Sawgrass Mills in Sunrise could be its own economic indicator. The mall is spread over more than 2.5 million square feet with 500 shops and kiosks. It is shopping on a global scale. It’s on the itinerary of foreign tourists. The stories of shoppers wheeling out suitcases full of merchandise are legendary in retailing. In December, the mall’s owner, Simon Property Group completed a 56,000 square foot expansion of The Colonnade section of the mall.
In 2015, Sawgrass Mills was 96.5 percent occupied, according to Simon’s annual report. The company does not report sales for individual malls. However, Simon’s outlet malls generated $568 in sales per square foot last year, a 5 percent increase from 2014.
Sawgrass hosts shoppers from more than 110 countries. As an international destination, it can be a barometer of international economies, especially those important in Latin America. Brazil is in the second year of a recession. The economies of Colombia, Peru and Chile have slowed down. A mall spokesperson says the fastest growing Latin American markets for Sawgrass Mills in Sunrise are Argentine, Mexico and Ecuador.
WLRN-Miami Herald News spoke with Gregg Goodman, the president of the Mills division of Simon Property Group, the owner of Sawgrass.
Q. How busy is January?
A. January is normally our second-busiest month of the year. In fact, sometimes January is busier than December. It’s always cyclical here with regards to where our traffic is coming from. The latter half of last year, Brazil was down, but Argentina was up and Mexico was up. We get visitors from 110 countries. It usually evens out with regards to where people are coming from. Not to say that the value of the dollar isn’t having an impact on the amount of bags that you see and the amount of what people are spending necessarily, but it really hasn’t had any impact on traffic.
Q. The Brazilian real is losing 50 percent against the dollar; the Venezuelan economy continues to be hollowed out. You’re not necessarily seeing the impact of that with your traffic from Latin America?
A. We’re not really seeing it in traffic. If you walk around the center, virtually everybody has bags, but they don’t necessarily have suitcases filled with bags the way that a year and a half ago you would have seen all the time. From the conversations I’ve had with different people from those countries, it’s pretty easy to understand why. In many cases, some of the merchandise is more expensive to buy here than it is back home. But it’s not stopping our traffic. [Just like] you don’t go to Disneyland without going on Space Mountain, you don’t go to Sawgrass Mills without buying something.
Q. Are you changing the retail mix as you’re seeing weaker international currency markets — so the average spend is less but the traffic still remains strong?
A. Sort of. One of the things we’ve been really focused on over the last few years that now is being implemented in phases is adding amenities to accommodate the local consumer. Everybody knows of Sawgrass Mills. Everybody comes to Sawgrass Mills, but they don’t always go to Sawgrass Mills as often as we would like them to — and we know why. It’s because they think they can’t find a place to park or it’s hard to navigate. Little by little, we’re addressing all these things.
We are under construction right now on an almost-2000-car parking deck, which is going to open in early summer. As soon as that one opens, we’re going to get in the ground with the second 2,000-car parking deck. We’re building both of these on either side of the colonnade because we know that’s where the customers want to centralize their experience here. We’re adding traffic signals that have never been here.
When the center was built originally in the late 1980s, I’d say it’s probably fair to guess that no one anticipated it would have the level of success that it has. Sawgrass Mills is the largest single contributor to sales tax [revenue] in the state of Florida.
Q. With that as an economic indicator, what do your projections tell you about the South Florida economy as it links to Latin America’s, considering the Brazilian recession and the Colombian economic slowdown?
A. I think it’s cyclical. It’s not just in South Florida. It’s everywhere across the country. Every place that has been a big tourist shopping destination is feeling a little bit of a pinch as it relates to the amount of sales, but from a [shopping] traffic standpoint, the traffic is there. We focus on the prize long-term to make sure that we execute the vision we have here, and [that is] wherever the people are coming from — whether it be Latin America, Europe, or Asia — that we deliver on the promise to the consumer to have those retail offerings that are unique and special and repeatable.
Q. How does Sawgrass Mills and the unique quality of the consumer in South Florida — tourist shoppers — compare to some of the trends you’re seeing elsewhere?
A. Sawgrass Mills is one-of-a-kind. Realistically, there’s a handful of properties in the United States that have the magnitude of size of Sawgrass Mills, such as the sales that comes out of it and the broader draw of people from all over the place. On a trend basis, we definitely are seeing in our tourism properties across the country similar dynamics to what we’re seeing here.
Q. Do you think that mix of where consumers are coming from is going to change?
A. We haven’t seen the change from a traffic standpoint with them. You definitely can see a pattern depending on what the currency exchange rates are in the various countries. Brazil’s may be down and others are up. It’s all relative. So when last year you would see traffic like this, you probably would have seen [shoppers carrying] a few more bags.
Q. The traditional shopping mall business model has been under some significant pressure since the Great Recession. A lot of malls have had to reinvent themselves as destination places. They’ve done it a lot of different ways through everything from amusement parks to the different types of restaurants. An outlet mall like Sawgrass Mills is slightly different. It’s always been kind of that destination. Even its location is a destination. People don’t stumble upon Sawgrass Mills. How do you work in the kind of market that we have here in South Florida and to continue to distinguish this kind of mall, which is an international tourist destination, for consumers?
A. It’s a really interesting question. To take a step back and look broader at [Simon’s] Mills portfolio, we do have a fair amount of that entertainment in other parts of the country. Here we don’t. And the reason we don’t is, this is power shopping. People come here with a mission, and that mission is to shop.
What we have done a very good job on in the last few years is adding really good food and beverage options at the center. We’re continuing to do that to let people have those breaks in their day. [Power shopping] is exhausting. National and international [retail] tenants have a list of locations that are important for their brand. Manhattan’s Fifth Avenue or Madison Avenue is on that list. With a lot of the stores out there, Sawgrass Mills on their list.
Title: President, The Mills (A Simon Company).
Previously: Executive vice president, The Mills
Previous experience: 31 years in commercial real estate specializing in shopping centers. He spent the bulk of his career with a leasing and development focus.
Education: University of Missouri graduate.
Personal: Married for 29 years; two children, ages 24 and 20.
Connection to South Florida: His mother is a longtime resident of Singer Island.
Interests: Baseball (big Chicago Cubs fan), golf, hiking.
About Sawgrass Mills: The shopping mall at 12801 W. Sunrise Blvd., Sunrise, is the largest outlet and value retail shopping destination in the United States. Simon is a global leader in retail real estate ownership, management and development and a S&P100 company (Simon Property Group, NYSE:SPG).