Dillard May Join Region’s Chain Reaction

Arkansas-based Dillard Department Stores surprised much of the retail world last year by striking a deal to open its first California store in Stockton this fall.

Few would be surprised, however, if the company takes a plunge into Southern California. The moderately priced department store is among many chains that may soon expand into the Southland, where retail is making a strong recovery.

Local mall managers and retail real estate executives are already scrambling to find new locations for retailers in the Southland’s increasingly dense retail field. However, they welcome the buzz about Dillard’s possible entry.

“My message to Dillard’s is, ‘Come on in. The water’s fine. It’s just a little crowded,’ ” said Dick Carter, a senior sales associate at Beitler Commercial, a Los Angeles real estate firm.

Retail real estate sites in the Southland were relatively plentiful during the ravages of the regional recession in 1994, Carter said.

“Now, it’s more difficult,” he said. “There are fewer opportunities and the costs are higher.”

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Many of the choicest sites were snapped up in 1996. Sears acquired five Los Angeles-area stores formerly operated by the now-defunct Broadway chain. Bloomingdale’s moved into Southern California by converting three former Broadway sites. Meanwhile, Mills Corp. opted for a vacant site in the Inland Empire for its vast Ontario Mills mall.

The retail buildup will continue this year. Bloomie’s will open two more Southland stores in March. Saks Fifth Avenue plans to open three more stores in the region. Wal-Mart and Home Depot are among the chains searching the area for sites.

Many regional malls are adding space to accommodate more stores. Camarillo Premium Outlets, for example, is expected to grow by 50% this year to make room for 15 to 30 additional merchants.

An Emanuel/Emanuel Ungaro apparel store for women opened at Camarillo last week, the latest in a string of new tenants there. The mall’s formula--upscale merchandise at outlet prices--is succeeding, said Michele Rothstein, vice president of marketing at Chelsea GCA Realty, the New Jersey-based operator of the Camarillo shopping center. The company operates 18 shopping centers in 10 states.

“Southern California is a very strong market for us,” Rothstein said. “There’s still unmet demand for upscale goods in the region. Shoppers want more designer labels.”

Expansion plans are also being developed for Del Amo Fashion Center in Torrance, already one of the biggest malls in the state. The center hopes to add an additional department store and an entertainment complex.

The owners of the Del Amo mall have held discussions with the Dillard chain, industry sources say. Del Amo’s managers had no immediate comment on the talks. Dillard Department Stores did not respond to queries about its Southern California search.

Dillard’s, which operates mainly in the South and Midwest, has about 250 stores, including some as far west as Arizona and Nevada.

At least half a dozen Southland malls have been mentioned as possible sites for a Dillard’s store, said Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles County.

If the chain opts for Southern California, it will probably open at least three or four stores because multiple sites are needed to justify advertising and distribution costs. Such a move would create more competition in the department store sector, currently dominated by Robinsons-May and Macy’s. “More and more retailers are attracted to this region,” Kyser said. “The population continues to grow and the number of high-wage jobs is growing. This will be a hot year for retail site acquisition.”

George White can be reached via fax at (213) 237-7837.