Consumers are coming back in force, motivated by “revenge buying” and “retail therapy” and having more money to spend.
By Russ Wiles | Arizona Republic
As retail sales climb and consumer visits increase, many of Arizona’s top shopping centers have shuffled their lineups of stores — making room for hot luxury brands and online retailers that need storefronts while weeding out large department stores and other tenants with lagging prospects.
With fewer new shopping centers opening, especially in built-up areas like much of metro Phoenix, mall operators are playing a game of musical chairs. And when the music stops, some slower-moving brands are left out.
“Retailers are back, and they have an even greater hunger for space,” said Thomas O’Hern, CEO of Macerich, the company that owns Scottsdale Fashion Square, Kierland Commons, Chandler Fashion Center, Arrowhead Towne Center and most of the other large enclosed malls around the Valley. “We rejoice when we get department store space back.”
Speaking in Scottsdale during a recent investor conference, O’Hern and Macerich’s president, Edward Coppola, described a scenario where sales are rising, especially among luxury retailers, while rents, leasing activity and occupancy levels are gaining ground, too.
The conference was sponsored by Phoenix-based Smead Capital Management, which owns Macerich shares among its stock-market holdings. Smead considers Macerich stock undervalued, partly because investors looking at surging online sales assume that all brick-and-mortar locations are suffering.
Instead, consumers are coming back in force, motivated by “revenge buying” and “retail therapy” and having more money to spend, O’Hern said. That trend is gaining steam as the most restrictive shutdown precautions of the pandemic recede and places like metro Phoenix, with a year-end jobless rate of 2.4%, near full employment.
“We’re very well-positioned for great gains coming out of the pandemic,” he said.
