It's not an accident the new David Yurman jewelry store at Valley Fair Mall in the South Bay is located just a few Jimmy Choo footsteps away from Tiffany's. Nor is it happenstance that the Microsoft Store faces the Apple store and teen favorite Pac Sun is near Forever 21. Computers near computers, jewelry near more jewelry.
Grouping stores by theme is a deliberate plan and it's hot in the mall industry. Created by Australian mall management company Westfield, Total Mall Strategy - or TMS- envisions the mall as a town with high end neighborhoods and working class neighborhoods, recreation areas and even art installations.
"Call them precincts or neighborhoods" says new Valley Fair mall director Gavin Farnam. "We're creating a convenient competitive edge".
Nearly all new malls are developed with "TMS" in mind - the assumption is the strategy encourages shoppers to buy more. In older malls like Valley Fair, the districting idea has required some stores to move.
Though Tiffany's is a relatively recent addition to Valley Fair, it just re-opened up in a new location as mall management works to consolidate luxury brands together. Most stores at Valley Fair have 10-year leases and will be relocated as needed as those agreements expire. "We have about 65 percent of stores where they want them to be" Farnam said.
Valley Fair is unusual in the mall industry because it sits astride a city border. Most of the mall is in San Jose, the rest in Santa Clara. The bifurcation means stores on the eastern half of the mall are prohibited from giving shoppers a bag with their purchase - it's prohibited by San Jose law. While the two cities both charge 8.38 percent sales tax, San Jose gets Tiffany's while Santa Clara gets Vans shoes. San Jose city hall estimates the mall brings in about $4.3 million in sales tax; Santa Clara figures its take is about $1.4 million.
