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Models from 100% Capri walk through the Bal Harbour Shops in Miami, advertising the store’s clothing.
Photographer: Scott McIntyre/Bloomberg
Malls across America are dealing with what’s been called the “retail L
apocalypse:” the looming death of an industry unable to cope with the
shifting shopping habits of consumers. Clothing retailers close stores by
the thousands as households shift spending to travel, eating out and other
leisure activities. More importantly, foot traffic continues to slow as
customers abandon the suburban mall for the ease of online shopping. U.S.
e-commerce sales are expected to account for 17 percent of all retail by
2022, up from 12.7 percent in 2017, with Amazon.com Inc. the main driver,
according to Forrester Research.
Valet attendants park shoppers’ cars as they arrive at the Bal Harbour Shops.
Photographer: Scott McIntyre/Bloomberg
Even worse for the American mall, Credit Suisse has predicted that from 20
percent to 25 percent of the complexes will shut their doors within the next
five years. It’s the kind of cultural cataclysm so total that suburban explorers
now trek through dead malls with their cameras, chronicling decay as if
they were ancient ruins.
While the malls Generation X came of age in are on death row, luxurious
versions of those dinosaurs are doing just fine. Malls such as Americana
Manhasset on the wealthy north shore of New York’s Long Island, the
Forum Shops at Caesars in Las Vegas, and the Grove in Los Angeles, often
teeming with a healthy mix of wealthy locals and spendthrift tourists. But
even among these successful swanky malls, Bal Harbour Shops stands
tallest. It regularly tops the annual list of the most productive shopping
centers in America, according to real estate research firm Green Street
Advisors. Bal Harbour Shops declined to share revenue numbers, conceding
only that it’s profitable.
Though it’s not enough for a mall to simply be near rich folks, it sure does
help, says Michael Brown, a partner in the retail practice of consulting firm
A.T. Kearney. “Those malls in the densely populated, high-income sectors
are continuing to thrive,” he says. Bal Harbour is certainly among
them. Many shoppers do come here from afar, but some live right next
door. The two towers of the equally decadent St. Regis Hotel across the
street are visible from the mall’s second floor. The Ritz-Carlton is just down
the road, with one-bedroom suites that can run more than $1,000 a night.
Between them sits more than a half-dozen luxury high-rise condominiums
lining that famous beach.
For the bulk of the U.S. retail world, the word “mall” has become a curse,
one inexorably tied to the aforementioned apocalypse. Owners prefer
“collection” or “town center” or “promenade.” Lazenby grudgingly
concedes that Bal Harbour Shops is indeed a mall, but goes on to refer to
“store clusters” as “shopping environments” instead.
There are luxury brands that still shun the internet, but Lazenby warns they
should pursue both sides of the business. “One shouldn’t be at the expense
of the other,” he says.
Inside Bal Harbour, a row of jewelry stores draws double-takes, even from
well-appointed passersby. These shiny outposts include Bvlgari, Harry
Winston and Chopard. At Graff, the biggest head-turner is a ring with an
emerald-cut diamond the size of a fingernail. These are among the few
shops at Bal Harbour whose doors are closed—even the 1 percent sometimes
have to get buzzed in. Still, the complex is generally a plush, pleasant,
materialistic paradise for shoppers with cash to burn.
Not so for the mall’s tenants, who operate in an environment best labeled
as cutthroat. Space is limited, so underperforming stores are often culled
to make room for up-and-comers (That is, except for a fancy bookstore
that earned a permanent spot on the third level). Shops are
often relocated around the mall’s main hall as they jockey to gain
additional selling space. Fashion labels such as Chanel, Gucci and Goyard
currently rank as three of the most productive stores at Bal Harbour, the
mall says.
Bal Harbour does include some stores you would see at a middle-
class mall, but their offerings are much fancier. Ralph Lauren is here, for
example, but this one is full of the retailer’s Purple Label line, the highest-
end merchandise it sells, including $5,000 silk dinner jackets and $500
bronco belt buckles. More often, though, Bal Harbour serves up boutiques
you won’t see at your local turnpike shopping center. Chanel’s shop, one of
the biggest in the mall, has a VIP lounge for the highest rollers. Its store here
is known for a selection of exotic leather bags that cost many times those of
the already pricey lambskin basics.
“It’s crazy that they would go ahead at Christmas time—a religious time of
year—and start demolishing a historic church,” one local resident told the
Miami Herald. “What a Christmas gift for the residents of Bal Harbour and
the congregants.”
The new wing of Bal Harbour Shops that will take the church’s place is
expected to open in 2023. The mall recently announced that a three-floor,
53,000-square-foot Barneys New York would be its new anchor shop.
