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The Honolulu Advertiser
Posted on: Sunday, July 1, 2001

Vegas shops cash in with tourists

The Arizona Republic

LAS VEGAS — Josh Hays had just strolled out of the Cutter & Buck store at the Desert Passage mall in Las Vegas when a commotion above him caught his attention.

Toy store FAO Schwarz is among many Las Vegas shops that are competing for an increased share of visitors who would rather shop than gamble.

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A crack of thunder reverberated through the room, and rain began falling from a ceiling made up to look like the sky. Mist drifted over a giant freighter parked in front of Moorish storefronts of the city's latest over-the-top retailing attraction. Hays and other shoppers stopped to gape.

Las Vegas made its reputation as a gambling destination, but Hays and his wife, Jill, aren't interested in placing bets. The newlyweds from Salt Lake City come to Vegas to shop.

"The two of us can spend four or five days here and not even look at a slot machine," he said.

Casinos no longer are the only place to drop a bundle in Las Vegas. The mega-resorts that dominate the city's neon-splashed Strip are locked in an escalating competition to land retailing's most exclusive names and show them off in extravagant environments that re-create ancient Rome, Marrakesh or Venice's canals.

Shopping used to be an afterthought in Las Vegas, with cheesy souvenir shops in corners of the old strip hotels. But the big public companies that run the Strip these days woke up to the potential of shopping to supplement the erratic gambling take.

They've also found that major-league shopping lets them market to a broader, more affluent audience. About 36 million people visit the city every year, many of them conventioneers who stay a few days and splurge.

Shopping, always a top activity for vacationers, has become an even more compelling lure as the major venues ratchet up the spectacle. In Vegas, even window shoppers can take in dueling Roman guards at the Caesars Palace's Forum Shops or idly watch gondolas glide on a replica of Venice's Grand Canal in the Venetian's Grand Canal Shoppes.

Tourism officials say shopping tops the agenda for many visitors. Among the retail names now packing the Strip: Chanel, Armani, Versace and Tiffany.

"The demographic there is unmatched anywhere in the world," said Wally Chester, an executive vice president at Phoenix mall developer Westcor. "Everybody is coming with the mentality that they're going to have a good time. ... There's no aversion to spending their money, so if they see something they really like, they buy it."

Westcor took a couple of runs at a deal to develop a mall anchored by Nordstrom that connected Mandalay Bay and the Luxor. It bowed out, Chester said, as capital demands zoomed beyond the company's comfort zone.

So Nordstrom ran up the street to the Fashion Show mall, a fairly typical regional mall that's in the midst of a 1 million-square-foot expansion designed to leverage its Strip location. With three new anchors on the way, Fashion Show will boast eight major department stores.

"It will be a tremendous amount of retail," said George Connor, a Colliers International broker who specializes in leasing on the Strip.

The signature Vegas hotel-casinos once drew about 80 percent of their operating revenue from gambling, said Rob Powers of the city's convention and visitors authority. Now, he said, the number has dropped to around 50 percent. Executives look more favorably toward retailing revenue, and shoppers are responding.

Between 1996 and 1999, visitors spent an average of $63 per trip on shopping, according to the convention authority. The figure jumped to $94 last year.