BIG SALE MAY BE IN STORE FOR MALL.

Byline: Brent Hopkins Staff Writer

SHERMAN OAKS - The owners of Westfield Shoppingtowns have entered into negotiations to buy the landmark Sherman Oaks Fashion Square, sources close to the deal said Friday.

Neither Westfield America Trust nor Sherman Oaks Fashion Associates would confirm that talks are under way, but the sources said a deal was close to being completed.

Adding one of the San Fernando Valley's most prominent, strongest malls to Westfield's burgeoning portfolio - including Westfield Shoppingtown Topanga and the Promenade to the west and the mall in Century City to the south - would cement the real estate investment trust's footing in some of Los Angeles' wealthiest areas.

Terms of a possible deal were not available, but the property alone was assessed at a value of $128,547,215 in 1996 when current owner Sherman Oaks Fashion Associates purchased the center. Property values have soared since then.

``I wouldn't be surprised,'' said Roberto Barragan, president of the Valley Economic Development Center. ``They've been in expansion and they look for select properties. With (Fashion Square's) Central Valley location, it's great, because for all intents and purposes, you have nothing in East Valley of that quality until you get to Burbank.''

The mall opened at the corner of Riverside Drive and Woodman Avenue in 1962, originally as an open-air center. Its tenants have changed over the years, with a third anchor tenant, I. Magnin, closing in 1990 when the mall was enclosed. Currently, it boasts 120 tenants at its 848,965-square-foot site, with leasing near 100 percent. With its wealthy consumer base - its shoppers have a median $87,000 annual income - the mall has continued to perform at a decent clip throughout the economic woes of recent years.

Business experts said the purchase would be a shrewd pickup for Westfield, giving it a lock on the premium market in the Valley. With Nordstrom at the Topanga mall in Canoga Park and Bloomingdale's in Sherman Oaks, the operator would have the top quality retailers of record for the area.

``In this area of the Valley, we're the only high-fashion center,'' said Shana Yao, the center's marketing director. ``We provide a pleasant shopping environment for families to enjoy an afternoon.''

She refused to comment on the possible sale.

If the deal goes through, combined with its Century City mall, Westfield also would surround the coveted Bel-Air demographic, where the median household income is above $300,000 annually. With six centers throughout the region already, this would focus the chain's marketing power in a concentrated swath.

``That fascinates me because that gives them three in a row,'' said Bruce Ackerman, president and chief executive officer of the Economic Alliance. ``Based on what I've seen at Topanga and Promenade, they seem to bring a lot of new energy, so it would be positive for Fashion Square.''

Jack Kyser, chief economist for the Los Angeles County Economic Development Corp., said there are concerns about Westfield's branding strategy. Although its bright red banners, massive signs and Spartan environment quickly differentiate its sites from those of competitors, there has been consumer backlash against what Kyser termed ``the cookie-cutter approach.''

``They're going to turn it into Westfield Shoppingtown,'' he said. ``You have two schools of thought on that - you create a family of malls that all look alike. But right now, there's a rebellion in retail against the sameness, the dullness.''

Indeed, the best locally received developments in recent years have been outdoor centers like Trizec Properties' Paseo Colorado in Pasadena and The Grove in Los Angeles' Fairfax area, opened last year by Caruso Affiliated Holdings.

Fashion Square has eked out its niche as the site for serious shoppers, advertising under the campaign ``100% Pure Shopping,'' which could be diluted under Westfield's imprint.

``They've got to check and see how their concept works,'' Kyser said.

``Is this going to appeal to that market, or will they start losing their edge to shopping malls with more personality? Right now, the personality-plus mall is The Grove, which you can just whip right over the hill (from Sherman Oaks) to get there.''

CAPTION(S):

2 photos, map

Photo:

(1) Lunch-time shoppers pass through Sherman Oaks Fashion Square on Friday. Westfield may purchase the mid-Valley mall.

(2) Jeff Lass plays background music Friday at Sherman Oaks Fashion Square, which may come under new ownership soon.

Joe Binoya/Special to the Daily News

Map:

Westfield Shoppingtowns

Fashion Square Sherman Oaks