When Minnesota`s new super-sized Mall of America opens to the public next week, the area`s leading department store retailer, Dayton`s, won`t be among its all-star lineup.
The mall, just outside Minneapolis in Bloomington, is a 4.2 million-square-foot retail and entertainment complex. With a projected total of 350 stores, a seven-acre theme park smack in the center plus movie theaters and restaurants, the center is the country`s largest shopping mall and the second biggest in the world behind the West Edmonton Mall in Edmonton.
In addition to the 300-plus stores, the center is anchored by four major department stores. Of which, three-Nordstrom, Macy`s and Bloomingdale`s-are new to the Minnesota market. The fourth, Sears Roebuck and Co., is opening what many expect to be its most upscale and fashionable store in the country.
But one of the most noticeable things about this retail megaproject is the absence of Minneapolis-based Dayton`s.
Dayton`s is owned by Minneapolis-based Dayton Hudson Corp., whose department-store division includes Marshall Field & Co. and Detroit-based Hudson`s department stores. The corporation also owns Mervyn`s and Target Stores.
Its absence is notable because in this part of the country, the words Dayton`s and department store have long been synonymous.
Dayton family patriarch, George D. Dayton, started the retail company in the early 1900s. Over the decades the retailer`s influence spread beyond its immediate markets of Minneapolis and St. Paul, to other areas of the Upper Midwest, in Wisconsin and Iowa, where it later opened stores, and as far north as the Dakotas and Winnipeg.
These are the same regions from which the developers of the new Mall of America will have to pull if the center is going to meet its extremely optimistic sales projections, which figure into the billions.
So why isn`t Dayton`s there?
The simple answer is it didn`t want to be. A more complicated explanation is found in the maneuverings that went on behind the scenes in the nearly five years it took to build the mall.
Since the project was first proposed, it has been viewed by Minnesotans as more than ”just another shopping mall.”
That`s because initially, the project was a very hot political item. The original development proposal called for the use of state funds to offer tax incentives to assist the Canadian developers, Triple Five Corp. of Edmonton in their building efforts.
From the first, this talk of a tax break riled Dayton`s officials. The retailer was very active in joining others, who for various reasons, opposed this megamall.
The project, a joint venture of Triple Five and Indianapolis-based Melvin Simon & Associates, eventually was built with funds provided by Bloomington, which owns the 78 acres on which the new mall sits-the site of the old Metropolitan Sports Stadium.
Dayton`s was one of a number of retailers around the country asked to consider locating in the mall. Dayton`s officials wanted no part of the project.
And though the mall is now a reality, it`s clear from talking with Stephen E. Watson, Dayton Hudson Corp. president and head of its department store division, that the retailer still isn`t keen on the super-mall idea.
For one thing, Dayton`s officials don`t think this much retail space is needed in the Twin Cities area. They question the notion that unlike some areas of the country, the Twin Cities market has too few stores, particularly those offering high-fashion apparel.
Critics say the retailer has simply been trying to protect its turf.
For years, the Twin Cities market was known in retailing circles as
”DaytonTown.” And it`s said that the retailer`s dominance scared off many retailers considering entering the market.
Watson dismisses this as nonsense.
Instead, he says Dayton`s beef with the new project was and continues to be the role government played, or what he calls ”the public policy issues of the project.”
The retailer was concerned, he said, ”about public funds being made available to allow competitors to come in here for nothing,” which does not make ”for a level playing field.” (Bloomington lent money to Minnesota so it could issue bonds for road construction around the project.)
Developers of the Mall of America originally planned to open it at least two years ago. Their goal was shot down by the bottoming in the retail industry in late 1988.
The new mall`s delay gave Dayton`s something it couldn`t have bought:
time.
And it has used the time well.
While the Mall of America was being planned, Dayton`s built larger and much more high-fashion stores at its flagship location in Southdale Center, the nation`s first enclosed mall, in the Minneapolis suburb of Edina, and at Rosedale, in the St. Paul suburb of Roseville.
It has been reported that the new construction at Southdale and Rosedale cost more than $100 million.
Dayton`s also did extensive remodeling and expansion at its suburban Burnsville store and spiffed up the exterior at the downtown Minneapolis store.
(It should be noted that while Dayton`s department store is not in the new mall, one of its sister company stores is. Target Stores, the ”upscale” discount store operation, is launching a test of a new apparel concept called Every Day Hero, offering clothing for men and women. Watson notes that this is a separate operating division. Dayton`s has no plans to go into the new mall, he says.)
The renovations included widening store aisles and adding more selling space to various departments ranging from men and women`s apparel to shoes. Fine woodgrains and imported marble add an air of elegance to the stores.
There`s been a noticeable upgrading of customer service, too, with little touches to make the shopper`s buying trip more comfortable. More than a few of these new offerings also can be found at newcomer Nordstrom, which like Dayton`s has long had a reputation for customer service. There are larger dressing rooms with call buttons for store clerks.
It also introduced upscale ”extras” Nordstrom regulars will find familiar.
Walk into the downtown Minneapolis store and you`ll notice the elegantly dressed pianist sitting at the black baby grand. A classy sight? You bet. It`s also a trademark at Nordstrom stores around the country.
Dayton`s also has been playing what it knows is a trump card newcomers can`t match: the loyalty factor.
Not the kind of loyalty that ties shoppers to one brand name over another, but the personal loyalty one might feel for say a relative or family friend.
What few people outside the Twin Cities can appreciate is just how ingrained Dayton`s is to Minnesota life. For Minnesotans, the name is synonymous with more than just a place to shop.
That`s because Dayton`s has also built a reputation for community service. In the mid-1940s the retailer began a policy of contributing 5 percent of its pretax earnings to local community charities. Its giving program has become a model for the philanthropic industry (no other retailer in the country makes that type of commitment). And it also has become a model and a must for newcomers in the area.
And while the local Minnesota media have been playing up the arrival of the retailing giant, Dayton`s has been running ads in various Twin Cities media, reminding the hometown folks of the role this home-grown business has played in their lives.
Still it`s going to take more than good feelings to help Dayton`s win what many in the industry predict will be one of the fiercest retailing battles of this decade.
The reason, they say, is that for a mall as big as the Mall of America to succeed, somebody in that market place has to lose.
Dayton`s knows this, says Watson. And, he says, the retailer is ready for the battle.
”Obviously, it`s going to increase competition. It will cause a reconfiguration in the market place,” he says. ”When you add this much retail space, this quickly, you will have an impact. And it will cause hardship, especially for small retailers.”
Dayton`s hasn`t been the only retailer preparing for the new competition, said Richard Guidera, a veteran Twin Cities retail consultant. Throughout the Twin Cities, a number of retailing centers have undergone renovations in anticipation of the coming competition, he said, noting the entry into the market of Saks Fifth Avenue and Neiman Marcus.
”We have to do everything we can to convince shoppers to stay with us,” said Watson. He dismisses predictions that the new mall is going to bring in a huge influx of new shoppers to the area.
”They talk about new dollars. I think most likely we`ll be trading dollars,” Watson said.
”It`s going to be very difficult,” Watson acknowledged. But, he said,
”we don`t expect to give up our business easily.”
