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The Summer Season: As Tourism Recovers, Travelers Hit the Malls

America is in the middle of its annual summer migrations, and the good news for retailers is that many tourists have their credit cards out.

America is in the middle of its annual summer migrations, and the good news for retailers is that many tourists have their credit cards out.

Store and mall executives at vacation spots from Nantucket to Hawaii and Miami to Minneapolis report tourist business has improved this year over last, despite the general retail doldrums. With the war in Iraq, continued fears of terrorist attacks, the weak dollar and SARS, most Americans still favor domestic travel to venturing overseas. And while the weak economy might mean the overall tourist numbers are down, at least those who are visiting are shopping, especially for fun items.

Maybe it’s because of the weather. The month of June was a washout in many weekend beach areas, for example, sending shoppers to the malls. July was a slight improvement, which may have put consumers in a summer shopping mood at last and generated better-than-expected same-store sales. As reported, same-store sales in July registered some of the best gains in more than a year, driven by price promotions and improved weather. The first 10 days of August have seen the promotions continue while the weather — at least on the East Coast — has returned to gray skies and torrential rain. Perfect conditions for consumers to hit the malls to get ready for back-to-school?

Time will tell. Meanwhile, here is a spot check of the retail business being done at some vacation destinations around the country.



NEW ENGLAND

Spring’s chilly showers kept tourists away from New England’s famous coast in June, but the brighter and warmer temperatures in July brought them back. The so-far damp squib of August could result in a dismal conclusion to summer, though.

“Certainly, weather hurt us this spring,” said Tracy Bakalar, executive director of the Nantucket Island Chamber of Commerce. “Nantucket is one of those communities with short-term bookings. Many people don’t decide until Monday if they’re coming out for the weekend, and with the meteorologists warning about bad weather — and being wrong half the time — it’s been tough.”

The one upside, she continued, is inclement weather helps retail and restaurants. “It’s the classic catch-22. Fewer people, but the people who were here were spending.”
The tiny island — as famous for its weathered shingles and windswept beaches as for its well-heeled populace — gets about 350,000 visitors from June through September. After a surge in the late Nineties, the island’s numbers have flattened, Bakalar said.

“Because so many of our visitors are ceo’s of major companies, our economy generally coincides with the national economy,” she said. An uptick in sales of multimillion-dollar homes has her hopeful for a second-half recovery.

Karen Golov, owner of Eye of the Needle on Nantucket, said the island is quieter this season than in years prior. Customers are looking for fun values, rather than high-end buys.

“Quite frankly, when the economy is bad, my store does even better,” she said. “They’re not buying designer labels as much, but anyone can buy a $40 belt or a cute new handbag.”

She’s done well with girly-prepster lines such as Milly, Rebecca Taylor and the new line, Dr. Boudoir. “Always girly for us,” she said, describing the store’s merchandise. “We passed on cargo, and we’ll pass on Mod this fall.”

Golov has a second Eye of the Needle on Newbury Street, Boston’s unofficial runway and one of the city’s major tourist attractions for its shops, restaurants and string of art galleries. Performance there has been “consistent,” she said. “It’s been harder since we lost all the European kids after 9/11, but we always have the Beacon Hill ladies who come to spend.”

Intermix’s Keledjian, who has an Intermix door on Newbury Street and other major tourist destinations besides Miami, said Boston’s international business is distinctly off, but the historic city seems to be drawing domestic travelers interested in patriotic sites like the Freedom Trail.

Novelty miniskirts — festooned with ruffles or rigged with cargo pockets — did well for him. Business is “improving” after “several rough months with the very cold spring,” Keledjian said.

A couple of hours up the coast, traffic through outlet mecca Freeport, Maine, has been “all over the board,” said Catherine Glover, executive director of the Freeport Merchants Association, representing 150 area businesses.
“Unlike the coastal beach areas, we love rainy Saturdays and Sundays. That’s when we see our record crowds,” she said. However, the rain — or economy — has made locals hold off booking hotels until the last minute and scout for deals.

But even nasty weather couldn’t prevent Canadians from capitalizing on a weak dollar. They’ve come across the border in bargain-hunting droves, Glover said. “Canadians have become a very prime demographic for us.”

At L.L. Bean — whose 24-hour, 120,000-square-foot emporium anchors Freeport’s retail — July transactions were “in line with expectations, about even this July to last,” said a company spokesman. The big improvement came about 18 months ago, when he estimated the region cast off its post-9/11 slump.

