San Francisco's Retail Scene

[J Church]

I'll be happy if they'll just reopen the deck ...

Metreon's shattered dreams
David Lazarus
Friday, February 24, 2006

Trevor Bryant knew for years that this day would come.

The former Sony senior vice president served as creative director for Metreon in downtown San Francisco. He basically oversaw the $85 million project from start to finish.

So when word got out this week that Metreon was being purchased by the Westfield Group, a leading mall developer, and Forest City Enterprises, a real estate company, Bryant could only shake his head at the inevitability of the deal.

"Our original vision was to create a space that was really innovative in terms of being a technology showplace and an educational experience," he told me Thursday, a day after Metreon's sale was announced.

"It was supposed to be a place where you couldn't tell where the entertainment ended and the retail began," Bryant said. "I truly believed in it 100 percent."

That is, until Metreon opened for business.

"What got created," Bryant said with undisguised bitterness, "was a shopping mall with gated attractions that you had to pay to get into. It wasn't very fun, and the public reacted to that."

On one level, the story of Metreon's rise and fall is the story of what happens when visionary ideas collide with the realities of the business world.

On a more basic level, it's the story of what happens when corporate powers-that-be decide, as they so often do, to place short-term gain ahead of long-term investments.

"Sony started cutting our budget almost as soon as we opened," Bryant said. "They decided within six months of opening that they didn't want to be in the land development business after all."

Never lost faith

Lisa Carparelli, a Sony spokeswoman, responded by e-mail that the company never lost faith in Metreon.

"For the last 6 1/2 years, we have been committed to the successful operation of Metreon," she said, adding that Sony has decided to refocus on "our core businesses of electronics, entertainment and games."

Bryant, 54, said he left Sony about a year after Metreon opened its doors in 1999. He now works as a design consultant in Los Angeles.

"It crushed me," Bryant said. "I was hired by Sony to create a new vision for urban entertainment. Nothing I designed is still standing."

It's a fairly safe bet that it won't be replaced by the new owners either.

Westfield said it will oversee Metreon when the acquisition is completed in coming weeks, just as the company is managing (and expanding) the much larger Westfield San Francisco Centre mall down the street.

Westfield hasn't revealed its plans for Metreon, saying only that portions of the building "will be repositioned and re-tenanted." A spokeswoman for the company declined to be more specific.

The 15-screen Loews Theatres -- by far Metreon's most successful feature -- will remain unchanged, Westfield said.

From the beginning, the people behind Metreon had a fierce, pass-the-Kool-Aid belief that they were on the cutting edge of a retailing revolution.

I saw this for myself when Time Inc. hired me prior to Metreon's opening to write an article about the facility for a Sony in-house publication. (This was before I became a proud member of Team Chronicle.)

Reinventing retailing

I was shown around the building by a Metreon staffer as workers scurried to finish the project in time. Everyone I'd spoken with had gushed about how Metreon was going to reinvent retailing and serve as a model for similar ventures worldwide.

I said to my guide: "So the mall ... "

"It's not a mall," she interrupted. "It's an urban entertainment destination."

"Sorry?"

"It's an urban entertainment destination."

I dutifully described the place as such in the article I'd been hired to write. But I had no clue what Sony meant. Metreon was a mix of stores, eating places and a movie theater.

It was a mall.

Sony never understood this. Nor did it grasp Bryant's notion of a seamless entertainment-retail experience. Instead, it attempted to package Metreon as a mini-Disneyland, with a handful of attractions and a bunch of ways to spend money.

Gee-whiz mix wanted

Maybe the attractions would have worked better as originally devised. Bryant said they were intended to be a gee-whiz mix of a theme park and the Exploratorium.

As things you had to pay extra for, though, the attractions never quite became crowd pleasers.

One of the exhibits, "The Way Things Work," closed in 2001. Another, based on Maurice Sendak's "Where the Wild Things Are," was open only a few days a week by 2003 and was gone for good as of last year.

Metreon's retail stars, meanwhile, quickly found that the one-of-a-kind venue they'd been promised was shaping up into little more than an unusually designed shopping center.

The Microsoft store -- the only such outlet anywhere in the world -- closed in 2001. (This was an especially unfortunate outcome for Bryant; he's the one who first pitched Microsoft CEO Steve Ballmer on the concept.)

The first-floor Discovery Channel Store moved out in 2003, leaving the prime space largely vacant to this day.

On the second floor, Metreon's first high-end restaurant, Montage, closed in 2001. It was eventually replaced by LJ's Martini Bar & Grill, which told Sony it intended to close its doors on Monday but was asked by the company to stick around (with reduced rent) for another few months.

Steve Dooner, LJ's owner, said he has a meeting scheduled with Westfield today to see if his new landlord has a better deal to offer.

