Metro-East News

Sears will soon be gone, but the mall remains an economic driver in the metro-east

Manager upbeat at St. Clair Square

Michael Hagen, manager at St. Clair Square in Fairview Heights, explains why he feels momentum at the shopping mall in this video from January of 2019.
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Michael Hagen, manager at St. Clair Square in Fairview Heights, explains why he feels momentum at the shopping mall in this video from January of 2019.

How is St. Clair Square doing?

That’s a question on the minds of many metro-east residents, who have been reading for years about the negative affect of Internet sales on brick-and-mortar businesses and who recently learned that Sears will close its 44-year-old anchor store in March.

Mall manager Michael Hagen is quick to answer: “We are a healthy mall, and healthy malls tend to be prepared,” he said. “We are going to weather this just fine.”

That kind of talk is reassuring for people who understand that St. Clair Square is more than just a shopping mall in Fairview Heights. It’s an integral part of the city’s history, livelihood and identity.

The mall’s 130 businesses provide nearly 21 percent of sales-tax revenue in Fairview Heights, a significant factor in a city that doesn’t levy property taxes on residents. It also drives growth in the surrounding area, said Paul Ellis, economic development director.

“The first thing (companies looking at property) want to know is, ‘How close is it to the mall?’” he said. “That’s prime real estate. It’s the most attractive and sought after.”

St. Clair Square sits at the intersection of Interstate 64 and Illinois 159 with more than a million square feet of retail, including four anchors: Sears, Macy’s, Dillard’s and J.C. Penney. It’s considered a “super regional center” because it attracts shoppers from throughout Southern Illinois.

Hagen predicts the mall will be operating at nearly full capacity by late summer, not counting the Sears building. Tenants are now being rearranged to make room for a new H&M location and an expanded Forever 21 store that will be double its current size.

“Once H&M is here and Forever 21 is in its new spot, we will probably have one or two open spaces in the mall, and that’s really good,” Hagen said.

Back-up plan being pursued

Hagen and city officials are staying mum about the Sears situation, other than to assure the public that they’ve been discussing contingency plans ever since the iconic 126-year-old company began showing signs of financial difficulty. It filed for Chapter 11 bankruptcy in October and is closing about 200 stores nationwide.

The Fairview Heights Sears has been open since 1975, supplying families with everything from appliances and tools to clothing and jewelry, linens and electronics to mattresses and auto parts.

But the store’s closure won’t devastate the city’s commercial landscape, say Ellis and Mayor Mark Kupsky. Kupsky noted that large spaces were successfully redeveloped after Target, Venture, Kmart and Hobby Lobby left the city (Target later returned).

“We have more interested retailers than we have space available,” Ellis said. “Our limitation as a retail center is more likely to be available sites than businesses willing to locate here.”

The Victoria’s Secret PINK store recently expanded its space from 4,400 to 7,400 square feet and got a new polka-dot facade on the second floor of St. Clair Square in Fairview Heights. Teri Maddox

Foot traffic at St. Clair Square was light on a recent Friday evening, presumably because a major snowstorm was moving into the area and the mall was closing early.

One brave shopper was Amy Strong, 49, of Fairview Heights. She likes to look at Dillard’s and J.C. Penney while her college-age sons hit Finish Line and Foot Locker’s House of Hoops. Then they eat at Panda Express.

“I live across the street,” Strong said. “That’s the main reason I like it. I think they do the best they can to keep it as nice as they can. It’s clean. It’s convenient. I’ve never had a fear coming to this mall.”

Mall and city bonded in 1970s

A little history helps explain the strong bond between Fairview Heights and St. Clair Square. It started in 1973, just four years after the city incorporated, when May Department Stores Co. built a Famous-Barr (now Macy’s) on 88 acres along Illinois 159.

A year later, the company opened an attached, two-level shopping mall with room for about 70 specialty stores, ranging from Kinney Shoes to Jean Nicole, General Nutrition to Frederick’s of Hollywood. Trees and reflecting ponds lined the “climate-controlled” central corridor.

