FREDERICKSBURG, Va. — After a helicopter tour of the future home of WorldStreet, a retail concept that will be part mall, part bow to the forces of globalization, a group of Venezuelan investors emptied their water bottles so they could take dirt home from the construction site.
“How great is that? That’s an investment in the American dream,” said David Mignatti, who is spearheading the project as president of the WorldStreet Development Division of Silver Cos., the master developer.
Now just a patch of barren ground within the confines of Celebrate Virginia, a massive retail complex created by Silver Cos., WorldStreet is set to open in 2008 and aims to be a new story line in the tale of globalization, one that will diminish the roles of major retailers and instead offer an outlet to relatively nameless manufacturers.
Celebrate Virginia spans 2,400 acres along Interstate 95 between Washington and Richmond. Billed as “North America’s Largest Retail Resort,” it will be home to historic attractions such as the National Slavery Museum (opening next year) and Central Park, a 2.4 million-square-foot mixed-use retail and entertainment complex featuring restaurants and stores ranging from Wal-Mart to Talbot’s, an indoor ice skating rink, a convention center and an indoor water park.
The $200 million-plus WorldStreet project will be a quarter of a mile long, house 250 to 300 stores, six eateries and a dozen or more cafes over 750,000 square feet. The roster is still being worked out, but Mignatti expects about half the stores at WorldStreet to be operated by foreign companies, some of which produce goods for well-known retailers but haven’t had their own storefront in the U.S.
Among those confirmed to be taking space at WorldStreet are Far East Imports, based in Alexandria, Va., which specializes in hand-painted vases from China and the Far East, accessories company Mediterranean Treasures and a jewelry firm from Jaipur, India.
“WorldStreet represents an opportunity to take links out of the supply chain,” said Mignatti, who recounted the story about the Venezuelans during a recent tour of the site.
“Victoria’s Secret wouldn’t be a chain store that would be in WorldStreet, but perhaps one of the manufacturers and exporters that sell lingerie to Victoria’s Secret would establish their own brand at WorldStreet,” said Mignatti. “The industry is changing worldwide, manufacturers are looking for future solutions, and one of the solutions is going direct to the consumer.”
Related Articles
You May Also Like
Given the dramatic growth among discounters, continued expansion of single-brand specialty stores and consolidation among department stores, at least some overseas manufacturers need a new outlet.
“It’s not easy these days for manufacturers to get ahead,” said retail consultant Walter Loeb, who was not familiar with WorldStreet but said the project could be an opportunity for some firms. “Those manufacturers who are anchored to Federated or somebody are not likely to go that route because they’re afraid of losing that contact, that customer. If you’re not one of the strong first-line resources used by the retailers…you’re trying to find other ways to get contact with the customer, support the customer and then the growth through that demand.”
To find prospective firms, WorldStreet is reaching out around the world.
Mignatti recently spent two weeks promoting the project in China and has 27 private companies from that country scheduled to visit the site by mid-February. Slots have already been sold to firms from China, India, Turkey, Venezuela and Ecuador, and apparel is expected to make up about 30 percent to 35 percent of the project.
In a departure from the normal mall format, companies will own their stores under a commercial condominium arrangement, and 75 percent of the purchase can be financed by Silver Cos.
The idea is to bring in new players with goods that have the ability to create a brand identity and then help them expand through print, Web, TV and radio ads and business support services from access to logistic services to store design advice and merchant banking.
“We’re selling opportunity. This isn’t just another real estate development project,” Mignatti said. “We’re inviting new participants.”
In addition to foreign firms, WorldStreet is courting U.S. brands that don’t have the ubiquity of well-developed national names and boutique owners looking to expand. A branded presence to draw consumers might be key to the endeavor.
“WorldStreet’s going to need anchors of brands to attract people,” said Andrew Jassin, managing director of the Jassin-O’Rourke Group, a fashion consultancy. “Without that, I think it’s a challenge in today’s climate.”
Mignatti said stores at WorldStreet will also act as wholesale showrooms, where brands can establish a distribution beachhead in the U.S. and haggle with store buyers. Brands can also buy space at the center’s warehouse distribution facilities to service wholesale clients.
This mixture of wholesale and retail, as well as the ability of the brands to own their stores, is in line with the way business is conducted outside the U.S., said Larry Silver, chief executive officer of Silver Cos., who has led the company since 1972.
In addition to bringing a bit of a foreign operating ethos to the U.S., the center is intended to deliver an international feel to Virginia.
“We’re bringing an opportunity to experience a new lifestyle to the American public that, unless they got to travel to the bazaars of the world, they would never get to experience,” said Silver.
WorldStreet, as he tells it, will be awash in the smells of exotic cuisines and the sounds of foreign languages. “The owners and merchants themselves will be working in these facilities,” said Silver.
The project also helps Silver get around a problem as a retail developer.
“Our industry is starving for new anchors,” he said, noting there are only so many Targets and Wal-Marts and Lowe’s to build around.
A Wal-Mart superstore weighs in at about 250,000 square feet, while WorldStreets — there are plans to develop about a dozen more near major U.S. cities — could top 1 million square feet. “That is a tremendous anchor,” said Silver. “We become the center of a gigantic draw, a phenomenal experience.”
The center, like Celebrate Virginia, is designed to create a critical mass of shopping to draw people from farther away and to get them to spend more. WorldStreet will connect with other attractions at Celebrate Virginia — the entertainment district, the convention center and hotels — by buses and rubber-tire trolleys. These will convey shoppers along some of Celebrate Virginia’s more than seven miles of internal six-lane parkways, some of which now lead through empty fields being prepared for construction.
Already there is a seemingly endless collection of stores. There is one point where shoppers could see at least four stores offering $5,000 flat-screen TVs and drive no more than 30 seconds between them, amounting to what Mignatti said is an important component of the project: the “comparative shopping experience.”
Still, the striving for critical mass that is a hallmark of the project begs the question: How much retail can the market bare?
For Mignatti, the field is wide open.
“America’s great pastime is consumerism — more than sports, more than arts, more than culture,” he said. “We are a country of consumers and shoppers. These projects respond to the demands.”