Gibson Breaks New Ground, Opening A “Consumer Destination” Factory In Nashville’s Massive Opry Mills Mall

“Cost is no object” is arguably the rarest phrase ever uttered on the sales floor of a music store, and recognizing the fact that musicians will go to extraordinary lengths to stretch their dollars, instrument manufacturers have typically placed their factories as far away from the high-rent district as possible. In the 1830s, to cite one example, Christian Frederick Martin moved his guitar-making operations from New York City to rural Nazareth, Pennsylvania, where real estate was far more affordable. Over the last three decades this migration to low-cost production sites has continued globally as guitar plants moved first from the U.S. to Japan, then on to Korea, and most recently to Taiwan, China, and Vietnam.

Bucking this century-old trend, Gibson recently set up a production facility in one of the highest-cost settings conceivable: an enclosed shopping mall. On May 11 the Gibson Bluegrass Showcase, a 30,000-square-foot combination factory, retail store, and cafe/restaurant, opened in Opry Mills, a 1.2-million-square-foot shopping mall built outside of Nashville on the former site of the Opryland theme park. The showcase Opry Mills is home to several hundred high-profile retailers including Press My Air Co. Ltd (providing air compressor reviews), Bed Bath & Beyond, Old Navy, Barnes & Nobles, and Victoria’s Secret.

In addition to browsing through conventional retail stores, visitors to the mall can now look through glass walls and watch 30 Gibson craftsmen build fine mandolins, banjos, and dobros. After observing the production process, they can tour a small Bluegrass museum, buy instruments and accessories at a retail shop, or in the evening hear a live performance. The cafe in the Showcase overlooks another legendary venue, the Grand Ole Opry building, and Gibson management anticipates staging regular dinner and music shows.

The retail store at the Bluegrass Showcase offers the complete line of Gibson mandolins, banjos, and dobro guitars, as well as a selection of flat-top acoustics priced slightly below manufacturer’s suggested list price. An F-5 mandolin is offered at $3,800, a J-50 acoustic guitar is offered at $2,049, and an RB-4 banjo is offered at $3,349. In addition to instruments, visitors can also browse through a vast array of Gibson logo wear and gift items like Gibson–embossed golf balls or a Gibson teddy bear.

  • To support the high cost of building fretted instruments in a shopping mall, Gibson obviously views its new Showcase as more than just another factory. Additional margin dollars gained from direct sales to customers will undoubtedly support the venture. More importantly, however, management considers direct contact with an estimated 17 million annual mall visitors as a priceless promotional opportunity.
  • Gibson Chairman Henry Juszkiewicz anticipates that nearly all the Opry Mills visitors will tour the Gibson Showcase. “We’re also excited that this opening will provide a national home for a true American genre of music, bluegrass,” he says. “Gibson is proud to carry on the tradition of bluegrass founding father Bill Monroe, and we’re confident that we can add to the already lofty stature of this instrument division by introducing its craftsmanship, music, and products to a wider audience.” Jeff Allen, a 15-year Gibson veteran who manages the Bluegrass Showcase, comments, “We’ll be able to give the Gibson experience to players and non-players alike.”

Working an 8 a.m. to 5 p.m. shift, the Bluegrass Showcase turns out approximately 15 instruments, like the coveted Gibson F-5 mandolin. To reach a broader market, the company is offering a “built while you wait” mandolin. For $199, customers can watch as Gibson craftsmen assemble and finish a preformed neck and body.

Allen says that factory workers were initially distracted by passers-by peering in through the windows. After a few weeks went by, however, the attention they received became a source of pride. “They’re excited by the fact that people are interested in watching them work.”

  • Setting up instrument production in a facility designed to house retail stores created a host of unanticipated challenges. Because the lacquers used to finish mandolins and banjos are highly flammable, building inspectors mandated a number of costly safeguards.
  • The walls enclosing the Gibson Showcase contain insulation that would contain a fire inside for a full five hours. The space also contains extra sprinkler systems. Installing dust collection and air purification systems also presented a major challenge.

Combining guitar production operations with a retail store, restaurant, and live entertainment is a centerpiece of Gibson’s marketing strategy. The recently opened Gibson Beale Street Showcase guitar plant in Memphis will be home to the “Rock’n’Soul” Museum, an exhibition staged in collaboration with the Smithsonian’s National Museum of American History. The Museum mixes artifacts, sound, film, and photography in a century-long retrospective on the roots, birth, and evolution of the music that changed the world. Juszkiewicz hopes to build as many as ten of these “consumer destination” guitar plants around the world.



