Towson Town Center probably didn't have the best timing yesterday when it unveiled a new luxury wing featuring a Burberry apparel store and plans for Louis Vuitton and Lacoste amid an economy that continues to falter.
Shoppers faced with declining stock portfolios, job losses, devalued homes and less access to credit presumably have little room in their budgets for $600 purses and $1,000 coats. Retailers across the country have shut their doors as shoppers spend less.
And General Growth Properties, the owner of Towson Town and several other regional malls, has said debt problems exacerbated by the economic climate could force it to sell assets or even the whole company.
"I can't think of a worse a time" to open high-end retail, said Geoffrey Mackler, a principal with retail brokerage H&R Retail.
But mall executives, who acknowledged that the weak economy has affected consumers, said they believe the new 110,000-square-foot, 32-store addition fills a void for the Baltimore region's affluent shoppers. Some of the retailers opening in the new wing will bring their first stores to the Baltimore area. Shoppers now travel to Tysons Corner and Pentagon City in Virginia or Mazza Galleria in Chevy Chase for pricey pumps and handbags.
"If we had a crystal ball to look at where we would be today, we would have still followed our merchandising strategy," said Lisa Bisenius, associate general manager for Towson Town Center.
Sales at the mall increased about 2 percent in August, the latest figures available, according to Towson Town General Manager Charles Crerand. And mall executives believe the Baltimore region can support such high-end retail for years to come.
Retail analyst David Fick said mall owners do not have the ability to time upgrades, expansions and renovations to the economy. Sales at the new stores might not meet expectations during the first year because of the recent slump, but owners believe that in the long run the investment will prove worthwhile.
"General Growth created a lot of value in the upgrade, but it will take a little longer than hoped to be realized," said Fick, an analyst with Stifel Nicolaus who follows General Growth. "For the first time, Towson Town is the full-on luxury center that the high-end shopper in this region is looking for."
General Growth began looking to lure in more upscale brands after a luxury retailer told them it wanted to locate to the market, Bisenius said. The mall company began doing its research and found that the demographics could support high-end retail.