"More than likely, we'll be relocating elsewhere pretty soon," he said, adding that business in Metreon has been slower than he'd expected.

One of the biggest missed opportunities for Metreon is the third-floor movie theater. A Loews insider said the theater chain approached Sony in 2002 about expanding to the fourth floor, replacing the increasingly unpopular Wild Things with another nine movie screens.

Loews Metreon is already one of the most profitable theaters in the country. Sony, however, gets none of the box-office take.

"They said no to our offer," the Loews insider said. "They said they didn't want Metreon to be seen as just a big movie theater."

As it stands, that's about all the place is. Kids still turn up at the first-floor Sony PlayStation store and the gloomy second-floor video arcade.

But the main attraction is, and always has been, the theater. Sony never appreciated that. It remains to be seen what Westfield will do.

At this point, the only Metreon tenant that's declared an intention to stay is Sony, which says its PlayStation and Sony Style stores won't go anywhere.

"We look forward to remaining a tenant at Metreon, and to Westfield and Forest City continuing the successful operation and evolution of this facility to the benefit of the downtown area and the entire San Francisco community," Sony's Carparelli said.

As for Bryant, he said it's been a while since he's visited Metreon. He hasn't had the heart.

"I couldn't be more disappointed," Bryant said. "But I've moved on with my life. I've never looked back."

[LongBeachUrbanist]

^ That's really too bad. I had high hopes for Metreon too, when it first opened. But ultimately, the visitors need something interesting to see, and the retailers need to be able to sell product. It's a difficult balance.

From a design standpoint, I have often felt a strange mixture of claustrophobia and disorientation in Metreon. Often times I found myself looking out the big glass windows and wishing I were instead outside in the adjacent park. The food court felt like it was in the bowels of the building, and as for the stores and attractions, it seems I could never quite remember which combination of paths to take to get to them. And the doo-hickeys available at the various specialty stores (like the Discovery store) were interesting to look at but not interesting enough to spend money on.

[sf_eddo]

I hate the Metreon and never know where anything is. I still don't know how to get to the movie theatre (which is ok for me since rarely like any of the movies playing there) or where exactly i go to buy tickets. it looks nice, but is dreadfully user-unfriendly. and the doors leading from the metreon to yerba buena gardens are always locked at night - eesh! we have to walk around to enter on the 4th street side.

i've gone to jillian's for happy hour and pool, and that's pretty much it. One mall is the area is enough (nordstroms/bloomingdales), in my opinion, with the amazing diversity of street retail nearby.

What a horrid waste of space.

[J Church]

Dude, movie tickets are by the main entrance!

I always liked Metreon if for no other reason than the Japanese dancing games. They better keep those. Oh, and the virtual bowling. I seriously hope they'll carry over the arcade.

[sf_eddo]

^ yellow fever.

[J Church]

Paris Hilton.

[EastBayHardCore]

Originally Posted by FourOneFive

one thing that is really missing from the retail district are banks. bank of america has a large branch at one powell, and wells fargo has a branch on grant, but there's a real lack of financial institutions. citibank, us bank, washington mutual, and even wells should have large signature retail branches.

Isn't that a forever 21 now?

[sf_eddo]

^ the bank of america location is now underground at one powell.

[fflint]

I don't hate the Metreon, but I do treat it as nothing more than a movie theater with good views from the lobby. The bottom floor is indeed claustrophobic and also unpleasantly dark.

My hope: Westfield will "reposition" its new tenants toward the street, with the intent to liven up Mission and 4th Streets. It is quite surprising just how *wrong* they got it with Metreon--it is quite unfriendly to the street, right in the heart of our shopping and entertainment district.

[TrippLA]

Originally Posted by fflint

I don't hate the Metreon, but I do treat it as nothing more than a movie theater with good views from the lobby. The bottom floor is indeed claustrophobic and also unpleasantly dark.

My hope: Westfield will "reposition" its new tenants toward the street, with the intent to liven up Mission and 4th Streets. It is quite surprising just how *wrong* they got it with Metreon--it is quite unfriendly to the street, right in the heart of our shopping and entertainment district.

I know about this store that where shopping all Sony stuff and PS2 store... It's seems completely worthless to me because I'm biggest X-Box fans. I need X-Box store so badly. I only dream about Billabong will opening new store in SF.

[fflint]

Circling the square
The zone of chic

J.K. Dineen
The San Francisco Business Times
2/13/06 Print Edition

Union Square's famed shopping district is expanding -- and becoming a bit less square in the process.

During the past six months, a spate of edgy young fashion brands have opened stores or signed leases on the eastern-most block of Geary Street, long a struggling stretch that has been mostly immune to Union Square's well-heeled bustle.

The result is a cluster of like-minded fashionista outlets that are very much part of Union Square, but are also creating a distinct, cutting-edge retail enclave, according to store owners and Union Square retail agents.

