Most Malls Still Wait for Business Upturn : Retail: The recession is not over yet but there have been encouraging signs.

With consumers suffering from a bad case of war jitters, the San Gabriel Valley’s big shopping malls found themselves facing the unmistakable signs of recession last summer.

“The entire mall was just empty,” said Michael Valle, a former salesclerk at Don’s Toys & Hobbies in Santa Anita Fashion Park in Arcadia.

The recovery hasn’t occurred yet, mall operators say.

There were some encouraging signs, though, when the war ended, and the Easter shopping season brought sales increases. To boost sales, draw more customers and compete with the mega-malls outside the area, most of the San Gabriel Valley shopping centers have been going ahead with million-dollar improvement plans and seeking more upscale tenants.

Now, the valley’s mall operators are cautiously optimistic.

“We believe with confidence the recession won’t go any deeper, but I’m not sure I’m ready to say it’s over,” said Robert Sorensen of the San Diego-based Hahn Co., which operates three malls in the San Gabriel Valley.

The valley has five major malls within its 250 square miles: Santa Anita Fashion Park, Puente Hills Mall in the City of Industry, Plaza Pasadena, The Plaza at West Covina and Eastland Shopping Center, also in West Covina.

Many of the nation’s retailers faced lagging sales last year. Retail auditing consultant Jacquelin Fernandez, of Deloitte & Touche in Los Angeles, said both big department stores and smaller specialty stores had lower sales last year. Same-store sales in 1990 for major stores nationwide, such as JC Penney Co. and Sears, Roebuck & Co., were generally below or equal to 1989 sales, she said.

The few stores that did report increases, she added, were up only 1% or 2%--failing to match the inflation rate of 6.1%. Flat and decreased sales have continued this year, according to national financial reports filed by the stores.

A mall-by-mall look at the San Gabriel Valley shows a blend of tough times mixed with hope for the future:

* Santa Anita Fashion Park operators announced May 2 that a Nordstrom department store will replace Buffums in the 1-million-square-foot center. Nordstrom’s decision culminated a five-year effort to upgrade the 17-year-old mall, co-owned by Santa Anita Realty Enterprises and Hahn Co.

The shopping center has 140 stores and three major department stores--Robinson’s, JC Penney and the Broadway. But higher-priced stores are being sought to attract the valley’s increasing upper middle-class population, Sorensen said. The recession did not interfere with those efforts, he said.

The 150,000-square-foot Nordstrom will be on the center’s west side, now used for parking. Sales could reach $100 million annually, compared with $20 million yearly from Buffums, which has gone out of business, Sorensen said. The 77,000-square-foot Buffums space will be converted to smaller shops leading to Nordstrom. Construction will begin by 1994 if not sooner, once Hahn officials obtain approval from the city and mall tenants.

Similarly, Hahn officials sought more upscale shops when leases in some of its smaller stores expired last year. But that idea went awry when the center ended up with 35,000 square feet of empty space at year’s end. Fewer stores, along with the recession and the Gulf War, kept sales at Fashion Park mall shops at about $70 million, the same as last year, Sorensen said.

He could not give sales figures for the mall’s large department stores, which do not report them to mall operators.

* Puente Hills Mall, which underwent major renovations last year, lost nearly $3.3 million in sales compared with the year before, according to Hahn Co. figures. Those figures do not include the mall’s major department stores: the Broadway, JC Penney, Robinson’s and Sears.

The 4% decrease last year arose not only from the war and recession but also from a $6 million renovation that disrupted mall traffic and business, Sorensen said. Escalators were added next to the mall’s major department stores, a move that displaced some smaller stores and left 20,000 square feet vacant, he said.

The work ended before Christmas, but the mall continued to experience a lag, manager Claire Griffith said. With Easter sales, the picture has improved, she said.

With an antique carousel now being assembled in the mall’s center court, Griffith said the mall should attract more families.

* Plaza Pasadena dropped $10 million in sales last year compared with 1989. According to the Pasadena city Finance Department, gross sales were $84 million in 1989 and $74 million last year. Sorensen said the mall’s small tenants reported the same level of sales, $51 million, as the year before.

He attributed the loss mainly to the absence of the May Co. store, which closed in January, 1989, leaving the Broadway and JC Penney as anchors. The closure left a 50,000-square-foot vacancy in the mall that was further emphasized by barricades that surrounded the space while it was being remodeled last year into 11 small shops.

Six of the 11 spaces now are leased. When other tenants are found, Sorensen said gross sales for those stores should reach about $8 million annually, nearly the same amount as the May Co. store sales.

* The Plaza at West Covina, under renovation during most of 1990, nonetheless increased sales over 1989 levels, mall manager Greg Beyer said. He would not provide exact sales figures, nor did he know how the mall’s anchor stores--JC Penney, the Broadway and Bullock’s--fared.

The $20 million renovation--skylights, a food court and more modern decor--may have helped lure customers to the 16-year-old mall. It may account for the increase in sales at a time when other San Gabriel Valley malls showed a decrease or flat sales, Beyer said.

“We added so much ambience here; I think that probably accounts for it,” agreed Sonnie Faires, the mall’s operations manager. “It bloomed. It opened up.”

* Eastland Shopping Center saw a decrease last year from 1989 sales, said Randall Smith, a spokesman for May Centers Inc., the St. Louis-based company that operates the West Covina mall. Smith declined to provide exact figures for the mall stores. He could not give figures for the mall’s anchor stores, May Co. and Mervyn’s, which do not report them to mall operators.

Although the mall’s 150 stores concentrate on discount-oriented customers, with shops such as Ross Dress for Less, Marshall’s and Sportmart, it suffered from the war and recession beginning in August, just as neighboring upscale malls did, Smith said.

That downturn lasted through January and February and sales are still flat, he said.

“Very few retailers have faced a state-of-war situation like that,” he said of the Gulf War. “It was very short and kind of unexpected.”