They’re back just a few minutes later, toting a Versace shopping bag, and
hop into a yellow, half-million-dollar Lamborghini parked right in front. The
driver revs the engine repeatedly as they roll away, leaving nearby diners
annoyed.
A security officer keeps watch as women perform a traditional dance at the main bazaar of Xinjiang’s regional capital, Urumqi, in November.
Source: Bloomberg
This detention center in Hotan was identified using satellite coordinates. The United Nations
has described as credible estimates that as many as 1 million Uighurs are being held in such
camps. Local officials said it was a high school.
Source: Peter Martin/Bloomberg
“It is like if you have a child who misbehaves,” said Du Xuemei, a supporter
of the camps and the spokeswoman for Yema Group, a trading company
that operates the jewelry boutique. “The parents need to teach it right from
wrong.”
But China’s severe actions in Xinjiang are about more than forcing ethnic
minorities into line, as I saw on a recent trip to five cities in the region.
The government has spent vast sums building up cities in Xinjiang to attract
companies and fuel growth in the relatively poor region. Concerns about
lawlessness in Xinjiang could chill investment. China's campaign against the
Uighurs is aimed in part at reassuring wary investors that Xinjiang is a safe
place to live and work.
Rotterdam Moscow
Duisburg
Urumqi
Almaty
Venice Bishkek
Istanbul
Samarkand
CHINA
Athens
Xi’an
Tehran Dushanbe XINJIANG
Fuzhou
Kolkata Guangzhou
Gwadar
Hanoi Zhanjiang
Colombo
Nairobi Kuala
Lumpur
2,000 miles
Jakarta
2,000 km
Sources: Belt and Road Portal, China’s National Development and Reform Commission
That has ramifications for investors concerned about their own reputational
risk. It also poses a broader challenge to the West as China holds out its
centralized model of government as a viable alternative to Western-style
democracy. For the leaders of some poorer countries weighing different
paths to development, a top-down system may be appealing—especially if it
comes with cash to finance high-cost roads, bridges and power plants.
K A Z A K H S TA N
MONGOLIA
Urumqi
Khorgas
XINJIANG Jiayuguan
Kashgar
Hotan GANSU
P A K I S TA N
CHINA
500 miles
INDIA
500 km
Source: Bloomberg
“We have built roads for them, homes for them, given them schools,” said
Cai, 69. “Some people lack any sense of gratitude to the country and the
party.”
Many Uighurs have long resented the influx of Han into Xinjiang; some
Uighurs consider the region an independent nation called East Turkestan.
Beijing, in turn, has feared Xinjiang could peel away the same way the
neighboring Central Asian republics abandoned Moscow as the Soviet Union
collapsed.
People inspect a burned vehicle after days of rioting by Uighurs in Urumqi in 2009. The uprising
killed almost 200 people and raised concerns about how China treats its ethnic minorities.
Photographer: Peter ParksAFP/Getty Images
Almost all Han I spoke to in Xinjiang shared Cai’s view of the Uighurs as
disloyal. They said they approved of Xi’s efforts to modernize the region,
painting an optimistic picture of economic opportunities on a pacified
frontier—though it was often difficult to tell whether they were truly
speaking their minds, or repeating the official Communist Party line.
Police question them on the street, demanding to know where they’re going
and why. Metal detectors, facial scanners and document checks are routine.
Surveillance cameras are everywhere, even in some public restrooms. In
one Uighur mosque, I counted 40 of them.
The mosques themselves were sparsely attended and I never heard a call to
prayer in Xinjiang. Over time, authorities have banned “abnormal beards,”
religious names for children, fasting during Ramadan and attending lavish
weddings—part of a broader effort to assert control over all religions,
including Christianity.
Soon, a dozen more men wearing blue train conductor suits and red
armbands clambered in, pulling bags from the overhead racks and shouting
commands.
“Take this down!” “Open it!” “What’s this?” They took a young Uighur girl
into the next car for questioning. A child started crying.
When we arrived in Hotan, I approached a Uighur man and told him what
had happened.
“That’s what it’s been like every day for three years,” he said cautiously.
Some of his family members had been sent to the Muslim camps, he added,
where they spend all day studying Chinese law.
“People go for two years minimum, and many for three years,” the Uighur
man told me. “The first one or two years you can take it, but after that, you
can’t.”
Wang took my phone and erased photos and files, something that happened
repeatedly during my time in Xinjiang. “I am deleting these for your own
good,” he said, before handing it to a colleague who took down the phone’s
identifier number, presumably to track my location.
Read more: The Architect of China’s Muslim Camps Is a Rising Star Under Xi
At one restaurant a waitress wore body armor, though it was unclear why:
there is little visible crime in Khorgas. Police stations with flashing lights
dotted the road and a near-constant whir of sirens filled the air.
