Posted on: Sunday, December 26, 2004
Vegas gambled on luxury retail — and won
By Christina Almeida
Associated Press
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| The Gianni Versace store at the Forum Shops at Caesars Palace epitomizes the sort of luxury retail establishment that attract tourists to Las Vegas. A survey found 63 percent of Vegas visitors shopped, only slightly less than the 69 percent who gambled.
Joe Cavaretta • Associated Press |
By CHRISTINA ALMEIDA
Associated Press
LAS VEGAS — When the doors to The Forum Shops at Caesars Palace were poised to open for the first time in May 1992, some questioned whether a mall of luxury boutiques would succeed on the Las Vegas Strip.
Maureen Crampton, the mall's marketing director, heard the skeptics and remembers waiting expectantly behind closed doors and thinking to herself, "I do hope somebody is on the other side."
Crampton need not have worried.
More than a decade later, The Forum Shops is one of the most successful retail centers in the country, and high-end shopping is one of the lures that has helped transform Las Vegas from a one-stop gambling spot into an ultra-luxe destination.
Gucci, Prada and Dior are now neighbors along a gilded stretch of the Bellagio hotel-casino. Neiman Marcus, Saks Fifth Avenue and Nordstrom anchor the expansive Fashion Show mall farther down the Strip. And boutiques like Burberry, Mikimoto and Jimmy Choo dot The Venetian landscape inside the Grand Canal Shoppes.
"Shopping has become an incredible part of the allure of Las Vegas," said Hal Rothman, Las Vegas historian and author.
So much so that shopping tends to be a top draw for the
36 million tourists who visit each year. A survey conducted this summer by MRC Group Research Institute found visitors to Las Vegas shopped (63 percent) only slightly less than they gambled (69 percent).
A visitors profile estimates tourists spent something on the order of $2.9 billion shopping last year.
It didn't use to be that way. Gambling defined Las Vegas.
But when Atlantic City began competing for gamblers and Indian tribes started building casinos, Las Vegas realized that changes were needed. Casino executives discovered that allowing customers to wander away from the gambling floor might be good for business — as long as they kept spending their money onthe hotel property.
Casino hotels became resort destinations, where guests can pamper themselves with a $165 specialty facial, dine on a $60 Kobe beef burger and buy a $1,570 Christian Dior handbag without ever going across the street. Cheap buffets and souvenir kitsch are the rarity, not the norm.
Keith Schwer, director of the Center for Business and Economic Research at University of Nevada, Las Vegas, said attached retail areas make sense.
"If you have millions of people visiting, walking by, all you have to do is capture a small percentage of them to be profitable," Schwer said.
A three-story spiral escalator whisks customers high above the Italian marble flooring at The Forum Shops at Caesars Palace. The Roman-themed mall is such a financial success that at the end of October, its average annual sales reached $1,471 per square foot. That crushes the national average of $345 per square foot in 2003, according to industry statistics.
Researchers discovered Las Vegas had a strong, affluent local customer base, along with an influx of tourists who were fashion-savvy and willing to spend on luxury brand-name goods, said Crampton, who works for Simon Property Group, which owns and manages The Forum Shops.
At the Via Bellagio, which opened in October 1998, an affluent tourist roaming the resort's 50,000-square foot shopping enclave can select a $550 silk Hermes scarf before walking a leisurely few steps to buy a purple python Gucci bag for $2,650.
The Grand Canal Shoppes, which was recently sold by The Venetian hotel-casino to General Growth Properties Inc. for $766 million, spans 500,000 square feet and pulls in just under $1,100 in average annual sales per square foot.
"In many markets, if we have $300 a square foot, we are very, very happy," said Dan Sheridan, executive vice president of General Growth, which owns or manages 225 malls nationwide, including the Ala Moana Center in Honolulu. "$1,100 is outstanding."
When the Wynn Las Vegas resort opens next year, the luxury hotel-casino by industry maverick Steve Wynn will have the Strip's first car dealership — Maserati and Ferrari, of course.
Shops already lined up for the Wynn resort include Louis Vuitton, Manolo Blahnik, Cartier, Jean Paul Gaultier and only the third Oscar de la Renta boutique in the United States.
Pam Danziger, president of New York-based Unity Marketing, said several factors, including accessibility, have helped propel Las Vegas into the top tier of U.S. shopping destinations, behind such Meccas as New York and Beverly Hills.
The retail space tends to be highly concentrateds, allowing visitors to wander in and out of stores in air-conditioned comfort. And the doors are always open and welcoming to casually dressed shoppers, as opposed to the exclusivity of Rodeo Drive.
