Stores in the St. Louis Galleria are now banned from showing signs, insignias, decals, or any other ad or display devices promoting or encouraging online shopping, even at their own Web sites.
The Wall Street Journal says the letter stunned some store owners and inspired a retaliatory threat from another, with toy retailer The Right Start threatening litigation over "the illegality of (the Galleria's) tactics". The paper says the Galleria's move may indicate a growing trend among mall owners indicating they fear losing store rental income to e-commerce.
"In an era when many retailers brandish their Internet addresses on their shopping bags," the Journal says, "an e-commerce ban is a harsh move…Mall tenants typically pay a base amount of rent plus a percentage of sales that can range from about 4 percent to 10 percent of their total rental payment."
The Galleria is owned by Hycel Partners, whose president Mark H. Zorensky tells the paper sales rung up on the Internet aren't rung up in the stores. Zorensky also says retailers encourage online customers to bring returns to the "brick and mortar" stores, "and, conceivably, the retailer could charge online returns against store sales."
Zorensky acknowledges there is no way to stop the Internet, "but what we're trying to stop is the retailer blatantly redirecting sales from the mall to their Web page."
But the Journal says there's little evidence so far that Galleria stores are complying, although Zorensky says some stores are. The paper says it isn't known yet whether other large shopping malls are going to follow suit.