At the end of my time in Khorgas, Wang bid me farewell. “You are welcome
back anytime,” he said. “As soon as you arrive, I’ll appear.”
In Kashgar, another former Silk Road oasis, the full gamut of Xinjiang’s
security state was on display. Police patrolled the streets in teams of three,
wielding shields and pointed black sticks. Soldiers marched with automatic
weapons and sheathed bayonets.
One afternoon in Hotan, when the police didn’t seem to be following me, I
ventured into a coffee shop. A young Han woman came charging toward me
through the metal detector at the entrance. When she saw I was a foreigner
she burst into nervous laughter
“You scared me to death!” she said. “I thought it was the police inspecting
our security arrangements—and our guard isn’t here.” If it had been the
police, “we’d all have to go for a study session on security in the
community.”
Conditions like this would drive businesses and people away from any
Western city. In Xinjiang, the police presence is a selling point and source of
pride for some newly arrived Han.
While it’s unclear how many Han migrants have moved to Xinjiang—the
most recent annual statistics available, from 2016, showed a decline in the
Han population—the number of visitors is rising. The state-run China Daily
reported that Xinjiang attracted more than 105 million tourists in the first
eight months of 2018, almost as much as in all of 2017.
A Han man named Tian, who traveled to Xinjiang from Shanghai with his
girlfriend, said he wouldn’t have imagined vacationing in the region until
recently.
Chinese paramilitary troops attend an anti-terrorism oath-taking rally in Hotan in 2017. These
specialized troops oversee regular police, and are now a fixture in Xinjiang.
Source: STR/AFP/Getty Images
Xinjiang’s cities can’t hire police quickly enough. Official statistics show that
regional government spending on public security nearly doubled in 2017.
From August 2016 to July 2017 more than 90,000 security-related jobs were
advertised, according to research published by the Jamestown Foundation.
Xinjiang accounted for 21 percent of all criminal arrests in China in 2017.
Many Han had stories about recently graduated friends who headed west to
find work. In Hotan, I met a 67-year-old woman named Lu who moved from
Gansu province a decade ago in search of a better life. Now her sons operate
two liquor stores.
“When we first came here, the Uighurs would tell us, ‘This is our place, we
don’t want you Han here,’” she said. Now that’s changed, and she credits Xi.
“I really like him,” she said. “There are a lot more Han now and it’s very
safe.”
It’s not at all clear, however, whether the huge public investment
and police presence are spurring the economic miracle China envisions for
the region.
Xinjiang’s economic growth slowed to 5.3 percent in the third quarter of last
year, compared with 7.6 percent during the same period in the previous
year, according to government data. Growth has been propped up by fixed-
asset investment, which increased 20 percent in 2017 and was set to rise
again thanks to a new rush of government spending.
Companies are not flocking to the region. Foreign direct investment into
Xinjiang fell more than 40 percent year-on-year in the first 11 months of
2016, according to the most recent release from the local statistics office.
That year FDI amounted to 0.4 percent of Xinjiang's economy, about a third
the rate of the national average.
QuickTake: China’s ‘Project of the Century,’ the Belt and Road Initiative
“It’s one of the main tensions in the Belt and Road as a concept,” said
Jonathan Hillman, a former U.S. trade official who heads the Center for
Strategic and International Studies’ Reconnecting Asia project. “If you want
to be promoting the movement of goods and people and data, having an
overwhelming security presence is at odds with that. You need to be willing
to give up some control.”
There is little evidence that Xi intends to do that. Some of the methods now
used in Xinjiang are spreading to other Chinese cities. An anti-terrorism task
force from the former British colony of Hong Kong recently visited Xinjiang
to study local security initiatives, the South China Morning Post reported.
The neighboring area of Ningxia also signed a cooperation agreement to
learn from the region’s efforts to fight terrorism and promote "social
stability."
Some Uighurs were finding it easier to join with the Communist Party than
to resist: Perhaps half of the shadowy men and propaganda officials who
followed me during various parts of my trip were Uighur.
It was a rare moment when I had no visible minders, and we spoke over
cigarettes and warm beer. Although both worked for Chinese state-owned
enterprises, they were subject to the same threat of heading to the camps as
other Uighurs.
“All Uighurs are scared that if we do anything we will get in trouble,” the
man said. At the same time, he defended Xi’s government: “If you think
about it, those people in camps could have all been executed, but they’ve
been given a second chance.”
His girlfriend said she was angered that Uighurs were searched before they
could enter buildings.
“It’s a real problem,” she said. “And when it happens we feel really
uncomfortable. Like we’re being accused.”
Then she, too, caught herself. Like a good student, she changed her tone to
echo Xi’s party line.
“The fact that they are there says they must have been influenced by those
extreme thoughts,” she said. “They are really very uneducated—and they
need to learn.”