The South Coast Plaza Story

Yesterday Federated Department Stores announced the impending demise of Marshall Field's. With all the controversy surrounding that decision, it was easy to overlook the other aspects of the news release that the company issued yesterday concerning its ongoing effort to digest May Department Stores. One of the other decisions Federated announced yesterday was that four stores formerly controlled by May would be converted into Bloomingdale's units, two of which are located in Southern California.

The Robinsons-May stores at Fashion Valley in San Diego and South Coast Plaza in Costa Mesa (Orange County) will be closed and extensively remodeled and remerchandised before reopening as Bloomingdale's. The upscale retailer already has four locations in the region: Beverly Center and Westfield Century City (both in L.A.'s Westside), Westfield Fashion Square (in L.A.'s San Fernando Valley), and Fashion Island (in Orange County's Newport Beach).

This evening I'd like to highlight South Coast Plaza, currently the largest mall in the country with an astounding 2,800,000 square feet of gross leasable area. When Orange County native Chizi first contacted me after reading P.U. she wrote that South Coast Plaza "is the mall of malls in Southern California." I have to agree with her statement, although in retrospect I realize she was simply trying to hit on me.

Like King of Prussia outside Philadelphia, South Coast Plaza began as a humble, "middle-market" mall serving a local clientle and slowly but surely grew to become one of the country's largest, most fashionable, and most productive malls (over $1 billion in sales each year). Indeed, South Coast Plaza rivals nearby Disneyland as an international attraction. The addition of Bloomingdale's is only the latest chapter in the story of this mall's evolution.

The Segerstrom family owned an impressive spread of Orange County farmland for generations. After World War II, the region began to urbanize and the San Diego Freeway (Interstate 405) was to be constructed through Costa Mesa alongside the Segerstroms' property. In the mid-1960's, the family wisely decided to begin developing their land and South Coast Plaza was born.

It's interesting that the future Bloomingdale's store was the first building constructed at the mall. Here's a photo of South Coast Plaza under construction in 1966; the recently completed May Company store is at left, adjacent to the (then) proposed San Diego Freeway:

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The mall was intended to serve the growing middle-class suburbs nearby; the original anchors, May Company and Sears, were decidedly "middle market," reflecting the mall's target audience. Here's a photo of the mall soon after it was completed in March 1967, when it was still surrounded by farmland:

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The Segerstrom family was wise to keep some of its adjacent landholdings vacant so that the mall could expand in the future. The first major addition came in 1973 and was anchored by Bullock's, a department store more upscale than May Company and Sears.

As the 1970's wore on, Orange County became one of the most affluent areas in Southern California. The growing population in South Coast Plaza's trade area could support more retailers, especially those specializing in "luxury" goods that the existing mall didn't provide. The Segerstrom family decided to further expand the mall and tilt it towards wealthier customers, beginning with the 1978 opening of the first Nordstrom department store in Southern California. The following year, prestigious department store chains I. Magnin and Saks Fifth Avenue also opened branches at South Coast Plaza.

Having grown to more than triple its original size, South Coast Plaza became one of the country's most successful malls. Like King of Prussia, it was able to serve both middle-class and wealthy shoppers with a wide range of quality retailers all under one roof. Indeed, the mall was so successful that even more retailers wanted to get in on the action...unfortunately, there wasn't any more room to expand. Luckily, the Segerstroms found a solution: Crystal Court.

Costa Mesa's dominance in the Orange County retail scene was secured when Crystal Court, a "mini" mall comprising of only 588,000 square feet, opened just across Bear Street from South Coast Plaza in 1986. The new mall was anchored by department stores The Broadway and Robinson's and provided space for other stores that couldn't fit into the existing South Coast Plaza.

Obviously, the bifurcated shopping environment provided by two malls across the street from each other was less than ideal. The Segerstrom family had always intended to connect the malls in some way but the six department stores at South Coast Plaza were loathe to give their customers easy access to the two competing department stores across the street at Crystal Court. The rivalry between May Company and The Broadway, in particular, is something of a Southern California legend...the malls would remain seperate as long as May Company felt it necessary to protect its "turf" in Costa Mesa.

The department store industry entered an unprecedented era of mergers and consolidations soon after Crystal Court opened, leading to numerous changes in the anchor line-up at both malls. I have appended the following image of the mall today from Google Earth to show the names and locations of the department stores at South Coast Plaza and Crystal Court prior to 1993:

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The first big change in the anchor line-up at the malls occurred in 1993, when May Department Stores merged its Los Angeles-based May Company chain with Robinson's, another venerable Southern California retailer acquired in 1986 when the company merged with Associated Dry Goods. Both the May Company at South Coast Plaza and the Robinson's at Crystal Court were rebranded Robinsons-May. A full line of merchandise continued to be offered at both stores, as the existence of Bear Street between them made it unlikely shoppers would visit both malls during the same trip.