“If you’ve never been to a happening before, you’re at one today,” TV and radio personality Jim Bolen told an excited crowd that showed up for the grand opening, according to a BND story.

In 1975, St. Clair Square had Famous-Barr and Sears stores, and J.C. Penny was preparing to open. Four years later, a court ordered the City of O’Fallon to remove the mall logo from its water tower. BND file photo

The mall later expanded to include Sears in 1975, J.C. Penney in 1976 and Stix, Baer & Fuller (now Dillard’s) in 1979. It also helped set off an explosion of retail, restaurant and other growth in the surrounding area.

Not everyone was happy about St. Clair Square coming to town. Small shop owners in downtown Belleville and elsewhere worried that it would hurt their business, and it did in the eyes of many.

A bit of trivia: In 1979, the Fifth District Appellate Court at Mount Vernon ruled that the city of O’Fallon had to remove the St. Clair Square logo from its water tower, which served Fairview Heights, because the tower was public property that couldn’t be used for private advertising.

Belleville attorney Fred Hess called it “a victory for the small businessman.”

$1.5 million in sales taxes

Today, Fairview Heights remains one of the few cities in Illinois that doesn’t levy property taxes on residents. That means it relies heavily on sales taxes to help fund municipal services.

St. Clair Square businesses generated $1,548,379 in sales taxes in 2017, the last year complete figures are available. That’s nearly 21 percent of the city’s $7,485,016 in total sales-tax revenue.

“The mall is, of course, a very important part of our community and the metro-east,” Mayor Kupsky said. “When you look at the number of employees, it’s like Scott Air Force Base. It’s a major employer.”

An estimated 2,200 people work full or part time at mall stores.

Hagen said evidence of St. Clair Square’s regional appeal includes tour buses that carry shoppers from deep Southern Illinois, even those who live closer to malls in Paducah, Kentucky, and Cape Girardeau, Missouri.

On the recent snowy Friday night, Bethalto resident Grace Kutchma and her sister, Briahna Staggs, drove 60 miles round-trip for some retail therapy at St. Clair Square.

“I like Earthbound (Trading Company),” said Kutchma, 22. “It’s kind of a hippie store, and I like the new store that opened up, La Senza. I’ve been there a few times. We actually live closer to Alton Square, but they’ve closed down most of the stores there, so this is the next closest.”

Sears leaves big shoes to fill

H&M stands for Hennes and Maritz, a Swedish retailer that specializes in “fast fashion” for women, men, teens and children. That term refers to clothing that moves quickly from New York City catwalks to stores.

St. Clair Square and city officials consider the company’s plans to open a Fairview Heights location an extremely positive development.

“There are people who drive to St. Louis because they want to shop at H&M,” Hagen said. “It was one of the top stores when I polled people on what stores they would like to see at the mall. H&M is big.”

The 44-year-old Sears department store at St. Clair Square in Fairview Heights is having a going-out-of-business sale with plans to close its doors in March. Teri Maddox

The Sears building is much too large for H&M, Hagen said. Sears covers 158,000 square feet on two levels. H&M will combine four average-size storefronts (formerly Forever 21, Aeropostale and THIS! and a vacant space) on the mall’s lower level, to the right as you leave Macy’s, but that’s still only 20,000 square feet.

“We would call that a sub anchor or a junior anchor,” Hagen said.

H&M will be next to the new Forever 21 store, which is replacing temporary tenants Fashion 5 and Asian Massage (former locations of New York & Co. and The Limited). THIS! plans to relocate in the mall.

H&M will be a game-changer for Victoria Goodman, 25, of Belleville, who recently went to St. Clair Square to eat at Charleys Philly Steaks with her cousin, Aeriana Hedgecough.

“I go to West County because they have more kids stores,” Goodman said. “That’s why we can’t wait until they get H&M (in Fairview Heights). I love their kids clothes. They’re good quality.”

