Monday Jan 31 2011
Galleria stores choose to close, relocate or wait
By: Lien Hoang, The Press Tribune
Tenants want lower rent for lower mall traffic
The day of the Galleria arson, DeVons Jewelers store manager Robert Hewitt was across the street at the Fountains. While some were hoping to get back in the mall within hours, Hewitt prepared for the worst by scouting out a temporary rental space. “At that point I didn’t know what would happen, but it didn’t look good,” Hewitt said last week. He didn’t know that the Oct. 21 fires would gut his store, which lies almost directly beneath the flames’ origin at GameStop. But, with all merchandise intact, DeVons reopened 52 days later at the Fountains so as not to lose their customer base in the area. “It was a fairly quick decision,” Hewitt said of DeVons’ move in the interim until a possible return to the mall in the summer. To date, 154 businesses have reopened inside the Galleria, out of an original 240. With phone numbers rerouted, abandoned or disconnected, the remaining businesses are exploring a variety of options – from reopening elsewhere, as did DeVons, to reassigning employees to nearby stores, to permanently closing, like DuFault’s Beauty Boutique. Jeffrey DuFault’s salon was among the first batch of mall businesses to reopen a week after the arson. Originally opening its doors July 16, the new boutique was DuFault’s third (one remains in Roseville; the other was sold in El Dorado Hills). But profits plummeted after the fires, forcing DuFault to cut his losses and close up shop. Customers just weren’t coming anymore, and the young salon didn’t have years of financial backing to weather the storm. “When the fire hit, it just took the wind out of us,” DuFault said. Even many who plan to return have a common hurdle: renegotiating their leases. Han Huynh, who owns the Tuttimelon yogurt shop at the mall, said he’s just started the first stage of rebuilding. But behind the scenes, he is also in discussions with Westfield – which owns the Galleria – to alter his contract to reflect the lower traffic flowing through the shopping center. Westfield would not disclose traffic numbers, saying through a public relations firm that before-and-after comparisons would be “impractical and inappropriate,” given the portion of the mall still closed. But estimates from tenants suggest there are one-fourth to one-third fewer shoppers there today than average because of the fires. Though Huynh had no complaints about his earlier lease, he said the decrease in business should be roughly proportional to a decrease in rent. “There’s always room for improvement,” he said. He has not paid rent while the shop has been out of commission, and insurance has kept a half-dozen Tuttimelon employees paid as they await reopening. Huynh guessed traffic would return to normal by the end of the year, based on a full reopening of the Galleria, possibly by late summer. Westfield declined to discuss tenant agreements, citing confidentiality interests. But mall officials convened last week to evaluate construction progress, in hopes of soon inviting media on site to publicize a new stage of developments. If and when that happens, stores like DeVons likely will still be planning their comeback. Hewitt said it took just a week and a half to set up at the Fountains, while reconstruction at the mall would take a couple months, possibly starting in June. “Most customers really love the location,” he said of the Fountains, which DeVons has tried to promote through fliers, newspaper postings and word of mouth. “It’s beautiful here. But the bottom line is, the amount of traffic isn’t the same as at the mall.” Lien Hoang can be reached at email@example.com.