Items Fly Off the Shelves at Minneapolis-St. Paul International Airport

Like many busy "malls," the airport is drawing more tenants. This year it's in the midst of an expansion that will add 10 stores and four restaurants.


"Everyone is trying to give their airport a local feel," said Anderson.

The Minnesota presence at the airport includes Creative Kidstuff, The Red Balloon Bookshop, Dunn Bros., Select Comfort and French Meadow Bakery.

In Red Balloon's case, it was approached by one of the firms that manage restaurant and retail operations at the airport. The firm asked if Red Balloon would like to be part of the news store operating on the C concourse.

Essentially, Red Balloon provides its name and expertise to the bookstore operators, said co-owner Carol Erdahl.

"We select the books and have been involved with some design features for the store," said Erdahl. "We try to keep it much like the Red Balloon is on Grand Avenue (in St. Paul)."

Red Balloon gets a percentage of the children's book sales at the airport store.

"And it gives us visibility," said Erhadl. "We have a lot of folks call us and say, 'We saw you at the airport.' "

The Dunn Bros. coffee shop at the airport is a franchise store.

"We are certainly happy with what they have done out there," said Dunn Bros. CFO Dave Osdoba. "They tend to have a higher level of sales -- and rent."

OPPORTUNITIES

A.

irport retail provides special opportunities and challenges, said Carole Howe, founder and CEO of CBR Inc., a Twin Cities firm that has focused on airport retail for more than 30 years.

"In an airport, you have more traffic," said Howe. "Therefore, your sales will be higher per square foot. But your costs are higher."

Leased space can be three, maybe four times as expensive as it is in malls, she estimated.

Merchants have to pay higher wages to compensate workers for more challenging commutes, especially the requirement to pass through airport security to get to work.

Operators know changes in airport security procedures, industry bankruptcies, rising jet-fuel costs and shifts in air service can put a serious crimp in their sales.

The worst-case scenario is the loss of an airline or major cut in flights, Howe said.

"It all boils down to people walking by your door," she said. "As enplanements fluctuate, your business fluctuates."

Despite the airline industry's ups and downs, the trend is toward more air travel. U.S. airlines carried about 750 million passengers last year, some 40 million more than at the beginning of the decade. The federal government expects they'll fly 1 billion people by 2015.

"Airport retail will continue to grow, although maybe at a more moderate pace," Howe said. "But I believe it is a viable industry."

Typically, management firms such as HMS Host, Delaware North Cos., CBR and Creative Host contract with airports to provide retail and restaurant services. The management firms will either develop and implement their own retail concepts or work with established retailers to get their brands in airports.

Airport shoppers are looking for something different, something that will entertain them, said Howe.

CBR's airport merchants include established brands such as Creative Kidstuff, Dept. 56 and Field & Stream. But CBR developed most of the retail concepts it has brought to airports. They include Radio Road, a women's clothing store; Toto, a gift store; and Ciela, a jewelry store.

With airport shops limited to perhaps half the space allotted their mall counterparts, product selection is especially important.

"They have to have a 'cool' factor," Howe said. "Hopefully, they're things that can't be easily found in other places."

"Unnecessary extravagances" foster window shopping and impulse purchases, she added. And there are lots of them at the airport.

For instance, the Nevada Bob's shop at the airport offers a golf edition of Monopoly, $39.99. At the Naturally Cashmere/Tumi Luggage shop, you can pick up a $32 leather valet key fob or $1,050 cardigan sweater.

The Harley-Davidson shop at the airport doesn't sell choppers but it hawks an array of biker T-shirts exclusive to the store. They sell for $26 to $37.

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