Company owns four area malls

The St. Louis region has nine shopping malls. St. Clair Square is owned by CBL & Associates Properties, a Tennessee-based company with 114 properties in 26 states, including 73 enclosed, outlet and open-air retail centers, according to its website. It manages another 12 for third parties.

Locally, CBL properties include South County Center in St. Louis; West County Center in Des Peres, Missouri; and Mid Rivers Mall in St. Peters, Missouri. Hagen manages St. Clair Square and South County.

Hagan characterizes the Fairview Heights mall as a go-to place for real shopping, not just window shopping.

“We have what people want or need on a regular basis,” he said.

Hagen knows Internet sales are growing, but he said some media reports fail to mention that they’re still a small part of overall retail (9 to 13 percent, depending on parameters), and that many malls are holding their own.

Joel Petry, a marketing professor at Southern Illinois University Edwardsville, agrees.

“Online sales certainly have increased,” he said. “But there are still a fair number of shoppers who prefer the action at the brick-and-mortar-type stores. They don’t have to wait for merchandise, and they can bring it back. I don’t think we’re to the point of mass acceptance of online retail.”

Foot traffic key to success

Petry has found one “truism” in retail is that the longer you can keep shoppers in your location, whether it’s a store or shopping mall, the more likely they’re going to buy something.

Some malls have increased foot traffic with movie theaters and other non-retail activities, he said. Others are finding success with tenants such as Apple that appeal to people with particular interests or lifestyle preferences; or stores such as PINK and Sephora that attract younger crowds.

Petry mentioned Bass Pro Shops and its subsidiary Cabella’s as examples of large specialty retailers that could fill a space as large as the Sears building at St. Clair Square.

“From my research and what I’ve read, traditional department stores aren’t doing as well as they once were,” he said. “Their heyday has passed because people tend to find merchandise elsewhere at a lower price.”

Build-A-Bear Workshop moved from a storefront to a kiosk last year, making room for Victoria’s Secret PINK to expand from 4,400 to 7,400 square feet at St. Clair Square. Provided

While online sales remain a small percentage of overall retail, they’re growing rapidly, with increases of 14.5 to 16.6 percent (varying by quarter) in the past year, according to the U.S. Department of Commerce.

Even so, Hagen said many retailers are adapting their business models so they can compete both online and in stores and that it’s wrong to assume “malls are dead.”

“There’s a social component with a shopping center that you can’t get online,” he said. “I’ve been doing this for a long time, and I don’t see that changing.”

New barbershop and lingerie store

Several major developments occurred at St. Clair Square last fall. In September, basketball-themed barbershop All Star Kutz moved into a long-vacant space that housed Men’s Warehouse and Tux. It’s on the second level, to the left as you leave Dillard’s.

The decor has a gymnasium feel, and hair-cutting stations are patterned off locker rooms. Customers can watch sports on eight TV sets while they’re getting trims.

“I’m a basketball coach in Springfield, and it’s a vision that God gave me,” said owner Audrey Austin, who has two other locations. “I’ve been in White Oaks Mall (in Springfield) for three years, and I’ve also been in Champaign since 2009.”

Kenneth Moran, right, trims Curtis Hill’s hair and Juan Garth, second from left, trims Terrance Jones’s hair at All Star Kutz, a new basketball-themed barbershop at St. Clair Square. Teri Maddox

In November, the Victoria’s Secret PINK store at St. Clair Square finished its expansion, going from 4,400 to 7,400 square feet by taking over a space formerly occupied by Build-a-Bear Workshop, which moved into a kiosk. PINK also added a bold new polka-dot facade at the top of the escalator, opposite J.C. Penney.

Around the same time, Victoria’s Secret’s parent company, L Brands, opened the La Senza lingerie store next to Yankee Candle.

Hagen gives credit for the mall’s success to metro-east customers who support it and to city officials who ease the way for retailers to open and operate stores.

“We do whatever we can to make Fairview Heights a business-friendly community,” Mayor Kupsky said.