Thus far, the new businesses on the block include the risqué lingerie store Agent Provocateur, which opened last week at 54 Geary St.; the hot denim purveyor G-Star at 76 Geary St., which opened in October; and Luigio Borello, an Italian shirtmaker, at 80 Geary St. Soon to join the group is Chrome Heart, a jewelry designer popular with rockers and movie stars at 66 Geary St.; and the super-trendy Juicy Couture, which as a well-known brand will anchor the corner of Grant and Geary streets with a 9,800-square-foot, five-level boutique.

Broker Vikki Johnson, a Johnson and Hoke agent who represented the landlord on nearly all the deals, described the collection of new businesses as the "luxe of the edgy." While some international fashion houses like Gucci regard a Union Square presence as a mandatory part of branding and advertising, that is not the case for the smaller stores taking up residence on the first block of Geary.

"The block is about fashion, not branding," said Johnson.

In the past year, rents on the block have jumped more than 40 percent, from about $60 a square foot to between $100 and $110. Despite the hikes, the rents are still less than half what retailers would be paying closer to Union Square's heart.

Jason Farrell, an owner of G-Star, said he looked long and hard for the perfect location before settling on 76 Geary, which most recently was home to a Hector Russell Scottish Imports, which specialized in scotch whiskey and kilts, among other things.

"I wanted to be a block off, I didn't want to be in the center," said Farrell. "I thought there was a lot of potential for the street -- if somebody started, other people would come."

Farrell, who pays just over $100 a square foot, said he was delighted Chrome Heart, Juicy Couture and Agent Provocateur were joining G-Star. He said the group of stores as "adventurous brands that will feed off of each other."

Johnson and Hoke agent Pamela Mendelsohn, who represented the tenants on most of the Geary Street deals, said the block had benefited from "reasonable rents and good timing."

"It's hard to get a whole bunch of space at the same time, but in this case it was important because it really allowed us to build a neighborhood," said Mendelsohn.

Linda Mjellem, president of the Union Square Association, called the new prosperity on the first block of Geary a "lovely creep," saying it demonstrates "renewed confidence in the area."

"For 10 years, it has been the hinterlands," she said. "It's really exciting to see that it's coming alive."

Agent Provocateur consultant Simon Dallimore said the criteria for space was simple.

"You can afford to be destination-oriented, you don't have to go prime prime," he said. "You don't want to be next to the luxury and you don't want to be next to mainstream. You want to be slightly off pitch."

[ronson]

wow that's two for th westfiel

[FourOneFive]

More news on the new Westfield San Francisco Centre from the San Francisco Business Times!

What's in store for Westfield center
New S.F. shopping center bags big-name retailers, restaurants
San Francisco Business Times - March 3, 2006
by Sarah Duxbury

New restaurants from big-name chefs, new concepts from major store chains, and new outlets for growing retailers are all finding a home at the new Westfield San Francisco Centre.

With its grand opening just six months away, Westfield San Francisco Centre is close to finalizing lease agreements with more than 100 tenants. A Westfield merchandising blueprint obtained by the San Francisco Business Times lists a name for virtually every major retail space at the new center, suggesting that Westfield and partner Forest City will have almost 100 percent of stores ready to welcome customers on opening day.

Retailers Abercrombie & Fitch, Eddie Bauer, Bebe and American Eagle all confirmed they are in advanced negotiation to open one or more stores at the center, as did San Francisco restaurateurs Charles Phan of Slanted Door and the Lark Creek Restaurant Group.

"We think this project is a tremendous attraction and we want to be part of it," said Michael Dellar, a co-founder and co-owner of Lark Creek Restaurant Group, which according to the merchandising plan is looking at a 5,000-square-foot restaurant space on the fourth floor, as well as a 500-square-foot space in the lower level food emporium. "We're very committed to the rightness of the project."

Westfield officials refused to be interviewed about the merchandising plan, and a representative declined comment on it, calling the preliminary retail line-up proprietary information that shouldn't have been given to the newspaper. She said Westfield would announce new retailers once leases were signed and refused to say if anything had changed since October, when the merchandising plan was put together.

Lifestyle brands, mall regulars

Anchored by a 357,000-square-foot Bloomingdale's, Westfield's renovation of the historic Emporium on Market Street is scheduled to be completed in September. It will be combined with the adjacent San Francisco Centre anchored by Nordstrom to create a 1.5-million-square-foot shopping behemoth.

Based on the merchandising plan, lifestyle brands and national mall regulars like Abercrombie & Fitch and Bebe will predominate in the combined center, where they will have multiple locations. That will allow them to roll out new retail concepts.

Abercrombie & Fitch, which according to the plan will be the center's single-largest tenant after Bloomingdale's and Nordstrom, is in final lease negotiations to open a 10,000-square-foot Hollister, which sells beach-inspired clothing aimed at teenagers. The plan also indicates it will open a 10,000-square-foot Ruehl, which targets a slightly older, professional demographic.