Despite doing a brisk business in heavyweight rain gear in June, spring sales overall were off, he added.

“We count on good weather in early spring to get people into the mind-set to book a trip,” he said. “With summer so slow to arrive, people tended to postpone. It’s only in the last few weeks we’ve seen things come back.”



NEW YORK

No doubt the most devastated by Sept. 11, 2001, and ensuing terrorism fears, New York City tourism has seen a pickup in the past year, according to retailers and NYC & Co., the city’s official tourism and marketing organization.

Macy’s has seen “a definite increase” in international shoppers, especially from Japan and other parts of Asia, as well as from Europe, compared with last year, a company spokeswoman said. Many Asian shoppers are finding their way to the Herald Square flagship, after watching New York Yankee Hideki Matsui play at Yankee Stadium, the Macy’s spokeswoman said.

They and other tourists are passing by the flagship’s visitors’ center for information about Broadway shows and restaurant reservations. They’re also presenting their passports to get a special discount card for shopping at that location.

Macy’s current bestsellers include miniskirts, cargo pants, American Rag vintage-looking T-shirts and sweatshirts. Any sportswear or accessories imprinted with initials; fine watches and fashion styles, and travel bags from Phat Farm and Timberland are other top performers.
Saks Fifth Avenue has seen sales improve in the second half, with window displays of pre-fall merchandise helping to draw in shoppers, a Saks Fifth Avenue spokesman said. Celine black and white optics and Marc Jacobs miniskirts are among the eye-catching items. Carolina Herrera’s exclusive separates in jacquard are also a hit, the spokesman said.

Saks also has seen sales climb in areas popular with summer travelers including Hilton Head and Charleston, S.C., Beverly Hills and Pasadena, Calif., and Boca Raton and Palm Beach Gardens, Fla., the spokesman said.

Stefani Greenfield, co-owner of Scoop, with locations in New York and Florida, has seen an upswing in tourists in the company’ SoHo store, as well as more pedestrians roaming around downtown looking at New York City maps.

She added that hotel guests account for 50 percent of the shoppers at her store in The Shore Club Hotel in Miami, where sales are running 30 percent ahead of last year. Visitors from Europe and Central America have been checking out the store, whereas shoppers in Scoop’s East Hampton store tend to be from New York or Los Angeles.

Scoop introduced fall merchandise July 4, the earliest it ever has. Juicy Couture cashmere $188 V-neck sweaters and $195 turtlenecks, Joie $145 camouflage cargo pants, Development $185 miniskirts and Diane Von Furstenberg $298 dresses are bestsellers. In one recent week, the East Hampton store sold 12 units of a Prada Sport $1,350 down coat with a shearling lining.

NYC & Co. projects 35.9 million people will visit Manhattan this year, a slight increase compared with last year’s estimated 35.3 million. International travelers are expected to account for 5.4 million of those visitors, with more accents from Germany, the U.K., France and Spain heard on the streets than last summer.

In June, the most recent data available, the city’s hotel occupancy rate reached 79.8 percent compared with 77.3 percent the previous year. More importantly, this marked the largest gain in more than two years. With the economy picking up, favorable exchange rates for foreigners here and pent-up demand for travel, the city should see additional tourism gains later this year, said Cristyne Nicholas, president and chief executive of NYC & Co.
Macy’s, Nicole Miller and other retail members of NYC & Co. report they are beginning to see a turnaround, according to Nicholas.

John Fox, senior vice president for PKF Consulting, a firm that specializes in hospitality, tourism and real estate, said he expects the U.S. dollar’s weak exchange rate overseas to bode well for New York tourism in the coming months. Domestic travelers are more inclined to stay domestic, while international travelers are more likely to visit the U.S. to take advantage of the euro’s strength.

Based on hotel executives Fox speaks with regularly, there is also a resurgence of business travelers.



HAWAII

Sleeveless silk tie tops have been the top seller at Tommy Bahama in Oahu’s Ala Moana shopping center, according to manager Deron Tongpalan. Second to the tops, which retail for $85, are silk cardigan and shell sets. “It’s wedding season, so women are looking for entire weekend wardrobes,” he said. While it’s Tommy Bahama’s first summer in the Ala Moana location (the sole Oahu location opened in September; there are two doors on Maui), Tongpalan had previously managed the neighboring Guess store and said he’s noticed an increase in mall traffic over last summer and since the war and the SARS outbreak this past spring. “We have a lot of Asian visitors, so SARS really hurt us, as well,” he said, adding that the majority of visitors are still from the continental U.S.



