Off-price mall to open opposite Carrefour - Franklin Mills, off-price and factory outlet mall; Carrefour hypermarket in Philadelphia

Discount Store News, April 24, 1989

Off-Price Mall to Open Opposite Carrefour

PHILADELPHIA -- Franklin Mills, a 1.8 million-square-foot mall featuring factory outlet and off-price specialty stores, is set to open May 11 next to Carrefour's single U.S. hypermarket.

The mall is expected to draw some 15 million shoppers a year, which could help boost Carrefour's lagging sales. On the other hand, the five anchor stores and the scores of smaller off-price specialty shops promise to offer stiff new competition in general merchandise.

Carrefour faces no additional competition in groceries from mall tenants. But one of the Franklin Mills anchor stores of 75,000 square feet or more is Phar-Mor, a deep discount drug store famed for shaking up new markets with exceptionally sharp prices on health and beauty aids.

Based in Youngstown, Ohio, Phar-Mor operates two of its 96 units in Pittsburgh and another in York, in central Pennsylvania. But the $800 million chain is making its first foray into the Northeast.

Reading China & Glass, Reading, Pa., is another of the anchors. A fixture in the Reading outlet mall industry, Reading China will compete directly with Carrefour in housewares brands such as Farberware and Anchor Hocking. It also offers Lenox, Royal Doulton and Noritake china and Waterford crystal at claimed discounts of up to 75 percent.

Another discount anchor is Ports, an off-price apparel and soft home chain owned by Boscov's, a highly promotional department store chain also based in Reading.

In addition, Sears and JCPenney each will help anchor the mall with a surplus store offering closeout merchandise at discount prices.

Other major stores of at least 20,000 square feet include: apparel off-pricer T.J. Maxx and Bed 'N Bath, specializing in off-price linens and soft home.

In sporting goods, Modell's will offer new competition from its mall store, as will The Original I. Golberg, a Philadelphia chain concentrating on hunting and camping equipment.

Factory outlet stores will include Manhattan, Gitano and Benetton, said Howard Biel, executive vice president of the mall developer, Western Development, Washington, D.C.

About a third of the stores will be factory outlets, a third specialty off-price retailers and a third service retailers such as food and entertainment, Biel said.

Such competition in general merchandise "will be healthy for both Carrefour and Franklin Mills," Biel said.

Franklin Mills will draw an estimated 15 million to 16 million visitors per year, he estimated. They will be "serious shoppers" who will generate "complementary traffic."

Carrefour "pioneered" the retail use of the land, once a 325-acre racetrack, when it opened its hypermarket in February 1987. Biel said.

Sales for carrefour have limped along at an estimated $50 million to $60 million annually, whereas analysts estimate it needs sales of about $100 million to break even.

Carrefour obviously expects a symbiotic relationship with such discount complexes because it signed two deals to occupy retail space next to Western's off-price developments. In Philadelphia, it bought 36 acres for its hypermarket from Western. Carrefour and Franklin Mills share a common entrance road and only their parking lots separate them.

And in Brookhaven, N.Y., where Carrefour bought 69 acres for what was to be its first American hypermarket, it had a deal to sell half of it to Western for an strip center of factory outlet and off-price specialty stores.

The deal fell through last November, however, when the Brookhaven zoning board rezoned the land for office and residential use, barring retail use. In February, Carrefour sued the Long Island town in an attempt to get the coursts to reverse that decision (see DSN, April 3, page 2).

For additional retail use, Western also sold 19 of its original 325 acres for a mall specializing in home improvement and decor right next to Franklin Mills and Carrefour. Hechinger, the home center chain based in Landover, Md., will anchor that mall.

Franklin Mills is the second off-price mall Western has developed. In 1985, it opened Potomac Mills, a 1.2 million-square-foot mall south of Washington. Noting its success, Biel said Western plans to expand it to 1.8 million square feet by late 1991.

And, Western is building an even bigger off-price mall, Sawgrass Mills, west of Fort Lauderdale, Fla., Biel said. It will provide 2 million square feet when it opens in the late summer of 1990, he said.