SOUTH PORTLAND — Retailers hope the arrival this week of Bon-Ton Stores Inc. as an anchor tenant at the Maine Mall will increase foot traffic and sales at the shopping center, but sluggish retail sales nationally and competition from online shopping sites are likely to keep diverting customer spending from traditional department stores.
Those stores are banking on cosmetic changes in the stores and features such as customer service and high-end brands to bring in shoppers, especially in time for the peak holiday shopping season.
The arrival of the York, Pa.-based chain puts the Maine Mall, which has more than 1 million square feet of retail space, at 100 percent capacity, which is unusual for regional malls. Nationally, the vacancy rate at malls hovered at 8.6 percent in the fourth quarter last year, according to real estate research firm Reis Inc. That compares with an 11-year high of 9.4 percent in the third quarter of 2011 and a low of 4.9 percent in the second quarter of 2001.
Nationally, the outlook for retail sales has been lackluster. Retail sales in August were weak for the usually lucrative back-to-school season, the second-biggest shopping period of the year behind the winter holidays.
For the nine U.S. retail chains that reported August sales for stores open more than a year, sales rose 2.9 percent, falling short of Wall Street expectations.
Karen Pelletier of Portland said she knew Bon-Ton was opening soon because she had seen advertisements on city buses around town, but said she didn’t plan to make a point of stopping by to check out the new store.
“I try shopping online mostly. I don’t window-shop,” Pelletier said. “Sometimes you want to touch and feel something, so it’s good to come in person. But I often use technology to find a cheaper price.”
The growth in retail sales in South Portland, where the Maine Mall is located, has outpaced sales growth for the state as a whole, said James McConnon, a professor of economics at the University of Maine.
In 2012, South Portland consumer sales rose 4.5 percent from 2011, while general merchandise sales rose 4 percent. That surpassed statewide growth of 3.3 percent in consumer sales and 2 percent in general merchandise sales, McConnon said.
In the first six months of 2013, both consumer and general merchandise sales in South Portland rose 4.8 percent versus the same period a year earlier. That compared with the state growth of 2.7 percent in consumer sales and 1.5 percent in general merchandise sales in the same period, McConnon said.
“South Portland has been performing very well as a retail community. That Bon-Ton wants to be part of this indicates that they think they can generate sales,” McConnon said.
Bon-Ton is set to open Thursday, filling the site vacated by Filene’s in 2006. It will join Macy’s, Sears and J.C. Penney as the mall’s anchor tenants.
“We’re always looking for opportunities, and the Maine Mall itself was a draw. To have a mall with 100 percent occupancy is pretty rare these days,” said Alton Walker, vice president and regional store director for Bon-Ton.
Walker admits the store has yet to carve out an identity in the state. The Maine Mall location is its first in Maine and the name and brand are still unknown here.
“People don’t know what a Bon-Ton is. I’ve heard everything from candy store to Chinese restaurant,” Walker said.
Marybeth Ford of Brunswick had a typical reaction to the news that Bon-Ton was opening. She said she’s not a frequent mall shopper.
“I don’t come often. I didn’t even know Filene’s was gone,” Ford said. “I’m not a big consumer.”
The store has high expectations to meet. The Maine store’s opening follows a lower-than-expected earnings report and trimmed financial guidance by the parent company on Aug. 22. That prompted Zacks Investment Research to downgrade Bon-Ton’s stock to “strong sell.”
Other new arrivals at the Maine Mall include The Paper Store, as well as food establishments such as Qdoba and Charlie’s Grilled Subs. A Clarks shoes and accessories store also recently opened. Home goods store Pier 1 Imports is scheduled to open in mid-October. Pier 1, which had previously been in Portland until 2005, already has a location in Augusta.
The area around the mall has also seen recent growth in retailers. Nordstrom Rack, the outlet division of upscale retailer Nordstrom Inc., opened its first location in Maine this spring. Seattle-based Nordstrom opened the 30,000-square-foot store at Maine Crossing Shopping Center, near other name-brand tenants such as Target, Bed, Bath & Beyond and Men’s Wearhouse.
Having more stores opening in the area benefits everyone, Walker said.
“Anything that makes the shopping experience better is good for all of us,” he said. “It’s an issue of convenience. You want to get the biggest bang for your buck in terms of money and time – you want to have a destination that makes it worth your time to go shopping. It’s very good for South Portland not to have this location vacant anymore.”
The new Bon-Ton boasts wide aisles, bright lighting, extra-large dressing rooms and seating areas, part of a trend toward making the shopping experience customer-friendly.
“It’s not the way stores were built 20 years ago. There used to be a trend toward narrow aisles and filling as much retail space as possible with merchandise. Now, we try to listen to what people want and balance our needs and expenses,” Walker said.
Bon-Ton – French for “good tone,” meaning proper fashion or style – will sell a mix of higher-end designer lines such as Calvin Klein and Michael Kors, as well as moderate-priced brands such as Dockers, and a mix of its own brands.
Bon-Ton plans to tweak its products as needed, after feedback from customers.
“We know we’ll start out with a bang because we’re new, followed by the holiday shopping season.
Then we may need to tailor the assortment from what we initially offer after we hear from customers,” Walker said.
The 120,800-square-foot store will carry clothing, cosmetics and home goods. The chain also operates stores elsewhere in New England, including Concord, N.H., South Burlington, Vt., and Westfield, Mass.
McConnon said the arrival of a new shopping experience is likely to generate some interest and foot traffic in the short term.
“It has a diverse product offering and a wide customer base, so it fills many different demographics,” said McConnon. “It’s going to get a lot of interest. People will come just to see it and hopefully that will spill over into increased traffic and spending throughout the mall.”
Macy’s Inc., which operates about 840 department stores nationally and is a direct competitor, isn’t worried about the arrival of Bon-Ton, said Macy’s district vice president Phil Wilson.
Macy’s recently rearranged some departments to streamline customer traffic through the store, but that was routine, Wilson said.
“We’re not going to make any changes because of a new guy in town. The changes have nothing to do with Bon-Ton,” he said.
“We are the premier retailer at the mall. We’ve built our reputation on what the Maine customer wants,” he said. “We’re always looking for opportunities to make small changes, small investments, new vendor shops, new brands. You’ll continue to see routine upgrades.”
Bon-Ton will have about 170 employees at the new store, and plans to increase that to 200 workers for the peak holiday shopping season.
Walker said the Maine Mall location isn’t under extra pressure to perform well – all the stores face pressure.
“Everyone is trying to find the right balance between expenses and controlling costs and making sales,” he said. “Everyone talks about Filene’s and they have such passion in their voice. It’s inevitable that they will compare us. We’re hoping everyone gives us a shot and tells us what we can do to make things better. We don’t want to assume we know the answer or what everyone wants.”
Jessica Hall can be contacted at 791-6316 or at: