Tuesday, May 4, 1999 | 9:31 a.m.
The Venetian's Grand Canal Shoppes will bring 500,000 square feet of high-end retail to a city where shopping is quickly becoming as big a part of the visitors' overall experience as slot machines and buffets.
The Grand Canal Shoppes didn't open with the casino today. Their opening is expected by May 14.
The Venetian is just the latest Las Vegas resort casino to add a high-end mall it hopes will drive business into its casino.
Analysts who cover the gambling industry say the strategy is working, so far.
"There's no question that retailing on the Strip has been very, very successful," said Brian Egger, analyst at Donaldson, Lufkin & Jenrette in New York.
The prime example, said Egger, is the Bellagio hotel-casino, whose 77,000 square feet of high end shops have been very successful.
"So far, my sense is the retailing at the Bellagio has been a significant traffic generator for them," said Egger.
The just-opened Mandalay Bay hotel-casino, also feeling the need for retail, plans a 1 million-square-foot mall.
The template for casino malls, say analysts, is and always will be the 500,000-square-foot Forum Shops at Caesars Palace.
"The Forum Shops will always be unique in many people's eyes," said David Wolfe, an analyst at CIBC Oppenheimer in New York.
But it appears everyone is catching the retail bug.
Including the Forum Shops, the 850,000-foot Fashion Show Mall, the 35,000 square feet of retail space at the Mirage hotel-casino, and the 22,900 square feet of retail space at the MGM Grand hotel-casino there were 1.4 million square feet of retail space on the Strip prior to Bellagio's opening last fall, according to figures compiled by Egger.
Commencing with Bellagio's opening in October, hotel-casino operators plan to add more than 3 million square feet of retail space over the next several years. That figure includes the Bellagio and Venetian shops, the planned Mandalay Bay mall, a second 300,000-square-foot phase of Venetian shops, a 200,000-square-foot Forum Shops expansion, 65,000 square feet of shops at the Paris Las Vegas hotel-casino and a 350,000-square-foot mall at the Aladdin hotel-casino. The Fashion Show mall also plans to more than double in size by 2002 to 2 million square feet, expanding westward toward Industrial Drive.
There is no reason why these new malls will not do well, as long as they include exclusive high-end shops that cannot be found elsewhere in town, analysts say.
It's clear that the Venetian's Grand Canal Shoppes are attempting to follow just such a strategy.
"We do not want to be a cookie-cutter," said Dan Blatteis, whose Blatteis Realty Co. of Los Angeles is leasing the Shoppes. "We think we've put in a lot of unique tenants."
The mall will be managed by retail giant Forest City Enterprises of Cleveland, which owns Galleria mall in Henderson and has an interest in the non-gaming Showcase mall on the Strip.
Like the other high-end malls in town, the Canal Shoppes place a heavy emphasis on upscale clothiers. Apparel and accessory stores include Cesare Paccioti, Jimmy Choo, Oliver & Co., Pal Zileri, Ann Taylor, BCBG, Bebe, Kenneth Cole, Agatha, Cache, For Joseph, L'Idea, Lior, Lorenzi of Italy, Marshall Rousso, Privilege, Tino Cosma and Vasari.
Other shops include tobacconist Davidoff, art and antique shops like the Bernard Passman Gallery, Gallerie San Marco and the Regis Gallerie.
The Grand Canal Shoppes will also include novelty stores like Brookstone, Houdini's Magic and Tolstoys, as well as several jewelry stores.
But the capstone has to be the authentic Venetian retailers who will open shops. Il Prato will sell collectible masks and fine paper goods and Ripa de Monti will sell Venetian glass and collectibles.
The Shoppes are designed to look like the closely packed buildings one actually encounters in Venice. They follow a canal that winds its way through a series of arches to end in a reproduction of St. Marks Square. The Venetian ambiance includes gondola rides on the canal and actors playing the role of street vendors and performers.
"There is certainly that flavor of authentic Venice," said Robert Schnur, Blatteis' partner.
To fill the Shoppes, Blatteis and Schnur roamed the country looking for unique retailers who didn't already have stores in the Western United States.
"We sort of cherry-picked tenants from across the country," said Schnur.
But because the Canal Shoppes is not the only mall in Las Vegas looking for high-end retailers, the duo found themselves competing with other operators.
"It's definitely a very competitive environment," said Blatteis.
For example, the Shoppes lost an Armani store to Bellagio, said Blatteis.
But retailers who came to town and looked at the Shoppes were impressed, said Schnur.
"All they needed to do was walk it," said Schnur. "You didn't need the water in the canal to understand it was a sensational project."
The Venetian itself helps sell retailers, he said.
"The worst room in the house is a 700-square-foot suite with two televisions," said Schnur.
They synergy of hotel, convention centers and other nearby properties will combine to make the Shoppes a success, said Blatteis. The Shoppes are more than 90 percent leased, he said.
One problem Blatteis says the Shoppes have not encountered are any repercussions from the union difficulties facing the Venetian.
Culinary Union representatives, upset the Venetian would not agree to open as a union shop, have sent letters to any and all retailers who expressed interest in opening stores in the Shoppes.
"Really, (it was) an effort to let them know there was a serious labor dispute at the Venetian," said Chris Magoulas.
The Union claims responsibility for dissuading department stores Nordstrom and Neiman Marcus-owned Bergdorf Goodman from locating at the Venetian. But Venetian President and Chief Operating Officer Bill Weidner says that's not true. Nordstrom does not want to operate a store under 300,000 square feet in size, said Weidner, a space requirement the Shoppes can't accommodate. And Neiman Marcus was concerned about locating a store too close to its existing department store in Fashion Show Mall at the corner of Sands Avenue and the Strip -- just across the street and kitty-cornered from the Venetian.
In any event, said Schnur, the union efforts have had no impact on their ability to rent space in the Shoppes.
"It hasn't really dissuaded any of our tenants," said Schnur.
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