ASPEN

Upscale shoppers continue to descend on tony Aspen, Colo., according to one of the area’s top retailers. “Traffic and business are ahead by double digits — sales are going through the roof,” said Heidi Semrau, owner of Distractions, a designer store in Aspen.

“Moods are elevated compared to earlier this year and last summer. We’re hearing shoppers talk about their renewed enthusiasm and positive outlook for the economy. Women are spending money on designer fashions.”

Among the summer bestsellers at Distractions are items and ensembles from Proenza Schouler, Balenciaga, Lucien Pellat-Finet, Tuleh, Roberto Cavalli, Paul Smith and Alabama, plus jewelry from Marie-Helene de Taillac, Kimme Winter and Tom Binns.


LAS VEGAS

In Las Vegas, one of the hottest (literally and figuratively) tourist destinations for summer, capri pants and matching tops by Tori Richards, Tommy Bahama and Surya have been top sellers at Lido Beach Shop in the Venetian Hotel, according to store manager and buyer Norma Casarez.

“Even though October is the best time to come to Vegas, summer is always the busiest time,” she said, noting that business is up by 10 percent over last summer, when Sept. 11, 2001, scared many tourists from flying. Lido’s clientele is 50 percent American, 25 percent Asian and 25 percent European — mostly women in their late 20s. Last year, long dresses were Lido’s most popular item, but this year, there has been so little interest in long that Casarez canceled all her orders. Instead, knee-length pareos, worn as either swimwear or sportswear, are popular. “I’m doing really well with sarongs by Marue and Gertz,” she noted. “One woman just bought 10; she told me she’s hooked.”

At the fashion-forward Capri boutique in the Bellagio Hotel, anything by Juicy Couture, but especially the terry track suit, is by far the most popular item, just like last year, when the store first picked up the line. Next are the shrunken polo shirt from Izod and entire lines from Miss Sixty, Theory and Max Studio. “The store was a bit more misses’ last summer, but this past spring, we turned it about 85 percent contemporary and it’s been on fire,” said Nicole DeNapoli, associate ready-to-wear buyer for MGM Mirage Properties, which operates boutiques for all the hotels in its group, including the Bellagio, MGM Grand, Mirage, Treasure Island, Golden Nugget and New York New York locally. “Last summer was more about novelty items and tops from various lines, but this year, it’s really about the entire collections, and we’re buying deep into several lines,” she said.



SOUTHERN CALIFORNIA

San Diego’s balmy climes were in hibernation longer than retailers would have liked, giving the beachside metropolis a sluggish summer start. The prickly economy hasn’t helped business, either.
“This is the slowest it’s been since I opened more than three years ago,” said Barry Kellman, owner of Un Un (pronounced “union”) Clothing in the Gaslamp Quarter, a 16-block corridor of shops, restaurants, galleries and clubs downtown.

The tourist trade is on a par with last year, he said, noting traffic is steady from the convention center located about three blocks away. But most visitors aren’t splurging. American Apparel blanks are the biggest seller at Kellman’s boutique, which also stocks Gsus, Miss Sixty, Paul Frank Industries and Rebecca Miller handbags. Spaghetti-strap tanks, tracksuits and yoga pants in white, black and red retail from $15 and up.

At Pacific Beach, the relaxed surf community where habitués and tourists alike bike, skate and walk the Strand, the draw for shoppers was comfortable clothing. Even swimsuits were a hard sell to tourists, who mostly hailed from Arizona, Colorado and the Western region of the U.S., according to Shannon Carman, buyer at Pacific Beach Surf Shop.

“Bathing suits aren’t moving,” Carman said. Instead, shoppers were sticking to board shorts and rash guards from Water Girl, Rip Curl Girl and Hawaiian line Huihine.

Boutique owner Robin Corson, however, wasn’t complaining. The owner of Robina Apparel and Accessories in the upscale village of La Jolla said the worst of times was last year.

“It was disastrous last year, but this year, it’s been much better,” she said. “We’re starting to see increases and we’re ahead 15 percent compared to 2002.”

