Mall upgrade aims to buck downturn

Despite the slumping economy, an $80m expansion at Northshore Mall attracts high-end retailers, restaurants

PEABODY - Trojan horses guard the new P.F. Chang's China Bistro at Northshore Mall. Shrimp cocktail is on the menu in the sky-lit food court. Haute couture is in style at Zara, the Spanish retailer. A new logo, with the mall's name written in sleek script, is now the signature of the region's largest shopping center.

The restaurants ad retailers are part of an $80 million expansion of the 50-year-old mall. A new two-level wing, with room for 25 to 30 retailers, will be anchored by Nordstrom, the swanky Seattle retailer.

Other stores, such as H&M clothing, have leased extra-large spaces in older mall space. The 600-seat food court has new wooden tables and chairs, soft sofas, and plants. The 11-foot tall horse sculptures outside P.F. Chang's face Route 128, creating an eye-catching look to a key mall entrance.

The makeover, completed in phases over the last 18 months, could position Northshore as a destination for upscale shopping and dining, one retail watcher said.

"You look at those new stores and new restaurants and all you can say is 'wow,' " said Jon Hurst, president of the Retailers Association of Massachusetts, a state trade group. "It's certainly going to prevent some people from driving right by to Burlington or Natick [malls]."

But the rebirth also comes as retailers prepare for the holiday blues.

With the economy in a tailspin, consumers aren't expected to be jolly spenders. Retail sales fell 2.8 percent last month, the largest decline since 1992, according to the US Department of Commerce. In Massachusetts, the retailers association estimates sales will fall 1 percent this holiday season over the same period last year, according to a survey released Nov. 20.

The state's unemployment rate climbed to 5.5 percent last month, the highest level since 2004, according to officials. Still, Hurst noted, Bay State retailers could fare better than their peers elsewhere.

"After all the consumer has been through, an up and down year, to project that most stores on average will be down 1 percent is not all that bad," he said.

Holiday shopping sales account for 20 to 25 percent of a retailer's annual income, according to estimates. To jump-start sales, some offered deep discounts, one-day sales, and door-buster specials as early as Veterans Day.

"They've discounted, and they've had to do it earlier, because of low consumer confidence," Hurst said.

At least one new mall retailer has high hopes for its first holiday at Northshore.

"We're new here," said Kristen Loomos, manager at Zara, which stocks fashion for men, women, and children. "Everything we have is from Spain. . . We hope people wander in and buy."

The new wing, with 165,000 square feet of space, has replaced the massive Jordan Marsh store, which later became Macy's, that had stood since 1958. The Walking Company, a shoe store, and Swarovski Boutique relocated from elsewhere in the mall. Along with Zara, new high-end stores include cosmetics retailers Sephora and Lush. Teavana, a tea emporium, and White House Black Market, an apparel store for women, also are there.

Nordstrom's new two-level store is due to open in the spring. Along with luxury fashions and multiple shoe departments, the 138,000-square-foot store will have a restaurant and an espresso bar. Nordstrom will become the sixth anchor at the 1.7-million-square-foot mall, along with Macy's, Macy's Men and Furniture, Filene's Basement, Sears, and JC Penney.

"Nordstrom's is really going to help distinguish ourselves," said Mark Whiting, general manager at Northshore for 12 years. "I believe we'll attract customers from the New Hampshire seacoast and southern Maine."

The mall's primary market now spans from Lynnfield to Rockport. But it also draws from wealthy towns in the southern Merrimack Valley and communities closer to Boston. The strong demographics, coupled with its prime location at routes 114 and 128, have long made Northshore a magnet for national chains. Those factors persuade retailers to invest, even amid an economic slump, Whiting noted.

"We draw from some of the most affluent ZIP codes in Massachusetts," Whiting said, standing in front of Sephora. "We don't disappoint that consumer."

Not every new store is high-end, however.

H & M, a middle-of-the-road apparel retailer, is readying a two-level store. So is teen retailer Forever 21, which is putting up a 40,000-square-foot store. Hollister clothing and aerie, a lingerie store, are nearing completion. "Those are stores that will improve our offerings to younger shoppers," he said.

Some mall-goers marveled at Northshore's new look.

"It's awesome," said Deb Persson, 42, a mother of two from Danvers, sitting in a plush chair in the new wing." It's about time, too. The mall was looking kind of sad."

Kathy McCabe can be reached at kmccabe@globe.com.