Mall musical chairs: How PREIT landed Zara at Cherry Hill Mall

The entrance to Zara, the popular fast fashion retailer from Spain, on opening day at Cherry Hill Mall on Sept. 28.

The powerhouse mall owner Pennsylvania Real Estate Investment Trust seemingly moved heaven and earth to make room for the wildly popular, fast-fashion retailer Zara at its top-tier Cherry Hill Mall.

Well, close.

To accommodate the retailer’s first suburban Philadelphia location (Center City has had a Zara on Walnut Street since 2004), PREIT moved five existing tenants: the apparel retailers Banana Republic and Hollister; the shoe seller Clarks; Call It Spring, which sells shoes, handbags, and accessories; and Aveda, the skin- and hair-care brand.

In addition, the mall underwent a 5,000-square-foot expansion for the coveted brand from Spain.

Those efforts came to fruition Sept. 28, when Zara debuted a 26,000-square-foot store on the first level between Nordstrom and Macy’s. The space is evenly divided between a women’s and kids’ apparel wing and a men’s wing.

“The interesting and exciting byproduct of this was that we, in turn, got new store prototypes and designs,” said PREIT chief executive officer Joseph Coradino. “We, as landlords, often discount relocated tenants as ‘not new,’ but the customer actually sees a new store.”

Hollister’s new design, Coradino said, is sleeker and more contemporary with a more inviting entrance, featuring a large-screen TV and windows showcasing product.

Meanwhile, the new Banana Republic store has an elevated, upscale look and urban feel; Aveda has a larger store with poster-size LED ads on both sides of the entrance; and Clarks’ new location features a more modern design with greatly improved lighting to highlight its merchandise.

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Hollister, in the Cherry Hill Mall, is one of five stores that were relocated to accommodate the arrival of Zara, the fast fashion brand out of Spain, by mall owner PREIT.

This version of mall musical chairs, retail experts say, is playing out nationally as malls fight to retain foot traffic.

“This is something that’s starting to happen more as mall landlords look to strategically place strong retail, restaurant, or entertainment-focused tenants in their malls,” said Garrick Brown, vice president of retail research for the Americas at Cushman & Wakefield.

Phoenix-based consultant Jeff Green, who advises national retailers, said mall developers are leaning toward adding tenants that are least affected by online shopping.

Zara, for instance, “appeals more to the millennial generation,” Green said. “It is about making sure you are offering exactly what your market consumers are looking for.”

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On opening day at Cherry Hill Mall, Joanne Trab, of West Deptford, perused the racks inside the new Zara. The brand is known for updating fashion designs quickly.

PREIT has another tenant relocation in the works for 2018 at Cherry Hill when it adds Intimissimi, an Italian intimates store. PREIT said the move will allow it to relocate the cosmetics store Lush into a new prototype later this year.

Coradino said PREIT had been in discussions with Zara for several years about opening a store at Cherry Hill Mall. An opportunity came up in early 2016 after Uniqlo left the mall.

“After Uniqlo moved out, we had the flexibility in space to shift tenants around to accommodate this new and in-demand retailer,” he said. “The brand is very selective in their real estate … so we always believed Cherry Hill Mall was a natural fit.”

Saba Awan, 30, of Cherry Hill, a full-time homemaker and mother of two young children, was at Zara’s grand opening, pushing her 8-month-old son, Hamza, in a stroller through the kids’ section.

“It’s one of my favorite stores,” said Awan, who has gone to Zara in Baltimore, New York, and downtown Philadelphia. “There are only a select few in our area. It’s trendy and up-to-date and really reasonable in pricing, especially for kids.”

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Saba Awan, 30, of Cherry Hill, is excited to have a Zara so close to home. She had shopped at Zaras in Baltimore, New York and Center City Philadelphia.

Coradino said it was important to create a unique, customer retail experience and stay relevant.

“As the mall and retail landscapes continue to evolve, we view underperforming tenants as an opportunity, and really an advantage, to amass space that we otherwise may not have been able to,” he said.

But Brown at Cushman & Wakefield said changing things up comes with risks and should be executed carefully.

“Moving your existing and often longtime tenants to accommodate new concepts can potentially backfire if done improperly,” he said. “The reality is, that if the leases of those tenants that you want to move still have years left on the term, they need to see some benefit from it.”

Brown said this can include tenant improvements financed by the landlord for a fresher store look, a bigger space at the same rent, or moving the tenant next to another retailer catering to the same demographic so each can feed off the other’s traffic.

Another consideration, he said, was that with some of the larger institutional mall landlords — such as PREIT, which owns and operates malls in nine states along the East Coast, including Plymouth Meeting, Exton Square, and the former Gallery at Market East that’s being redone into Fashion District Philadelphia — a relocated tenant in one mall may seek similar deals at other PREIT properties.

“These deals can get complicated,” Brown said.

So far, the Zara chess move has been positively received.

Last week Rick Sides, 42, a history teacher at Thomas E. Harrington Middle School in Mount Laurel, accidentally stumbled upon the just-opened Zara. He shops at the Walnut Street Zara.

As hip, techno music blared from the speakers, Sides bought a bomber jacket that retailed for $89.90 and a shirt for $49.90.

“The clothes have an urban chic to them,” said Sides, of Medford. “You have a lot of folks coming here by bus or car from Philly and Camden — two urban centers — which I think will be drawn to this type of fashion. This will bring a lot more people to this mall.”

That’s sweet music to PREIT.

Camera icon CLEM MURRAY
A window display at Zara, the fast fashion clothing brand from Spain, on opening day at Cherry Hill Mall. The owner of the mall, Pennsylvania Real Estate Investment Trust (PREIT), made numerous changes to its building to accommodate the needs of Zara.