Can a New Mall Make It in 2020? | BoF Professional, The Week Ahead

THE CHEAT SHEET

American Dream Finally Opens

• American Dream, a 3-million-square-foot shopping and entertainment complex in New Jersey, opened for retail on Oct. 1
• The opening was pushed back six months by the pandemic, the latest in a long series of delays stretching back to the mid-2000s
• Capacity limits and other Covid-19 precautions will make it difficult, if not impossible, to hit attendance and revenue targets

American Dream, a megamall/entertainment complex/amusement park nestled among a tangle of interstates in New Jersey’s Meadowlands, is open for business. Again. America’s most ambitious retail development in decades had planned a grand opening for mid-March, but was forced to abandon those plans last-minute as the pandemic descended on the region. The dozens of stores now open include tenants like Zara, Primark and American Eagle (Hermès, Saks and other luxury names are scheduled to open next spring). Temperature checks and social distancing stickers abound, and the pre-pandemic marketing slogan, “explore the unbelievable,” has been replaced by a very 2020 “come dream again.” 

American Dream was a risky proposition even before the pandemic. It takes the latest retail fad – using attractions as a draw for retail – to the extreme. But whether people will swing by the shops after a round of mini golf or a dip in the wave pool remains to be seen. Placer.ai found traffic at indoor malls was down sharply this summer, though shoppers who did venture into stores spent more. American Dream must also follow New Jersey’s Covid-19 restrictions, including limiting crowds to 25 percent of capacity. Those caps will almost certainly prevent developer Triple Five from hitting the 4 million annual visitors it projected when borrowing $2.7 billion to build the facility. 

The Bottom Line: American Dream has cash reserves to keep lenders happy through at least early 2022, The Wall Street Journal reported earlier this year. But that could start to look tight if a vaccine isn’t promptly available.

Make-or-Break Market Week

• Brands showed their collections to buyers in Italy last week, and will do the same in Paris this week
• The pandemic has made it harder to predict retailers’ budgets for 2021
• Many brands, particularly smaller, independent labels, need strong orders to keep their businesses open

Market week is even more important than usual this year. Brands forced to write off 2020 are counting on big buys from retailers to sustain them another season. At the same time, there’s rarely been more uncertainty about these crucial meetings. Brands couldn’t count on fashion week to build buzz around their collections, and some are experimenting with digital showroom formats for the first time. 

There’s plenty of uncertainty on the retail side as well. Buyers were working under tighter budgets for the fall season, and tended to stick with “safe” brands they knew would sell. Whether that will carry over into 2021 is an open question, though worsening infection rates and a darkening economic outlook surely aren’t helping. 

The Bottom Line: Aside from Sies Marjan and a handful of other brands, a much-feared wave of closures has yet to materialise. What happens during market week will determine whether that remains the case.

Back to Normal at Shanghai Fashion Week

• Shanghai Fashion Week runs Oct. 8-18, with 90 live fashion shows
• Daily life in China has largely returned to normal, even as the US and many European countries struggle to control Covid-19
• The schedule includes designers who in past seasons showed overseas

Shanghai Fashion Week has strived for years to attract international press, buyers and brands. But this year, the focus is squarely on the domestic market. China’s consumer spending, though still down from pre-pandemic levels, has recovered more than other major markets. And travel restrictions mean Chinese fashionistas who once loaded up on couture on trips to Europe are now buying their wardrobes at home. Meanwhile, representatives of international brands are similarly restricted from attending trade shows in Shanghai, giving Chinese brands new opportunities to connect with buyers. 

The Bottom Line: It’s hard to say whether the travel restrictions will present a one-time opportunity for Chinese brands before the international giants return next year, or will lead to a permanent shift.

-Casey Hall contributed to this item

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