"Retail taking off at Detroit airport"

Sunday, September 14, 2003

Retail taking off at airport 
By LARA MOSSA
The Daily Oakland (MI) Press


ROMULUS - Passengers coming off a flight at the Edward H. McNamara Terminal
can get everything from a pedicure to exquisite tableware to a wide variety
of flavors to quench their appetite. The Detroit Metropolitan Airport is
still filling retail and concession space at the 4,900-foot-long concourse,
but many new vendors have moved in since the terminal opened in February
2002. 

The McNamara concessions program got off to a rocky start when one of the
major vendors, Select Service Partner, pulled out of the project shortly
after the Sept. 11, 2001, terrorist attacks and left 14 empty restaurant
spaces. But the airport has been slowly filling the spots with new concepts.

Five new restaurants opened this year: Chili's Too, National Coney Island,
National Coney Island Express, Jose Quervo Tequileria and Slapshotz Bar &
Grill, which is a sports bar featuring Red Wings photos and a 400-pound
hockey stick-and-puck sculpture at the entrance.

In addition, a restaurant called DEMA has opened at the Westin Hotel, giving
passengers a fine-dining atmosphere and meeting place.

Two retailers, Wilson's Leather and Brookstone Electronics also backed out
of the project. Those spaces were filled with Motown Harley-Davidson, which
sells branded clothing and accessories, and CNBC News Detroit, a newsstand
with CNBC books and videos. The Harley-Davidson store was the second in an
airport setting.

The Wayne County Airport Authority expects to fill eight more spots by the
end of the year with concepts such as Fox Sports Bar and an Erwin Pearl
store with women's clothing and jewelry. A 7,000-square-foot food court will
be built at the south end of the terminal. 

"Since we opened the McNamara Terminal, we're doing a lot better than
anticipated, given the effects of the tragedy of Sept. 11," said Myrna
Mendez, director of concessions and quality assurance for the Wayne County
Airport Authority. "After that, you have the issue of the economy, both the
domestic and international economy has been hurt. It has not bounced back as
quickly as we liked."

Travelers also have been deterred by fears about Severe Acute Respiratory
Syndrome - known as the SARS virus - which killed hundreds of people in
China and Taiwan earlier this year, and the war in Iraq.

But sales at the retail stores and restaurants have grown from $61.5 million
in the Davey Terminal in 2001 to $80.8 million for the first full year of
the new terminal from March 2002 through February 2003. Revenues for the
airport increased from $8.7 million to $15.2 million during the same
timeframe.

For the most part, retail shops have paid the minimum annual guarantees on
their leases, while restaurants have paid a percentage of sales beyond the
base rent. Duty-free sales, which have been hit hard by the drop in
international travel, fell from $9.1 million in 2001 to $8 million in 2002.
Duty-free revenues per passenger increased 20 percent from $5.67 to $6.80.

Following Sept. 11, airports increased security and only allowed passengers
through the security check points, prohibiting family and friends from
lingering with their loved ones. This change has not impacted business much,
since only 3 percent to 4 percent of concession revenues comes from "meeters
and greeters," said Brian Lassaline, department manager for external
relations for the airport authority.

More significant is the fact that passengers have been asked to arrive
earlier at the airport and have more time to kill before their flight, he
said. So, they are more likely to browse or buy dinner, especially since
airlines have cut back on meals during flights to save money.

The fact that the McNamara Terminal is a major hub for Northwest Airlines
also helps sales, since 69 percent of the passengers are connecting to
another flight and have time to spare, Lassaline said.

One of the newer stores, OraOxygen, opened in March 2002 and offers oxygen
sessions, massages, manicures, pedicures, facials and waxing. Business has
been doing so well that the spa has started to keep an appointment book.

Owner Suzanne Letourneau had a hard time selling her concept, but opened her
first airport spa at Calgary International Airport in February 2000. 

"If you lack oxygen when you travel, the rest of your body systems will be
affected," said Letourneau, a former flight attendant. About 40 percent of
her customers are employees, who work for either the airlines or the
airport. 

"Detroit is a little bit more of the kind of airport we'd like to be in,
with the traffic and more of a transit situation," she said.

Another popular stop for passengers is the online cafe bar and grill, which
serves breakfast, lunch, dinner, drinks and offers Internet access.

"This allowed me to get on e-mail, use the time productively and get
something to eat," said Bill Prue, 37, of Flint, who was having an omelet
and reading sports scores while waiting for a flight to Milwaukee for
business. "I travel quite a bit, but this is the first time I've seen this
concept at an airport."


Airport retail business is a lot more than souvenirs these days, said Tony
Camilletti, senior vice president of JGA, a Southfield-based retail design
firm.

"People try to find the opportunities to shop, especially traveling business
people, whenever they can," he said. "I think it has to be streamlined to
address travelers' needs. Some of the luxury goods will be a tougher sell
unless you have a traveler in an urgent need for a gift or something they
left at home. It certainly gives layover travelers something to do."

Several boutiques at the terminal offer items that go beyond typical
newsstands and eateries. Brooks Brothers sells shirts and ties. Monarch
offers Gucci handbags, Tumi luggage and Swarovski crystal and Pangborn
Design Collection, owned by local designer Dominic Pangborn, displays
brightly colored ties and scarves, unique kitchen containers and artfully
designed tableware. 

The terminal has a mix of local and national retailers such as the Henry
Ford Museum store, two Michigan-themed stores and a PGA Tour Shop with
clothing and a golf simulator. The retail and concession stores are operated
by several vendors to create competition and keep prices down.

While airport retail was a hot topic in the early 1990s, interest has waned
with the weakness of the airline industry.

"It's going to take a few years for it to pan out and for stores to see the
kind of success they planned," Camilletti said.

The number of passengers who flew in and out of Metro Airport grew by 1.5
percent during the first six months of 2003, compared with the same period
last year. Passenger totals are still down 10.8 percent from 2000, a record
year when 17,767,462 passengers caught or arrived on flights during the
first six months of the year.

Attached Photo:

Retail stores in Northwest's McNamara Terminal at Metro Airport include the
"online c@xx bar grill" where you can sit at a computer terminal and go
online while having a meal.

ACF65A587.jpg