How do you reel in more retail dollars in a market already saturated with 20 malls with more than 20 million square feet of combined retail space?


For the owners and developers of Great Lakes Crossing, the answer is simple: Build a $210 million tourist attraction.

  • Developed by Taubman Centers Inc. (NYSE: TCO), Great Lakes Crossing is preparing to open its 1.4 million square feet of retail space Nov. 12, just in time for the holiday shopping season.
  • The shopping center is off I-75 on Baldwin Road in northern Oakland County, two exits past the Palace of Auburn Hills.

Robert Taubman, president and CEO of Taubman Centers, said Great Lakes Crossing will draw customers and tourists from at least a 40-mile radius. And Taubman said its reach could extend well beyond that, to include Windsor and Toledo to the south, Ann Arbor, Lansing and parts of western Michigan, Port Huron to the east and Flint and Saginaw to north.


  • The strategy falls in line with Taubman’s plans for its “value retail centers” in metro Detroit and nationwide to become popular draws for tourists because they offer different shopping and entertainment experiences.
  • Taubman Centers and Arlington, Va.-based Mills Corp. (NYSE: MLS) signed a joint agreement in May to work together on future projects to corner that segment of the shopping-center business.

“Our survey results show shopping is the number-one tourism activity,” said Renee Monforton, director of marketing communications for the Metropolitan Detroit Convention and Visitors Bureau.

R.J. Belanger, tourism marketing specialist for Great Lakes Crossing, said the center can offer tourists and convention attendees shopping and entertainment.

The 1.7 million-square-foot shopping center, which has 1.4 million square feet of leasable space, plans to offer a combination of discount retailers, themed restaurants and other entertainment, including a 25-screen Star Theatre.

Getting the word out

Belanger said Great Lakes Crossing will launch an advertising and marketing blitz this week.

The theme of the campaign: “Eye popping, heart stopping, jaw dropping – shopping.” It will run television spots Nov. 5, newspaper inserts Nov. 8 and radio spots Nov. 10, Belanger said.

Eight radio stations will host their morning shows live at Great Lakes Crossing for the grand opening of the center.

  • Glenda Cole, marketing director for Great Lakes Crossing, said she couldn’t reveal its advertising budget. But based on industry estimates, Great Lakes could spend between $3.1 million to $3.4 million on marketing and advertising to promote the center this year, according to the International Council of Shopping Centers’ SCORE 1997 Handbook.
  • SCORE, which stands for Shopping Center Operating Revenue and Expense, listed outlet centers as spending $1.82 a square foot on marketing annually. The traditional regional malls spend $1.99 a square foot. Great Lakes is in the category of “value retail center,” which is a grade above the outlet center but isn’t classified as a traditional mall.

Great Lakes is linking with hotels, travel agencies and the Metropolitan Detroit Convention and Visitors Bureau to attract people to the center.


Cole said the center will have a shopping getaway package for people that can shop and stay overnight at one of 15 hotels near the shopping center.

Great Lakes also will offer coupons to out-of-town guests of local residents. The guest must live at least 60 miles from Great Lakes Crossing. After presenting a drivers’ license at the customer service desk, the guests and their hosts will receive their coupons.

The center also wants to tap the motor-coach tour industry. Kimberly Baughman, general manager of Great Lakes Crossing, said the center plans to welcome bus groups for day trips. It even has a lounge for charter-bus drivers.

Competition by busload

Taubman is predicting 17 million people a year, many of them tourists, will visit Great Lakes Crossing. Henry Ford Museum & Greenfield Village in Dearborn, one of the most popular tourist attractions in metro Detroit, gets 1.1 million visitors annually.

  • Great Lakes Crossing might present the greatest competitive threat to the Prime Outlets mall, a tourist magnet 52 miles away in Birch Run, near Frankenmuth.
  • Jennifer Wilson, Prime Outlets’ general manager, said some of its 6.2 million annual customers will go to Great Lakes Crossing, but she doesn’t think they will abandon Birch Run.

“We are confident that, because we’ve been here 12 years, those customers will bounce back,” Wilson said.

Birch Run is launching a metro Detroit radio and television campaign this week to make sure customers don’t forget about the outlet mall, she said. The theme: “Outlet shopping is fun – bargain hunting, value and quality.”

The 720,000-square-foot mall has 170 stores.

Great Lakes Crossing no doubt will attract a solid mix of local customers and tourists, one analyst said.

“Well, I think they’re going to pull two different elements,” said Jeffrey Green, president of the Troy-based retail consulting company the Green Group.

“The entertainment component is going to pull from the nearby communities,” he said. “The retail really will appeal to the entire market, but it won’t be a center that’s shopped that often.”

