdale Fashion Square and our retailers are also involved with community and philanthropic events that are important to our customers including the Phoenix Open, Barrett-Jackson Collector Car Auction, Cactus League Spring Training and the Bentley Polo Championships.

WWD Studios: How would you describe the Scottsdale Fashion Square consumer? What brands and what sort of shopping experience are they expecting?

M.G.: In a region where shopping has always been a favored pastime, Scottsdale Fashion Square is the dominant shopping destination, bar none. With top-performing Neiman Marcus and Nordstrom stores plus the many luxury shopping and dining attractions of the new wing, Scottsdale is a magnet for people looking for top names and top experiences.

The amount of commerce done within this center clearly positions it as the epicenter of retail within a 250-mile radius.

That being said, the consumer expects uniqueness. Differentiation. Quality. Iconic and trusted labels as well as trendy, up-and-coming new brands and comfort and ease at every turn. Our thoughtful, texturized merchandising plan is seeded with the full gamut of offerings – luxury, contemporary, experiential, digitally native and great dining – that together deliver the rich variety our customers expect.

WWD Studios: How would you de-scribe the Scottsdale market?

M.G.: One of the fastest-growing in the U.S, this market has a number of strengths, including an increasing tech presence, but also its longstanding visitor credentials and world-class resort infrastructure. From sales of top-end homes and even growing facilities to accommodate private jets to some great basics – very strong household income and employment numbers – Scottsdale and greater Phoenix combine as an amazingly buoyant market and luxury destination.

We have a mature customer who potentially owns a second home, drawn by climate and prestige. We also attract a younger, upwardly mobile, tech-savvy customer, drawn by the amazing lifestyle and the rise in tech jobs.

WWD Studios: How would you describe “mixed-use” today? How important is it for consumers to live, shop, work (coworking), play and dine within a single, more defined market?

M.G.: “Mixed-use” today needs to be in line with what people want in their ultimate live-work-play environment. Being able to deliver on all elements – retail, food and beverage, hotel, working, wellness – in a single location that is immersive, convenient, unique, and productive to our daily lives is the future of top retail destinations.

Scottsdale Fashion Square is at the forefront of incorporating exciting mixed-use – with the successful Industrious already creating day-long energy, the upcoming Caesars Republic Scottsdale, and, in future phases, plans for residential units and class A office space. For well-positioned properties like Scottsdale Fashion Square, the evolution to this array of uses is well underway.

WWD Studios: Will Scottsdale Fashion Square continue to evolve? What’s in store?

M.G.: Absolutely. Scottsdale Fashion Square is positioned to continue to offer more to more people, and to build on the synergies that already make it Arizona’s leading retail property. For Macerich, creating engaging, market-dominant properties that offer more to more people – like Scottsdale Fashion Square – is the path to continuing appeal and performance.

We are always investing in our properties and focusing on their continual evolution. One arena where Macerich stands out in particular is sustainable operations. Macerich has earned Nareit’s prestigious “Leader in the Light” award every year from 2014-2018. For the fifth straight year in 2019 Macerich achieved the number 1 GRE SB ranking in the North American Retail Sector, among many other environmental accomplishments. We believe this commitment to sustainability matters to our customers and brand partners more than ever, and we are pleased to be our industry’s leader in this essential effort.

So you see, it takes all these disciplines, and a sharp focus on details big and small, to ensure that our trophy properties – including Scottsdale Fashion Square – continue to define excellence in retail real estate for shoppers and the world’s finest brands.

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