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Best of Liz Benston

Gaming Guru

Liz Benston

Las Vegas retail renaissance

7 February 2008

LAS VEGAS, Nevada -- Once upon a time, casinos lined sidewalk entrances with slot machines to capture passing gamblers as quickly — and as often — as possible. Or, they created sweeping entrances and grand features — statues, volcanos, pools and gardens — to suggest what opulence awaited inside.

But with more Strip customers these days preferring to spend their money on things other than gambling, there's a new strategy. Casinos are pushing shopping and dining — and putting those activities front-and-center at the entrance to their resorts.

The recently opened Palazzo and the under-construction CityCenter and Cosmopolitan, where high-end shopping opens to the sidewalk, are the latest evolution of the resort in Las Vegas — a town where Strip-front retail once meant fast-food restaurants, frozen drink bars, T-shirt counters and knickknack shops.

CityCenter's Strip-front is going to feel more like Rodeo Drive or SoHo than Fremont Street or the intersection of the Strip and Tropicana. At the point where the $7.8 billion project meets the street — the place where a resort traditionally makes its signature mark — MGM Mirage is choosing to plant a retail mall where stores will open to the sidewalk. That's the new Vegas: at the front door, give us Prada, not poker; Barneys, not blackjack.

We're not talking your suburban mall.

The CityCenter mall will have public spaces, unique public art, outdoor patios and meandering pathways.

Executives visited Paris and Rome for inspiration. But the mall, designed by Daniel Libeskind with light-filled atriums and angular rooftops, is expected to be unique — a place for people to congregate, a gathering place that connects the development's other main attractions — hotels, condo towers and gaming — with shop-lined pathways.

"We have a business model that says we are going to provide a retail, food and beverage experience on its own and it alone will be a destination," said Sven Van Assche, vice president of design at MGM Mirage Design Group. "It doesn't have all those negative connotations of trying to trap customers in an environment where they can't get out. This is responding to a growing understanding of how our market has changed and what our customer is today compared to what they were five to 10 years ago."

A long block away at the front of the new Palazzo resort sits Barneys, a New York institution known for cutting-edge fashion and personalized customer service that has stores in Boston, Chicago, Dallas and elsewhere.

In a town with an already impressive lineup of high-end department stores, Barneys will be unique for its own porte-cochere and multiple entrances from within the resort. In other words, they can't make it any easier to get inside, even if the customers strolling through fine jewelry are wearing sandals, colored socks, Elvis T-shirts and fanny packs.

Were it not for these new stores that open directly onto the Strip, these malls would not be unusual.

The Forum Shops, the first mall along Las Vegas Boulevard, opened in 1992. Bellagio in 1998 opened its retail esplanade, with the names of boutiques emblazoned on the outside.

Las Vegas urban planner and architect Arnold Stalk welcomes more pedestrian-accessible shopping along the Strip, which is now known for its imposing resorts.

Places that are scaled to people are more humanistic, inviting and, ultimately, successful, Stark said.

The trend feeds into a greater desire by retailers to be on the Strip, said Robert Futterman, chief executive of New York retail leasing firm Robert K. Futterman & Associates.

Futterman says he is getting more requests from major retailers that want to be in New York as well as the Strip, where there's a perception as well as a reality that people spend more when they shop than they would at home.

"They're scratching their heads saying, where else can we go in the U.S. where we can get tourists and locals and a turnover of people like you do in these two towns?"

Even high end brands such as Gucci are going after a broader range of customer than in years past and want to get in front of the masses, Futterman said.

Resort architect Joel Bergman, who helped design Caesars Palace, said sidewalk boutiques are the next generation of T-shirt and trinket shops.

Pedestrian traffic is expected to increase and Strip traffic will slow to an even slower crawl in future years, giving stores more opportunity to lure passers-by, he said.

"The resorts have grown so big and have gobbled up so many smaller operations along the Strip. But we have to change the kind of entertainment we offer the pedestrian to keep them coming back."

Van Assche calls it an "aura of accessibility."

"Whatever economic range you might be in, Las Vegas has created an environment where really anything is accessible to them."

Putting retail at the doorstep to this mass of humanity, then, makes the most sense, he said.

Assche says CityCenter will offer a larger collection of haute couture boutiques than the Bellagio, which elevated the Las Vegas shopping experience with the likes of Tiffany, Prada, Fred Leighton and Chanel. The Bellagio encourages foot traffic through its mall by having a pedestrian bridge empty right into it.

Cosmopolitan, a hotel-condo high rise alongside CityCenter, is a modern take on a skyscraper mall, with four levels of retail fronting the street.

Having sidewalk-facing stores is natural for urban centers and makes sense for the Strip, with its constant foot traffic, said Leslie Eichner, chief creative officer of the Cosmopolitan.

"We have an urban mind-set," she said. "We were very deliberate in taking advantage of some views of Las Vegas Boulevard that historically people haven't done in the past."

The Cosmopolitan gets its inspiration from the most pedestrian clogged city in the nation, though its angular design and 5-acre rooftop attraction make it unique among high rises, Eichner said.

Eichner and her husband, developer Ian Bruce Eichner, are New Yorkers who have built condo towers there and in Florida.

Across the Strip from the Cosmopolitan, Planet Hollywood fell into its retail street front. The former Aladdin hotel is fronted by a long, curved mall that was considered a liability after it opened because it stalled pedestrians' access to the casino.

Planet Hollywood decided to make the best of it, installing more eye-catching tenants such as Trader Vic's and Hawaiian Tropic Zone — restaurants that draw passers-by with outdoor seating, tiki torches and scantily clad servers. The property recently finished a people mover to feed pedestrians into the property and installed big LED signs and message boards to create a Times Square-like theme for its retail frontage, where signs themselves become an attraction.

Strip-facing fragrance and cosmetics store Sephora, which opens to the Strip at the north end of Planet Hollywood, is one of the mall's top revenue generators because of its choice location, store director Gary Chorost said. Both the Planet Hollywood location and a second store facing the Strip at the Venetian are among the top 10 performing stores in the chain, he said. A third store has opened at Town Square at the south end of the Strip, and the company is exploring another Strip location.

Retailers crave the nonstop foot traffic and world renown of the Strip (as many as 40 percent of the Planet Hollywood store's customers are foreign tourists). The only downside, Chorost said, is fighting for attention among the noise and flashing neon.

"We could use a bigger sign."