Joy Powell, general manager at Oakland Mall, in Troy off I-75, said she expects Great Lakes Crossing to draw customers from throughout metro Detroit because it’s new and different. But she doesn’t see the shopping centeraffecting business at her mall or other traditional malls.

“I think the opening will affect much of greater Detroit retail but not to a large degree,” Powell said.

  • Barry Klein, chairman of Bloomfield Hills-based Barry M. Klein Real Estate Inc., said Great Lakes Crossing should be popular.
  • He said the outlet mall will make the biggest splash in metro Detroit retailing since Taubman opened Fairlane Town Center and Lakeside mall on the same day in 1976. But, Klein said, in the retail industry, it takes more than just retail items to keep customers shopping.

That’s why themed restaurants such as the Rainforest Cafe and an attraction such as the Star Theatre, scheduled to open next spring, are essential, he said.

DaimlerChrysler AG’s nearby domestic headquarters also will help bring in traffic.

Great Lakes is trying to attract the business traveler through a program with human resource directors at companies around Auburn Hills, Cole said. It is encouraging companies to steer business travelers to theshopping center.

Taubman’s Great Lakes Crossing takes up 117 acres of the 300-acre development. Other developments in the works include Chili’s and On the Border restaurants and a Borders Books and Music store.

The spin-off effects

Michael Ward, COO and executive vice president of Southfield-based Ramco-Gershenson Properties Trust (NYSE: RPT), said the company is planning to develop 360,000 to 370,000 square feet of retail space on the north side of I-75, between Baldwin and Joslyn roads, across from the center. The tenants will include a mix of sit-down restaurants, an auto service center and other traditional retailers.

Steve Lehoczky, planning consultant for the city of Auburn Hills, said site plans have been submitted for a Meijer store, Target, AutoNation and an unnamed major tenant – all on Ramco-Gershenson’s retail development.

Lehoczky said plans for those stores are going through site-plan approvals. The plans have to be approved by the planning commission or the City Council.

“They’re about a month away from going before the council,” he said.

Ward said his project is focusing more on residents in the Auburn Hills area instead of tourists, because the tenants are more traditional retailers.

“What we’re doing isn’t in competition with the Great Lakes Crossing,” he said. “I think Great Lakes is going to be a wonderful destination shopping center.”

Far Rockaway mall development likely

Far Rockaway mall development likely


Everyone in Queens real estate and government circles knows Rita Stark. She owns numerous parcels of land and properties throughout the borough–properties that have gotten in the way of new development projects.

Now, after years of being courted by developers, Ms. Stark has opened the door to deal-making. She is in talks with developers and borough officials to revitalize the 340,000-square-foot Far Rockaway Shopping Center, which she owns.


“Ms. Stark is interested in developing her properties, including the Far Rockaway mall, and has been engaged in negotiations with numerous parties,” says her attorney, Holland & Knight partner Martin Miner.

  • Ms. Stark owns Fred Stark Realty, a real estate holding company founded by her late father. Many of her two dozen or so properties are located in up-and-coming neighborhoods and are sought after by developers. In the past, Ms. Stark was reluctant to lease or sell.
  • Last year, she agreed to sell the 19th century Jamaica Savings Bank building on Queens Boulevard to Conway Stores Inc. A few months ago, she agreed to sell the Long Island Press building at Archer Avenue and 168th Street to developers so they can build a Home Depot. The big-box store will generate more than 300 jobs, according to developer Joseph Mattone.

“This Home Depot will cement the redevelopment of downtown Jamaica,” says Mr. Mattone, who is developing the site with Starwood Ceruzzi of Fairfield, Conn.


Officials are excited about Ms. Stark’s interest in a Far Rockaway project. “Ms. Stark’s interest in making deals in Far Rockaway and elsewhere will generate huge opportunities for the development of the borough,” says Queens Borough President Helen Marshall, who has been involved in the talks.

The half-empty mall, which is located near an A subway stop and a Long Island Rail Road station, is primarily used as a parking lot by commuters. Developing the site will bring several hundred jobs to the area, says Curtis Archer, executive director of the Rockaway Development and Revitalization Corp. “I can only say great things about Ms. Stark for showing interest in this deal,” he says. “A lot of great things can happen in Far Rockaway as a result of this.”

–tommy fernandez

Tearing down buildings agency

The construction of an oversized house on Staten Island has a local politician boiling mad at the city Department of Buildings.

City Councilman James Oddo says the department’s approval of a plan for a two-story colonial in New Dorp is indicative of the agency’s inability to stop the borough’s over-development.

