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December 28, 2009 5:58 PM

Business, Fashion, Retail

Betting Big on a Luxury Rebound

The gambling references made in the run-up to CityCenter's grand opening in Las Vegas are too numerous to count, but there's no irony lost in the fact that Bobby Baldwin, the megaproject's plain-spoken but charismatic chief executive officer, won the...

The gambling references made in the run-up to CityCenter's grand opening in Las Vegas are too numerous to count, but there's no irony lost in the fact that Bobby Baldwin, the megaproject's plain-spoken but charismatic chief executive officer, won the World Series of Poker in 1978.


A self-described "card player from Oklahoma," with his own Wikipedia entry (one that features Seventies-era pictures of Baldwin at the Vegas card tables), he quipped at the mega-project's opening ceremonies: "It's hard to believe you can get all this for only $8.5 billion."
The 67-acre development was a Herculean effort fraught with delays and cutbacks. The  developers, MGM Mirage and Dubai World, almost went broke while trying to get the project completed over about six years.


One thing CityCenter hasn't been short of is hype.


The Vdara hotel opened first, drawing Orlando Bloom, Rosario Dawson and Miranda Kerr, as well as Eva Longoria Parker and celebrity stylist Jennifer Rade. But some aspects of the facilities weren't quite ready for prime time -- a lack of working phones and plumbing issues affected more than a few rooms.


The Aria hotel and casino followed about two weeks later, with ceremonies attended by fellow casino owners George Maloof and Sam Nazarian, designer Monique Lhuillier and Cirque du Soleil founder Guy Laliberte, as well as celebrities like Priscilla Presley.


The Crystals -- the opulent 500,000-square-foot luxury shopping mall that's home to brands such as de Grisogono, H. Stern, Tourbillon, Kiton, Paul Smith and Tom Ford -- launched in time for some holiday shopping, and is now about 40 percent occupied.


More doors will open next year, including Hermÿs, Versace, Ermenegildo Zegna, Miu Miu and Prada. CityCenter executives also are in talks with Tod's.


Giovanni Mattera, de Grisogono's director and vice president, North America, observed of the center: "It's luxury done in an artistic, tasteful way that Vegas has never had before. Brands want to be in here, it's just a matter of when the customers will come to shop."


That's the $8.5 billion question, especially since the opening comes after a perilous period for luxury retailers, and a difficult time for Las Vegas, which has suffered a drop in tourism, rising retail vacancy and unemployment rates and the highest home foreclosure rate in the U.S.
"I have a great job and can afford to shop, but I could never justify spending $10,000 or $15,000 on a bag when so many people I know have lost their jobs and could lose their homes," said tourist Cherie Jeffers of Arizona, who was checking out the Crystals earlier this month.


The developers of CityCenter and other resort operators in Las Vegas are betting big that, in the long term, a slow turnaround in the economy will pay off.
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