Cyberspace mall start-up asks developers to join in

In appeal to foes, also says retailers can profit

May 28, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

LAS VEGAS -- Jason Lippman has just spent the past few days trying to sell his company's concept of an Internet mall to those who should hate the idea the most: the people who build, manage, lease space and sell goods in the nation's shopping centers. Inc., an Austin, Texas-based start-up that bought the rights to the name six months ago, says its idea is like no other out there in cyberspace.

The e-commerce site, says Lippman, the company's chief financial officer, will remind shoppers of the regional malls they know so well, complete with anchor department stores, a movie theater, video arcade and food court.

"Mall developers see this as a threat," said Lippman, who used to advise high-tech start-ups as a consultant with Arthur Andersen. "Developers have said, `You guys are going to put us out of business.' "

But Lippman has spent the past week here at the International Council of Shopping Centers convention trying to convince developers, leasing brokers and retailers that Internet retailing in general, and in particular, will help everybody's business.

For retailers -- especially those who already sell via their own Web sites -- it will provide merely another channel for selling, he says.

Unlike other mall-oriented Web sites, does not plan to link to retailers' Web sites. Rather than pushing cybershoppers to other sites, will pull information from retailers' sites and has developed technology for managing product descriptions, pricing inventory and order placements.

In the e-commerce version of rent, the retailers would pay a commission of 10 percent to 20 percent on any sale.

"They won't pay us anything unless they sell," Lippman says.

That type of arrangement will make shopping simpler and more convenient for the consumer, who will not need to jump from site to site to visit several merchants, said Jack Taylor, a company spokesman.

"You're bringing the cash register to the [Internet mall] exit, rather than at the store," he said.

The developer's part in all this would be to act as leasing broker and help sign the Internet mall tenants, who says will be a limited number of recognizable names, with anchors, just like in a physical mall.

Other features would include a "food court" -- most likely links to a pizza delivery service or other food service -- and the ability to download DVD videos or movies at the "cinema."

Why include such features?

"What we're trying to do is to apply the retail model to the Internet in a way that makes sense to shoppers," Taylor says.

Whether the idea makes sense to retailers remains to be seen. Lippman said no final deals have been reached with any retailers, though the company is in negotiations and expects to be online with the venture later this year.

The company, which was incorporated in October, recently closed an initial private placement offering of about $3.5 million in investments and short-term options.

Eventually, would like to develop additional regional mall sites, possibly by working with local developers to build a Boston.Mall.Com or a, which the rights to the name would permit, Lippman said.

Brokers who attended a reception the company sponsored had mixed reactions about the long-term effect of Internet retailing and sites such as

Claudia Adler, a senior sales associate at Latter & Blum Inc. Realtors in New Orleans, said shopping over the Internet has drawbacks.

You can't see the product you're buying, she said, and for some people, it will never replace going to the mall.

But a broker from Atlanta said he believed Internet retailing would eventually become the preferred form of shopping. "This is the future," he said.

Plenty of retailers -- and even developers, such as Baltimore-based Prime Retail Inc. -- agree that cybershopping is at least as important to them as traditional retail.

Prime Retail, which owns 50 outlet centers nationwide, is working on starting an Internet outlet mall of its own later this year, Abraham Rosenthal, chief executive officer, said yesterday.

"We think e-commerce will be part of our business," Rosenthal said. "Some people view it as a threat. We look at it as an opportunity."

Pub Date: 5/28/99

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