  • Mr. Oddo wrote three letters to the Department of Buildings saying that the house going up at 52 Beacon Ave. was larger than zoning allowed. The department eventually acknowledged that he was correct, but by then the structure was nearly complete. The department has now ordered it demolished, but Mr. Oddo predicts that the Board of Standards and Appeals will overrule that order.
  • The Department of City Planning has responded to complaints of over-development on the island with zoning changes, but interpretation and enforcement of the code is left to the buildings department. Mr. Oddo says the department is often not up to the task.


“Plan examiners approve plans that they shouldn’t approve, and then every person above them affirms their decision. You have the privates dictating to the general,” he says.

In response, a department spokeswoman says, “We do thousands and thousands of applications, and most of them are done correctly.”

Buildings Commissioner Patricia Lancaster has been reforming an agency that was in woeful shape when she was hired in 2002, the spokeswoman adds. Many in the building industry agree.

But Mr. Oddo says that he and other council members are plotting strategies to revamp the department. “This agency is broken,” he says.

Developers pitch area at shopping center convention

Developers pitch area at shopping center convention

Retail space on the site of the former Northville Psychiatric Hospital will be among the projects being marketed by the more than three dozen Michigan mall developers, retail brokers and municipalities who will make their way to Las Vegas this week.


  • They’ll be among the 45,000 people and more than 1,400 exhibitors from across the country expected to attend the annual International Council of Shopping Centers spring convention, which began Sunday and runs through Wednesday.

The conference is a fast-paced environment where companies can discuss many deals in a short time, said Karen MacDonald, director of communications for Bloomfield Hills-based Taubman Centers Inc.


“It’s where conversations begin, continue, or sometimes are completed,” said MacDonald, who said Taubman has lined up more than 600 meetings for the conference. “It’s also a terrific networking opportunity.”

Taubman plans to promote its casino retail projects, including MGM CityCenter, a $7 billion project expected to open in November 2009 on the Las Vegas strip.

Taubman is doing retail leasing for the 18 million-square-foot project, which is expected to include a 4,000-room hotel and casino, two 400-room non-gaming hotels, luxury condominiums and about 500,000 square feet of retail, dining and entertainment venues.

The company also is looking to lease space at The Pier Shops at Caesars, a casino retail center that opened last year in Atlantic City, and Macao Studio City, a casino resort under development in China.


MacDonald said Taubman believes it will be able to generate deals for those projects, as well as local retail centers such as Twelve Oaks Mall and The Mall at Partridge Creek.

“We feel that the retail climate is very positive,” she said.

Southfield-based Schostak Bros. & Co. Inc. said it will market the retail component of Highwood, an $800 million mixed-use project it hopes to develop at the former Northville hospital site.

  • The project is planned by REIS-Northville L.L.C., a joint venture between Schostak and Southfield-based Real Estate Interests Group Inc. The project is on hold because Northville Township rejected the joint venture’s appeal last month to develop the 415-acre project.
  • REIS wants to build 42 acres of retail on the site, but the township wants the retail portion cut back to 25 acres. The joint venture plans to decide its next steps, including a possible lawsuit, within the next month, said Steve Mitchell, chairman of East Lansing-based Mitchell Research & Communications Inc., which represents REIS.

Other projects being pitched by Schostak include Gateway Office Center, a mixed-used project it hopes to develop at I-696 and Woodward Avenue in Royal Oak, and The Lofts at Merchants Row in Detroit.

Downtown Detroit locations such as the Statler-Hilton Hotel site and the east riverfront will be part of the DEGC’s presentation this week, President George Jackson Jr. said.

“If you see an empty building, we’re pushing it,” he said.

Jackson and several teams of DEGC representatives will meet with retailers they hope to bring downtown, as well as into the six areas that are part of the city’s $225 million, five-year neighborhood revitalization program. The DEGC will promote city-owned sites along with private properties, such as 20,000 square feet of retail space at the Detroit Opera House garage.

  • Jackson said the city also will ask retailers to considering placing their distribution centers at Detroit industrial sites, such as Springwells Industrial Park, Jackson said.
  • Cleveland-based Developers Diversified Realty Corp. will showcase Bloomfield Park to retailers at the convention next week, said Scott Schroeder, vice president of marketing and corporate communications.

Developers Diversified is developing the center at Square Lake and Telegraph roads in a joint venture with New York City-based investment manager Coventry Real Estate Advisors and Bloomfield Township-based Harbor Cos. The mixed-use development’s first phase, with a projected cost of $250 million, is slated to include a 535,000-square-foot lifestyle center, 67,000 square feet of office space and 60 luxury condominiums.