Martin + Osa, American Eagle's new brand targeting 25-to-40-year-old men and women that launches this fall, will open one of its first stores at Westfield San Francisco Centre. It plans to open five stores in 2006 and between 10 and 15 stores in 2007.

Bebe plans to open three stores in the Westfield Centre, including one brand-new retail concept. (See related story, this page.)

For other retailers, the new mall provides an opportunity to return to or expand in the San Francisco market.

Eddie Bauer closed its 27,000-square-foot Post Street store in 2003 when its then-parent, Spiegel, filed for Chapter 11. Now that the company is stable, it wants to return to San Francisco, which it considers a key market, a company spokeswoman said. Westfield provided the right-size location -- 4,200 square feet of selling space -- which fits with Eddie Bauer's new model of smaller stores.

Borders confirmed it is in discussions with Westfield, but would not release details.

More recent San Francisco arrivals like H&M, Zara and Juicy are also listed on the merchandising plan for new outlets. Juicy and H&M have indicated in the past that they are interested in new San Francisco locations but declined to confirm whether they are going into the Westfield Center. Zara did not return calls and emails seeking comment.

Bon appetit

Food is as important as fashion at the new mall, and two major San Francisco restaurateurs are close to signing leases to open restaurants at the center.

Dellar of Lark Creek said he expects a deal to be signed with Westfield in the next few weeks and that his company is working on designs for the site.

Charles Phan hopes to open a 5,500-square-foot restaurant on the food emporium level and said the deal could also be signed in the next few weeks.

"We're talking to them," Phan said, "but I won't say I'm going in until I have something signed."

In addition to a 30,000-square-foot grocery store, the lower-level food emporium will feature a restaurant, more than a dozen smaller food kiosks ranging from roughly 400 to 1,000 square feet, with total seating for over 800 people. Westfield has targeted local companies to sell at the food emporium. The center will have larger restaurants and a bar on its fourth floor.

The shopping, food and entertainment options are expected to bring 25 million visitors into the center annually, and Westfield expects them to spend $600 million.

Sarah Duxbury covers retail for the San Francisco Business Times.
--------------------------------------------------------------------------

i can hardly contain how excited i am about the new Westfield San Francisco Centre. It's nice to see Abercrombie, American Eagle, and Bebe expanding in the new center. Zara would be a great addition as well. I don't see how/why H&M would take space in the new center. They have 2 locations in downtown SF already.

If any retailer needs to be in downtown San Francisco, it's Pottery Barn. Can anyone explain to me why they don't have a location in Union Square?

[EastBayHardCore]

Originally Posted by FourOneFive

If any retailer needs to be in downtown San Francisco, it's Pottery Barn. Can anyone explain to me why they don't have a location in Union Square?

^ Their store in Upper Market is HUGE. I don't know anything about retail, but I dunno if they could support another huge store less than 2 miles away.

I'm pretty intrigued by this food emporium and grocery store that they're planning.

[FourOneFive]

Originally Posted by EastBayHardCore

^ Their store in Upper Market is HUGE. I don't know anything about retail, but I dunno if they could support another huge store less than 2 miles away.

I'm pretty intrigued by this food emporium and grocery store that they're planning.

true. in addition to upper market/ castro, pottery barn does have locations on chestnut street and in stonestown. i'm still holding out hope that they'll eventually take casual corner's current location at the corner of powell and geary in union square and refurbish the entire building. that location is too prominent for a sub-par retailer like casual corner. and i'm sure the union square market could easily sustain a pottery barn. a large flagship there would serve the more regional/ tourist population as opposed to the locations in upper market and the marina, which serve local residents.

the food emporium and grocery store is an exciting aspect of the project too. i'm sure whole foods or trader joe's will end up occupying the grocery space. imagine walking into a large food emporium from powell station...

[sf_eddo]

I heard Draeger's (fancy food store, www.draegers.com), most locations on the peninsula, was going to be in the new Bloomingdale's mall. Is this true?

[EastBayHardCore]

I think it's going to be quite interesting to see who exactly shops at this grocery store. I guess I could see the hotel crowd heading down there, but what residents will shop there? There aren't *that* many condos and apartments in the immediate area. Maybe they expect people from the neighborhoods surrounding Market, all the way down to Castro to hope on the train instead of going to Safeway.

[sf_eddo]

^ if it were a trader joe's, i'd hop on a train to go there instead of the south of market location.... if it were a whole paycheck or draegers... meh. maybe a long lunch or something from the financial district...

[fflint]

It's hard to say who the target market is for the grocery store, but I'll bet it will be profitable.

[dimondpark]

Draeger's is more upscale then Trader Joe's-I think it'll do fine considering the demographics of the surrounding area.