She said her 600-square-foot Tuscan-style store, which stocks labels Trina Turk, Nanette Lepore, Burning Torch, Rozae Nichols and denim brands, attracts a strong repeat tourist business from all over the country. Their fashion choices this year border on casual eclecticism, pairing Red Engine or Ya-Ya jeans with asymmetric knit tops by Rozae Nichols or Burning Torch vintage cotton and recycled-cashmere T-shirts.



FLORIDA

Bal Harbour Shops in Miami, ranked the top retail center in the U.S. for sales per square foot at $1,350, undoubtedly skirts summer doldrums. Foot traffic remains the same as last summer, according to Cheryl Stephenson, director of marketing. What’s different is who’s meandering through its lush corridors of palms and ponds.
“We’re seeing more tourists from Mexico, Argentina and Brazil than during the last two summers. Since 9/11, more Midwesterners are coming, too,” she said, listing New York, the Northeast and California as the three biggest sources of shoppers overall.

Stephenson reports even affluent customers are more hesitant to spend, however, except when buying limited-edition items. “Shops sell more high-ticket than moderately priced things,” she said.

Designer houses concur.

“It’s not that our customers care about the price, but they already have a closet full of black suits. They want novelty now,” said a spokesman for Roberto Cavalli.

South American and European tourists are scooping up three-quarter-length jersey dresses in animal and rose prints, cashmere halter tops with suede and leather inserts and studded saddle bags. “Americans generally come during the [winter] season, whereas people from abroad fly here to shop now,” he said, estimating sales increases of 40 percent from summer 2002.

Wendy Kahn, general manager of Celine USA, said customers are no longer looking for an entire look. “Things are more item-driven than last summer.”

She reports an increase in domestic tourists, citing uncertainty and bad exchange rates as key reasons. “Americans are choosing to stay home or spend more time at their second homes,” said Kahn. Though traffic has decreased, sales at the Bal Harbour store are expected to exceed 2002 by more than 25 percent.

Oxygene boutique’s tourist base escalates from 50 to 70 percent of its business in the summer, according to manager Roma Cohen. “Most of the South Americans who have second homes here come in July and August,” he said, noting those consumers are generally more daring about color and embellishment. He cited Voyage’s rock-star looks with chains, rips and crosses; Stella McCartney’s pink suits, and John Galliano’s Asian chiffon dresses as bestsellers.

Meanwhile, in South Beach, which has seen an uptick in year-round residents and South American tourists, the summers aren’t nearly as slow as in the past.

Intermix, which has a store on Collins Avenue, has experienced a 20 percent increase in sales over last summer, according to owner Khajak Keledjian.
Keledjian reports August is the hardest retail month, though the store draws loyal locals from South Miami to Aventura, Fla. They and South American tourists are picking up cargo pants and color, but, he said, customers are more careful about spending. “It has to be something special,” he said.

Bestsellers include silk jersey tops by Stella McCartney for $385, “lake” wash jeans by Seven for $145 and silk chiffon dresses by Catherine Malandrino for $425 to $455. Aside from clutches and gold jewelry, a hot accessory is Ice-Tek’s heart-shaped, diamond watches for nearly $2,000.

A few blocks north on Lincoln Road, Chroma is running through summer basics like Errol swimsuits, Citizens of Humanity jeans and Tiffany Alana cotton skirts with vintage brooches. Priced at $350 or less, accessories also tide the store over until the season begins. The most popular are tri-gold earrings by Lana Unlimited and Buddha chandelier earrings by Cameron Cohen.

Most tourists are Northerners. “We’re not seeing the same amount of Europeans this summer, and South Americans usually head straight for Bal Harbour Shops or Merrick Park,” said owner Bonnie Engelstein.

Pia Saralegui, manager of Debbie Katz South Beach boutique, also reports a dropoff in South Americans. “We used to get lots, but it’s difficult for them to come now because of the poor exchange rate,” she said.

Naples, no longer viewed as a sleepy place for retirement or a second home, is maturing into a real community and a year-round shopping hub, said Debi Debenedetto, tourism sales and marketing manager for the area’s Convention and Visitors Bureau, who added, “We expect leisure business to exceed 2002’s sales,” at which time hotel occupancy averaged 60 percent in the summer and more than 200,000 visitors came, according to Research Data Services.

