Fashion Island alternative to mall

John Bougen

Dress Smart founder John Bougen is pushing ahead with his Fashion Island concept - landscaped precincts with fashion and food offering an alternative to the shopping centres next door.

Based on a retail trend in the US, Fashion Island invites shoppers to spend leisure time inside landscaped precincts of outdoor furniture and palm trees. The concept still allows car access so people can park outside stores.

A focus on fashion aimed to create an alternative to traditional malls and shopping in strip retail centres.

Bougen says he is not trying to take on the big shopping centres. Regional centres and malls would remain the main venue for retail spending.

"We are just picking up the cream," he said.

People went to a big centre with an expectation to spend money and they would spend money at Fashion Island as well.

But it was not essential that they felt they had to spend money, he said.

Bougen has a reputation as an innovator in the retail sector and in a previous role with retail property company Westfield was involved in the early development of Botany Downs, which offers its own brand of low-key retail experience.

Bougen says Fashion Island is different from Botany Downs, but has some similarities with Westfield's development of the Nuffield St fashion quarter in Newmarket, Auckland.

Fundamental to the Fashion Island concept was that people wanted to spend time outdoors, said Bougen.

He said that was apparent in the Midwest United States where the concept of an alternative and adjacent retail complex has been around for 10 years.

Temperatures in Chicago, for instance, ranged by 60C but people were making the effort to go to what had become meeting places and places for people to promenade, he said.

Bougen says Fashion Island is promoted to retailers as offering central locations. Retailers paid lower rent than in malls where they had to cover much higher costs such as heating for the common areas.

In March Bougen established a Fashion Island complex of 32 shops in a 3500 sq m development next to the growing Centa-Max centre at Papamoa, in the Bay of Plenty.

He declined to detail the returns from Papamoa so far, saying the winter months were not comparable and retail had to be considered from one year's trading.

But he said the Papamoa Fashion Island was fully tenanted with national retailers.

Meanwhile, architects are working on plans for a new Fashion Island retail precinct with 32 stores at a 4000 sq m site in central Nelson, where the Mitre 10 store once stood.

Bulldozers will be moving on to the site in January leaving existing stores in the outer shell, with an indoor developed precinct.

Bougen said the Nelson development would be ready by October 2007.

He has sought planning permission for retail precincts in two other cities, which he declined to name.

Bougen says US developments of the concept have achieved what some thought was impossible, getting American consumers out of cars to cross the road from malls to the complementary and more ambient centres next door.

He recently returned from his latest tour of duty to the US where he accompanied members of the board for his company Pacific Retail Management, visiting 11 cities in 11 days. Bougen has gone to the US for the past six years to watch developments in retailing there.

Bougen set up Dress Smart with a cluster of outlet stores.

Prime Retail Management manages Dress Smart stores in Auckland, Wellington and Christchurch, which are owned by ING. Prime Retail also owns and operates a Dress Smart in Te Rapa, Hamilton.

Bougen says Fashion Island will become one of the retail concepts in the same way that Dress Smart has.

The retail sector appears to be pushing ahead with expansion despite persistent speculation about a retail slowdown.

But Bougen is relaxed with the heavy investment saying that returns per square metre for retail developments were comparable with other countries.