Federated Department Stores acquired both Bullock's and I. Magnin, two other legendary Southern California chains, when it merged with R.H. Macy in 1994. The following year, Bullock's stores were rebranded as Macy's and the entire I. Magnin chain was shut down. Rather than see the I. Magnin space at South Coast Plaza taken by a competitor, Federated converted it into a Macy's Men's Store.

In 1996, Federated acquired The Broadway and consolidated it with Macy's. The Broadway's store at Crystal Court became a Macy's; like the Robinsons-May in the "mini" mall, it offered the same full range of merchandise as the store across the street at South Coast Plaza. With the anchors at the two malls no longer in competition and somewhat redundant, the Segerstrom family was finally able to proceed with plans to link them through a pedestrian bridge.

With the imminent marriage of South Coast Plaza and Crystal Court into one massive shoppers' paradise, the Segerstroms worked with both May Department Stores and Federated Department Stores to make their ample real estate in Costa Mesa more productive. Robinsons-May elected to close its store at Crystal Court, allowing the Segerstroms to divide it into space for more smaller stores; the Robinsons-May at South Coast Plaza, in turn, would be completely renovated and expanded by 50,000 square feet. The Macy's store at Crystal Court would be converted into a Macy's Home and Furniture Store, the first in Southern California.

The Crystal Court name was dropped; the Segerstroms simply labeled it as a portion of South Coast Plaza and began to market the two malls as a single entity. The former Crystal Court, though, was repositioned to focus on home furnishings and other "lifestyle" merchandise in order to complement the new Macy's Home and Furniture Store. Much of the space in the former Robinsons-May was occupied by a large Crate & Barrel and a Borders Books and Music.

In September 2000, the 600-foot-long covered pedestrian bridge linking South Coast Plaza to the former Crystal Court was completed. The design of the bridge complemented the upscale feel of the shopping complex; among its novel features are a half-acre garden and outdoor cafe at its base near the Macy's store in the original mall. Here's a photo of it:

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When the Federated-May merger was announced earlier this year, observers of the Southern California retail scene wondered what would happen to South Coast Plaza. Federated already had three department stores at the mall: a Macy's, a Macy's Men's Store, and a Macy's Home and Furniture Store. The Robinsons-May store was also an attractive property occupying a key spot in the mall. It was in Federated's best interest to have as much real estate as it could inside the nation's largest mall and to not create an opening for a competing retailer, so yesterday's decision to convert the Robinsons-May into a Bloomingdale's seems like a logical move.

As I mentioned, Orange County already has a Bloomingdale's at Fashion Island, another posh mall that is less than ten miles away from South Coast Plaza. Federated must feel that there are enough customers for both stores; after all, the existing Bloomingdale's at Beverly Center and Westfield Century City are even closer to each other. Bloomingdale's is a great fit for South Coast Plaza, as Henry Segerstrom has noted its "only real competitors are the Beverly Hills retail district and Union Square in San Francisco" when it comes to luxury shopping on the West Coast. I predict that the new Bloomingdale's will be very successful and make South Coast Plaza even more of a destination.

Here's the same Google Earth image of the mall today that I shared earlier, appended to show the names and location of its current (and future) anchors:

(Click photo for a larger image)

It's important to note that Orange County has grown along with South Coast Plaza to become a vibrant part of the greater Los Angeles metropolis. In fact, the region now contains more jobs than residents and has its own "bedroom communities" in Riverside County (but few, if any, orange groves). The area surrounding South Coast Plaza no longer consists of farmland but several other shopping centers along with hotels, office towers, and the Orange County Performing Arts Center. The mall anchors an impressive "Edge City" that continues south along the San Diego Freeway into Irvine, surrounding nearby John Wayne Airport.

South Coast Plaza will continue to evolve in order to remain relevant to today's consumers and retain its title as one of the largest and most successful shopping complexes in the world. I'd like to be one of the first to welcome Bloomingdale's into the mall and I wish the Segerstrom family continued success in their stewardship of this retailing mecca.

Links of Interest

South Coast Plaza (official Web Site)

A Work In Progress (an excellent article written by Debra Hazel for the International Council of Shopping Centers that provided many of the facts in this post)

A time of change (an excellent article written by Kathy Mulady for the Seattle Post-Intelligencer about Henry Segerstrom's push to have Nordstrom make its Southern California debut at South Coast Plaza)

All the Malls of Southern California (my Web Site documenting my quest to visit and photograph every mall in the region during spring 1999)

Big Changes in Store for Southern California's Malls (previous P.U. post about the effect of the Federated-May merger on our retail scene)

Remembering Robinsons-May (previous P.U. post about the history of this chain, soon to be extinct)

My Pilgrimage to King of Prussia (previous P.U. post about my trip to another mega-mall and its history)

My Pilgrimage to Woodfield (previous P.U. post about my trip to another mega-mall and its history)