Garnering half its business from tourists, Sassy Boutique projects sales increases of 20 percent for July and August. “Our numbers went up for May and June, and we expect similar results for the rest of summer,” said co-owner Tammy Theoharis.

There was a slight decline in European shoppers, yet traffic from second-home owners has picked up significantly, she said. “They come and go now from Kentucky, Ohio and Chicago, especially over long holiday weekends.”
More minis, denim and monogrammed tops are selling this summer. Other hot items are cropped drawstring pants and tube tops by Susanna Monaco for $64 to $92, pieces in a retro lattice print by Trina Turk for $168 to $202 and cotton pencil skirts with grosgrain-ribbon belts by Ruth for $127.

Marissa Collections, a designer store, has strong sales of Cynthia Rose’s jackets reworked in vintage Chanel fabrics at $1,000 to $1,700, and Miu Miu’s cotton minis with leather trim and toggles averaging $300. The store was already focused on fall clothing in July and ships merchandise to clients who summer elsewhere.

“Business has been healthy despite the economy. Being a resort mecca, Naples is safer,” said manager and buyer Julie Hussey, adding sales are on a par with last summer.



MALL OF AMERICA,

Bloomington, Minn.


A tough economy isn’t stopping shopping at Mall of America, where overall traffic is up against last summer. However, international tourism has fallen this summer to 4 to 5 percent of total traffic, compared with 6 percent prior to Sept. 11, 2001, owing to fears of terrorism, the Iraq war and the SARS threat earlier in the season. The greatest number of international shoppers come from the U.K., followed by Canada, Sweden, France, Ireland and Japan.

Still, for every 10 visitors to Mall of America, four are tourists, making the sprawling 4.2 million-square-foot megamall one of the nation’s top tourist attractions.

Mall of America attracts nearly 43 million visitors yearly. With 520 stores, the mall attracts more visitors each year than Disney World, the Grand Canyon and Elvis Presley’s Graceland combined.

A mall spokeswoman said shoppers seem to be in an upbeat mood and are already purchasing lots of back-to-school apparel — there’s no sales tax on clothing in Minnesota.

Marketing tactics to bring traffic to Mall of America include “Shop ’Til You Drop” and “World Vacation” travel packages offered by KLM Royal Dutch Airlines and Northwest Airlines, among others. Mall of America is owned by Simon Property Group, Teacher’s Insurance & Annuity Association and Triple Five Corp.
More minis, denim and monogrammed tops are selling this summer. Other hot items are cropped drawstring pants and tube tops by Susanna Monaco for $64 to $92, pieces in a retro lattice print by Trina Turk for $168 to $202 and cotton pencil skirts with grosgrain-ribbon belts by Ruth for $127.

Marissa Collections, a designer store, has strong sales of Cynthia Rose’s jackets reworked in vintage Chanel fabrics at $1,000 to $1,700, and Miu Miu’s cotton minis with leather trim and toggles averaging $300. The store was already focused on fall clothing in July and ships merchandise to clients who summer elsewhere.

“Business has been healthy despite the economy. Being a resort mecca, Naples is safer,” said manager and buyer Julie Hussey, adding sales are on a par with last summer.



MALL OF AMERICA,

Bloomington, Minn.


A tough economy isn’t stopping shopping at Mall of America, where overall traffic is up against last summer. However, international tourism has fallen this summer to 4 to 5 percent of total traffic, compared with 6 percent prior to Sept. 11, 2001, owing to fears of terrorism, the Iraq war and the SARS threat earlier in the season. The greatest number of international shoppers come from the U.K., followed by Canada, Sweden, France, Ireland and Japan.

Still, for every 10 visitors to Mall of America, four are tourists, making the sprawling 4.2 million-square-foot megamall one of the nation’s top tourist attractions.

Mall of America attracts nearly 43 million visitors yearly. With 520 stores, the mall attracts more visitors each year than Disney World, the Grand Canyon and Elvis Presley’s Graceland combined.

A mall spokeswoman said shoppers seem to be in an upbeat mood and are already purchasing lots of back-to-school apparel — there’s no sales tax on clothing in Minnesota.

Marketing tactics to bring traffic to Mall of America include “Shop ’Til You Drop” and “World Vacation” travel packages offered by KLM Royal Dutch Airlines and Northwest Airlines, among others. Mall of America is owned by Simon Property Group, Teacher’s Insurance & Annuity Association and Triple Five Corp.