Nation’s largest off-price mall opens in NE Philadelphia

Nation’s largest off-price mall opens in NE Philadelphia – Franklin Mills shopping Center

Richard C. Halverson

Nation’s Largest Off-Price Mall Opens in NE Philadelphia

PHILADELPHIA — If the soft opening of Sears Outlet store is any indication, the grand opening of the Franklin Mills off-price mall here May 11 suggests that another success is in the making.

Sears registered about 9,000 transactions the day it soft-opened its 103,000-square-foot store in Franklin Mills, manager Peter Matheson said. It was Sears’ most successful opener, he said.

The new Sears unit, which handles closeouts and overstocks for both Sears catalog and regular stores, is one of a chain of 110 Sears Outlet (formerly called surplus) stores. It and a closeout unit of JCPenney are two of five anchors for the 1.8 million-square-foot mall of retail surplus, factory outlet and off-price specialty shops.

Last year, the most profitable and highest volume Sears Outlet, Matheson said, was the one in Potomac Mills mall, south of Washington, D.C., the first of what is shaping up as a national chain of off-price malls developed by Washington-based Western Development.

In addition to Potomac and Franklin Malls, Western is building a 2 million-square-foot mall, Sawgrass Mills, outside of Fort Lauderdale, Fla. Moreover, Western is developing similar malls outside of Chicago, Detroit and Ontario, in Southern California.

As an indicator of success, Western is expanding Potomac Mills by 50 percent to match Franklin Mills’ 1.8 million square feet.

Braving drizzle and downpours, tens of thousands of shoppers flocked to opening festivities of what was to be an 11-day grand opening for Franklin Mills and the first day of shopping in the first round of stores to open.

Western is opening Franklin Mills in two stages. The first involves about 100 of an eventual 230 retail stores, shops and booths in the complex that sprawls for 3,400 linear feet.

When fully operational, Franklin Mills mall should generate sales of $350 million to $400 million, predicted Howard Biel, Western vice president for development.

In addition to Sears and Penney surplus stores, the other anchors that have opened are Ports, a discount apparel, housewares and giftware chain of Boscov’s Department Stores, Reading, Pa.; Reading China and Glass, a housewares chain also based in Reading; and Phar-Mor, Youngstown, Ohio, a deep discount drug chain.

Western also counts as an anchor the 49th Street Galleria, an entertainment and food complex offering entertainment such as bowling, roller skating, miniature golf and baseball batting cages, as well as various feeding establishments intended to keep customers on the premises for as long as twice the average stay at conventional malls.

Mall Offers Day Care Center

As a further inducement to keep customers around longer, Western is subsidizing a day care center by granting below market rent to the YMCA, which will operate the facility. Mall employees also will be able to use the day care center for the rate of about $100 a week.

Recognizing that that would be a steep rate for employees starting at $5 an hour, Reading China plans its own subsidy for employees, said Todd Johnson, vice president, merchandising.

The Franklin Mills unit will be the sixth for Reading China, Johnson said, and its first in a metropolitan area.

The Franklin Mills unit is the first in the Northeast and 126th for Phar-Mor, which plans to open more than 50 new drug stores this year. Giant Eagle food stores owns 50 percent of Phar-Mor, and accordingly, packaged groceries are a major part of its Franklin Mills offerings. In addition, housewares occupies about a quarter of the 80,000-square-foot store, which is twice the average size for Phar-Mor.

Phar-Mor is known for especially sharp pricing of health and beauty aids.

The 125,000-square-foot Ports store, the fifth for the budding chain, is the first one built from scratch, said Al Boscov, founder and chairman of the 15-store parent chain. Originally called Ports of the World, the chain got started almost by accident in a former Philadelphia bakery that Boscov’s used to make candles and to store imports, Boscov said. Ports got started when Boscov’s used surplus factory footage to sell candles at retail, he said.

The next step was the acquisition of three former Pomeroys department stores in Philadelphia suburbs, he said.

Ports was a “way to sneak into the Philadelphia market without anyone knowing what we were doing,” Boscov said. For Boscov’s to enter the Philadelphia market under its own name would require an investment in 12 stores, Boscov said.

The new Ports features the same type of mirrored ceiling, cut-glass chandeliers and faux marble display glasses that grace Boscov’s department store unit in Harrisburg, Pa.

Franklin Mills expects to draw as many as 15 million visitors a year, and the traffic will benefit Ports, Boscov said. Stores in malls do about 15 percent better than standalone units he said.

The Franklin Mills traffic also should benefit Carrefour, the French hypermarket pioneer next door, Boscov predicted.

Carrefour bought 35 acres from Western for the hypermarket that shares a common entrance road and opened its first American hypermarket in February 1988. Sales have been limping along since at an estimated $60 million a year.

To add to the one-stop shopping offerings, Western also sold 15 acres of a 288-acre former racetrack site to a developer for a home design mall that features a Hechinger home improvement center and a Silo consumer electronics superstore.

Among the factory outlet stores that opened in phase I were Athlete’s Foot Outlet, a unit of F.W. Woolworth’s Kinney Shoes; Bally, the luxury shoe manufacturer from Switzerland; Bugle Boy; Puma; Windsor Shirt; Guess; Van Heusen; and St. Eve., operating under the name Intimate Eve to avoid offending department store customers.

Some 25 discount stores, such as Jamesway, Bradlees, Caldor, K mart and Clover operate within a 10-mile trading radius of Franklin Mills.

Off-price retailers that opened include T.J. Maxx, Bed, Bath and Beyond, Modell’s (sporting goods) and The Original I. Goldberg which specializes in military surplus goods, camping gear and athletic apparel and footwear.

In Phase II, about 130 more establishments will open over the next year, including Filene’s Basement, set to begin business in August.

PHOTO : Discounting in Philadelphia got a major boost with the opening last month of stage I of

PHOTO : Franklin Mills off-price mall.

PHOTO : Opened a month before Franklin Mills’ grand kickoff, this Sears Outlet store enjoyed the

PHOTO : most successful debut in the history of the company’s surplus division.

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COPYRIGHT 2004 Gale Group