Reprinted from the August Cedar Valley Business Monthly magazine.
CEDAR FALLS -- The retail dynamic for malls may be changing, but it’s business as usual for Von Maur at College Square Mall in Cedar Falls.
All is well for the Davenport-based retailer, because it knows its clientele and stays within a carefully designed business model, said Melody Wright, the 32-store chain’s chief operating officer since 2009.
Wright, a graduate of the University of Northern Iowa, acknowledged the challenges College Square and other malls have faced over the years, but said Von Maur is performing as well as ever in College Square, where it has operated since 1987.
“Over that time, the mall has had its share of difficulties, but we have remained stable in spite of the issues surrounding us,” she said.
Retail shopping habits have evolved away from malls across the U.S. over the last 20 years or so, particularly as online shopping has grown and other retail venues have sprung up. Other stores have come and gone at College Square. Through it all, Von Maur continues to draw customers.
“We believe in the Cedar Valley and the customer following we have maintained over the course of the past 31 years,” she said.
So-called “anchor stores” have wobbled or folded in some malls; Von Maur has not wavered.
“Certainly, a lot has changed since 1987, so if you compare then to now, it’s very different,” said Wright, whose tenure with Von Maur began at the Cedar Falls store. “But back in the late ‘80s, Von Maur was not very large. Because we’re Iowa-based, we have an appreciation for the Cedar Valley.”
That connection has served both the store and its customers well.
“We have an appreciation for an area that maybe other retailers see as too small,” Wright said. “There are a lot of small communities in the surrounding area, and we wanted to be able to service them together. And a lot of customers didn’t want to drive to, say, Cedar Rapids. So, it was a way to service all those communities. That was really the draw for us.”
Von Maur now has 32 stores and continues to grow, but its growth has been controlled and deliberate.
“College Square was among our largest stores when we opened it; now, it’s among our smallest, but it’s still a valuable property for a community we want to service,” Wright said.
Malls in general haven’t fared well as shoppers have migrated to big-box stores, strip malls and the Internet. College Square and its Waterloo counterpart, Crossroads Mall, have seen stores close, the and mall properties themselves changed hands.
Great Neck, N.Y.-based Namdar Realty Group and Mason Asset Management LLC purchased College Square in Cedar Falls in March 2015 and bought Crossroads in January 2017. Elliot Nassim, principal with the company, says the owners are working “aggressively” to fill up available space in both malls.
The long-term outlook for both malls is positive, Nassim said.
Wright said she hopes he’s correct, because a vibrant, populated mall brimming with busy, profitable neighbors is preferable to the alternative.
“I think when you’re opening a store, you definitely need to have foot traffic around you,” she said. “What changes over the years is, when customers are used to coming to your location, then you become more of a destination. ... But our preference is definitely to have full leasing, vibrant malls, exciting places to shop around us.”
Von Maur has adapted to changes in the retail business.
“We got involved in e-commerce back in 2005, which was relatively early, but we always maintained the approach that as long as you have unique and exciting products customers want, brick-and-mortar retail isn’t going away,” she said. “The vast majority of business is still done in brick-and-mortar locations."
It’s just a matter of maintaining a balanced business model.
“When things were good in the early 2000s, a lot of retailers overextended themselves; we didn’t do that,” she said. “We stayed with a steady, slow-growth strategy, and that’s what really kept us financially sound.”
Some analysts say the “anchor store” concept is failing; Wright disagrees.
“The biggest part, the purpose that anchors serve -- we carry men’s, women’s and children’s (merchandise) and, so, we tend to be a larger draw for the mall and helps them gain leasing to smaller shops in line,” she said. “Being an anchor, it’s just a structural, really, of the mall. You’re going to have anchors that provide the largest draw, and that helps you in different categories for customers coming to the mall. You need food, in-line shops, a collection of stores to drive foot traffic.”