Hi Keren, I love talking business so I hope I don't bore anyone in the Cafe!
The "leased" departments in NM and Saks are a lower cost way to keep a brand presence without maintaining their own retail stores and staff. NM and Saks are two separate companies and there is always a tussle between the 5 department store brands for placement of premier merchandise as it's usually high ticket items. The brands pay to be there plus train specialists in sales but the department store captures store card purchases, points incentives etc. Its a very cooperative type of arrangement. In my opinion, Saks is struggling to find it's way with new customers though I love that store and hope they figure it out. Macy's has seen such a decline in their store appearance and merchandise pricing and they seem to be dragging Bloomingdales down with them, another shame as it was so iconic.
This is just my opinion and I have been out of fashion retail for several years but online sales will likely cause retail square footage to need to drop at least 50% in order for these companies to stay afloat and more than that for large department stores. Malls are already becoming entertainment centers and food is the focus for drawing in more customers. Some malls will have to close and the different retailers will have to focus their efforts on drawing more people to a single location rather than being everywhere for convenience since it doesn't get much more convenient than online shopping. I think we're also going to see more promotion of items that can't be bought online, every effort will have to be made to get people to the stores. My area is now home to the 2nd largest mall in the US and they spent 250 million on an expansion and they average $1K per square foot of retail space-some of the highest in the country. They courted 8 new LVMH and Kering brand boutiques which will now draw those clients from their nearest boutique 90 miles away. That mall 90 miles away is seeing other closures, spending on renovations but seemed lifeless and it's lacking in any new exciting brands or restaurants.
The big developments in the new few years will be these lifestyle hubs, food, hotels, entertainment, shopping, parking, indoor and outdoor walkways. One fashion retailer just acquired an Italian restaurant group and plonked a gourmet pizza and wine bar in between 3 of it's branded stores. That captures food, home and fashion and entertainment revenue in about 30,000 sq feet. When I started in retail 20 years ago, the company I worked for experienced meteoric growth because our stores were spectacles and destinations. They invested heavily in design, art, music and the overall vibe was very buzzy. Then they went public and slowly that started to decline but now it will have to come back to draw in people. Now it seems people do feel that there are some things you shouldn't buy online or don't want to but I think we're going to see a big focus on the overall client experience and how they feel in these spaces which will be very interesting. When you make people feel good, make the space smell good etc they buy more and they're even happy about it.
The biggest flaw in the Design District is the outdoors in Florida aspect, I was there one rainy afternoon and had the place to myself. It was slightly awkward being the only customer in most stores. And I'm pretty sure it rains a lot in Florida, right? some covered walkways would help tremendously, maybe with water misters for really hot days. They'll figure it out though, as you said there's a lot invested!
Ok, cafe sorry to clog the thread. Now that I've procrastinated long enough I must go back to work .