Fresh off renovation, Tysons Galleria rides ‘luxury’ tailwinds to success out of pandemic

Tysons Galleria has finished redeveloping the wing formerly filled by Macy’s (staff photo by Angela Woolsey)

Tysons Galleria may be closer to fully realizing its visions of luxury than ever before after a reportedly successful redevelopment of its former Macy’s store.

Created by subdividing the 260,000-square-foot department store, which closed in January 2019, the new wing is “effectively 100% leased” and has helped expand the mall’s offerings, particularly when it comes to home decor and entertainment, according to owner and developer Brookfield Properties.

“I think the Macy’s redevelopment is a great example of what Brookfield does,” Joe Hope, Brookfield’s senior vice president of leasing, said. “We took a 30-plus-year-old department store and reimagined that into a collection of categories and uses that we felt would be an additive to our merchandizing mix.”

Over the past couple of years, Tysons Galleria has doubled down on the high-end retailers that have cemented its reputation as the upscale cousin to its neighbor across Route 123, Tysons Corner Center.

Recent additions have ranged from fashion brands like Dior and Balenciaga to a slew of furniture stores, including Arhaus and a combined Crate & Barrel and CB2. The renovated wing also hosts Bowlero, the dine-in movie theater CMX CinéBistro and the restaurants, Yard House and Jiwa Singapura.

Though Brookfield didn’t provide specific numbers, Hope says that, so far, the sales performance of those newcomers “has exceeded our and their expectations,” noting that some tenants like Crate & Barrel had relocated from other sites in the area.

“A number of those brands existed in the trade area and just repositioned from prior locations to Tysons Galleria,” he told FFXnow. “Those stores, they’ve reported to us are generating significantly higher sales. So, it really proves the mix of the environment that we created in that wing is working for them.”

Far from being an obstacle, Tysons Galleria’s commitment to luxury retail buoyed it through the economic turmoil spurred by the COVID-19 pandemic, according to Hope and Brookfield Senior Director of Leasing Elizabeth Ryan.

In general, luxury brands have been relatively insulated from the impacts of inflation and other financial challenges, with research indicating customer demand across income levels, Retail Dive reported in February.

Whether that continues remains to be seen, as some companies reported slowing sales in late 2022, and a survey by the consulting firm PwC found that 53% of consumers plan to reduce spending on premium and designer products.

Like other malls in urban metro areas, Tysons Galleria took some hits when businesses shut down and office workers shifted to their homes early in the pandemic, but there hasn’t been any “sustained negative impact,” Hope says.

According to Ryan, the mall still sees its heaviest traffic on weekends, but working from home has afforded many customers more flexibility with their schedules, resulting in “some really nice pops” on weekdays.

The mall’s expansion into entertainment has also been “a wonderful addition,” she said, citing some families who have ventured to Tysons from downtown D.C. for kids’ parties at Bowlero.

“It’s really been an interesting and very exciting phenomenon and being able to offer these entertainment options that just didn’t exist before,” Ryan said. “I think there’s also been some anecdotal evidence that suggests the guests at the Ritz Carlton also enjoy the options that we are providing…That is a broadly international customer that the Ritz brings to Tysons Galleria.”

The Galleria has experienced some bumps. The departure of Urbanspace earlier this year, for example, turned the third-floor food hall into a void, with Andy’s PizzaEmpanadas De Mendoza and Twelve Twenty Coffee as the only remaining vendors.

However, Ryan says Brookfield has “very exciting plans” for that third level.

“I think you can safely say it’ll be in the next 12 to 18 months,” Hope said on when details about those plans will be announced. “…There’s a runway of time needed to exit a strategy before you can kick off the replacement strategy, so we’re well underway with that as we speak.”

Upcoming tenants that the property owner can confirm include the fashion brands Dolce & Gabbana, Marc Jacobs, St. John, Rhone and Indochino, along with an Alo Yoga studio. All of them are expected to open in time for the winter holiday shopping season, which typically kicks off around Thanksgiving.

With luxury retail “enjoying some really, really strong tailwinds,” the pandemic hasn’t altered Brookfield’s vision for Tysons Galleria, Ryan says.

“We will continue to curate the best in class, high-performing luxury retail,” she said. “That will also be alongside…really exciting food and beverage concepts, up-market entertainment options and high-quality local and regional businesses.”

Read more on FFXnow…

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