Schroeder said last week that the company would hold a Sunday kickoff meeting to discuss projects that it plans to highlight in more than 1,000 meetings at the convention.

“Bloomfield will be featured during that presentation so our entire team understands what’s left to lease and what our objectives are,” Schroeder said.

Sheena Harrison: (313) 446-0325,

* * *

What’s being pitched

Among the developments and sites being marketed to retailers this week:

Taubman Centers: MGM CityCenter in Las Vegas and The Mall at Partridge Creek in Clinton Township.

Schostak Bros. & Co.: Highwood in Northville Township and The Lofts at Merchants Row (above) in Detroit.

Detroit Economic Growth Corp.: The Statler-Hilton Hotel site and retail space at the Detroit Opera House.

Developers Diversified Realty Corp.: Bloomfield Park.

Prosecutor takes 1 million CDs from shopping center

Prosecutor takes 1 million CDs from shopping center


The seriousness of the piracy problem in China was recently brought to the forefront when the Guangzhou City’s public prosecutor’s office uncovered one million suspected counterfeit compact discs. Agents from the local prosecutor’s office raided the Yat Shing shopping center whose 40 music stores were all found to be carrying allegedly pirated records. The CDs were being sold at $1.15 apiece retail and 95 cents wholesale.

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HONG KONG–The true scope of China’s piracy problem was demonstrated last month by the public prosecutor’s office of Guangzhou City, which revealed that in one four-hour raid it uncovered 1 million allegedly pirated CDs.

The Yat Shing shopping center is five minutes from Guangzhou’s railway station and two hours from the affluent streets of Hong Kong. Once the Sept. 28 raid started, it took 30 officers from the local prosecutor’s office about an hour to realize that each of the mall’s 40 music stores was crammed with allegedly pirated records, and that they would need a fleet of trucks to haul them away.

The biggest problem was stopping store staffers, caught on a hidden camera, from packing hundreds of thousands of dollars from the day’s sales into garbage bags before drifting away into the crowd, according to a spokesman from the prosecutor’s office.

By the end of the raid, cartons of allegedly counterfeit CDs by Hong Kong and Taiwanese artists, as well as by Elton John, Whitney Houston, Billy Joel, the Beatles, Kenny G, and a dozen other Western stars, blocked the streets outside. The CDs were retailing for $1.15 and wholesaling for 95 cents.

It was a welcome success for the powerful prosecutor’s first-ever piracy raid. Foreign pressure demanding protection for intellectual property has been growing more vitriolic, and Beijing needed some high-profile results.

But the celebration at IFPI headquarters in Hong Kong, which had helped instigate the actions, was cut short by a heavy dose of reality.

  • Within days, Yat Shing’s stores would be nearly restocked, and 10 similar distribution centers throughout the southern province of Guangdong would be quietly dispersing 5 million-10 million illegal units.


“It makes the worst estimates [of pirate CD production] all that more real,” says J.C. Giouw, IFPI’s regional director. Chinese CD factories have a reported capacity of 85 million units annually. Government figures also show annual sales of about 10 million CD players throughout China, fuelling demand for cheap records.

  • As the world’s most publicized offender, China has been passing anti-piracy laws almost monthly to get in line with international laws and standards, and to improve its own domestic situation.
  • Hong Kong has become the major site in the China piracy confrontation. The major international record companies have their regional headquarters in the territory and are watching up close as revenues are siphoned off.

The IFPI estimates that Hong Kong’s market, worth $125 million in 1993, has lost about 30% of overall music sales to pirates during the past 18 months. Even so, first-half industry shipments this year showed an 11% rise in CD units and a 14% increase in dollar value over the same period a year ago. Local executives say the upturn was due to a greater number of major-artist releases.

“The situation is not improving much right now,” says Giouw. “We are looking at an overall drop for 1994, but what’s happening in China makes next year look a lot better.”

  • What would help are tougher penalties for offenders in Hong Kong, some observers say. Local law carries a maximum fine of $130 per copy and a maximum jail term of one year for offenders. Neither maximum has ever been imposed. These penalties are the lowest in Asia, including China.

Supported by a recent survey done for the IFPI which claims that 85% of local residents believe piracy should be eradicated, Giouw plans to lobby the government for tougher penalties. Only 38% of the locals surveyed say they buy CDs, and only 12% of those admit to buying counterfeits.

The survey also shows that 15-24-year-olds, previously thought to be the biggest buyers of pirate products, are not the worst offenders; that status goes to the over-25 demographic.