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Macerich's (MAC) Scottsdale Fashion Square Gets New Lineup

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The Macerich Company (MAC - Free Report) recently unveiled the luxury wing of Scottsdale Fashion Square, after it received a face-lift for more than a year, per an article by Phoenix Business Journal.  Notably, with high-end retailers housed in the luxury wing, the mall is poised to attract affluent customers of the neighborhood.  

The luxury wing of the mall is anchored by Dillards and Neiman Marcus. It has been overhauled with a large chandelier in the north entryway, LED-lit column panels and white marble accents. Further, existing tenant spaces for Jimmy Choo, Louis Vuitton, Gucci and Lululemon have been remodeled.

The set-apart luxury wing has also bagged new tenants like Trina Turk, Breiting and Saint Laurent. The renovation project is anticipated to have cost nearly $140-$160 million. Importantly, this upgrade is part of other significant changes that the company plans to undertake at the shopping center.

In fact, Macerich strengthened other parts of the 57-year-old mall by adding new retailers. While a new two-story, co-working space is slated to open at the property, a flagship Apple Store has been added, lately. In addition, numerous retailers and dine-in options will be rolled out in the luxury wing over the next year.

The company’s plans to add multifamily apartments, Class A offices and a hotel in the future near the mall. These densification efforts will enable the company to keep the retail center relevant amid declining footfall at brick-and-mortar spaces.

Understandably, the dominance of e-commerce and online retail sales has compelled mall landlords to explore unique uses for their retail spaces. In the wake of the retail apocalypse, Macerich recently announced that it will introduce the Crayola Experience at the company’s Chandler Fashion Center in Arizona.  
 
This move comes as part of the company’s attempts to adopt new high-experience/entertainment options across its portfolio. Eventually, such efforts will boost mall traffic. However, implementation of such measures requires a decent upfront cost and hence, would drag the company’s near-term profit margin.

Moreover, store rationalization and retailer bankruptcies unfavorably impacted retail REITs like Macerich, CBL & Associates Properties, Inc. (CBL - Free Report) , Cedar Realty Trust, Inc. and Kimco Realty Corp. (KIM - Free Report) , and their share prices have suffered in the past 12 months.

Macerich currently has a Zacks Rank #3 (Hold). The company’s shares have declined 10.9% in the past six months compared to the industry’s loss of 1.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.




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