VIRGINIA BEACH

Gerald Divaris first fell for Anthropologie in 1998 when he visited one of its New York stores with his daughter, then a college student.

At the time, Town Center in Virginia Beach was just a plan – with another two years before a shovel would hit the ground. Yet Divaris knew that he wanted Anthropologie, and he wanted it badly.

An avid shopper by trade and hobby, he admired the retailer’s uniqueness, the way its personality changes to reflect its environments, its flair for distinctive merchandise. “There are accessories. There are home goods. There are eclectic frames,” he said. “There’s always something you can find that would be of interest.”

Divaris is chairman and CEO of Divaris Real Estate, which helped found Town Center and handles its leasing and management. Anthropologie was a perfect match for the development that Divaris and city officials envisioned – an open-air environment of shops not found elsewhere in the suburban landscape.

Local consumers were equally enamored of the retailer, Divaris found while conducting informal surveys to gauge their preferences.

“Anthropologie was pretty much at the top of the list,” he said. “They were a highly desirable retailer on a national platform. They still are. Everybody talks about how successful they are and what a draw they are for a center.”

In 2002, when Town Center’s first tenant opened its doors, Divaris began a dozen-year courtship that culminated last month, when his company announced that Anthropologie would open a store late this year.

Anthropologie’s arrival marks a pinnacle for retail development in not only Town Center but also the rest of Hampton Roads, a region that’s often been bypassed by coveted chains.

Anthropologie has a unique style, with airy and funky stores designed to complement the relaxed-yet-elegant bohemian clothing, accessories and home decor. It sells many of its own lines – Leifsdottir, Maeve, Pilcro and Cartonnier – as well as those of chic but less exposed designers.

“Town Center’s really been in need of some good-name retailers,” said Karen Eagle, who has taught fashion merchandising at Old Dominion University in Norfolk and The Art Institute of Virginia Beach and ran her own bridal and dress shop for 17 years. In 2011, she took a class to New York to meet with manufacturers and retailers and included a stop at Anthropologie to study its innovative window displays.

The chain targets women ages 30 to 45 but lures all types of sophisticated shoppers, Eagle said. “I know women in their 40s who love this store. You find little plates for your kitchen and buy a sweater.”

Where Anthropologie goes, its peers tend to follow. That’s partly orchestrated by Anthropologie, which required in its Town Center lease that the landlord pursue like-minded retailers to keep them company, said Louis Haddad, CEO of Armada Hoffler Properties, which developed Town Center.

“Anthropologie has a reputation in the industry about being very careful about where they locate their stores, which is why they’ve been successful,” he said. “There’s a number of other retailers that look to see where Anthropologie is locating to help them make decisions. It’s a great boost for us.”

In the next few months, Divaris said, he expects to announce another six leases, most of them retailers new to Hampton Roads – if not Virginia – and all of them spurred by Anthropologie.

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Winning a prize with that kind of cachet requires the ability to stick out among the crowd of suitors.

“The challenge for Virginia Beach, or for our region, is we are one of a number of secondary markets,” Haddad said. “The top names are going to go to the primary markets first, and then they’re going to do some percentage of the secondary markets – not all of them. So you are now in a competition with the Charlestons, the Charlottes, the Raleighs, Savannah.”

Divaris helped Town Center stick out, Haddad said. The leasing agent is relentless. He calls, emails, sets up meetings.

His company handles leasing for another shopping area near Philadelphia, where Anthropologie and its parent company, Urban Outfitters Inc., are based.

During visits there, Divaris would show up on Anthropologie’s doorstep and take its representatives to dinner, all the while talking up Virginia Beach.

“That’s what a good broker does,” Haddad said. “He constantly keeps the conversation going until the time is right to actually make a deal. You’ve got to have a tremendous amount of perseverance, which he does.”

Divaris estimated that he made about 10 calls on the Philadelphia office.

“You get met with a lot of rejection,” Haddad said. “You get met with a lot of stalling. So it takes that personality type: ‘I’m going to keep coming back until you say yes.’ ”

In Divaris’ view, Town Center sold itself.

“We have the best project in town,” he said. “It’s the best-located development that offers anybody who’s looking to do only one store in the market the opportunity to service the majority of the population that they are likely to reach.”

The hard part, Divaris said, was persuading Anthropologie to embrace Hampton Roads. Every retailer does extensive research, studying the demographics of a region before it commits. It looks at population, educational levels, average income and geography.

“How do you overcome the water and natural barriers that cause people to maybe consider this as being a divided market with the Peninsula and Southside?” Divaris said. “There’s a lot of preconceived ideas that prevent them or cause them not to consider us and consider other areas that have a far smaller population, like Richmond, to go there first.”

Potential retailers also often get the wrong idea about Hampton Roads income levels, he said. A typical report shows current salaries but misses a quirk of the local military population, which includes many retirees who receive not only retirement income but also pay from jobs in second careers.

“Demographically, we look a lot poorer than we really are,” Divaris said. “And if they determine the income levels are too low, they don’t come.”

He had to persuade them to look beyond some of those numbers. “Our job is to try to sell them on why the market is strong and why it has the revenue potential for them to succeed.”

In 2007, five years into the courtship, Anthropologie said yes. It signed a lease to take a space in Block 9, where Armada Hoffler planned to build either a sister hotel to the Westin next door or a companion apartment tower to The Cosmopolitan on the other side, with retail on the ground floor.

Then the economy drove a wedge between Town Center and its intended.

During the recession, construction came to a near standstill. Although Armada Hoffler had a good track record with lenders, it “could not in good conscience spend the money,” Haddad said. “Just because you can borrow the money doesn’t mean you should, and we felt that we shouldn’t, based on the fact that everybody had put their expansion plans on hold. We were starting to doubt whether we could fill the new facilities.”

Anthropologie was Block 9’s only signed lease. After two years, with no building to move into, the lease expired.

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Following the breakup, Anthropologie opened a dozen or so new stores each year, including a few in Europe. Town Center saw some retailers come and others go.

These days, Anthropologie is the sparkling jewel in Urban Outfitters’ crown. While the parent company’s namesake chain has struggled, and other clothing retailers suffered from bad weather and consumer doldrums during the first quarter of this year, Anthropologie enjoyed an 8 percent jump in sales at stores open at least a year, the company announced May 19.

Urban Outfitters officials did not respond to requests for an interview.

Even as it has seen financial growth, the chain has expanded slowly and selectively, said Laura Champine, a retail analyst for investment bank Canaccord Genuity. Anthropologie had 190 stores at the end of April and plans to add 15 this year.

“This is not the Gap,” Champine said. “They don’t cover the world.”

A third of Anthropologie’s sales take place online, and that helps determine where it locates stores, she said. “Before they come to your area, they know there’s a customer base there.”

Anthropologie likes “upscale centers” but could stand with a Saks Fifth Avenue as easily as a Dick’s Sporting Goods, as long the locations attract “fairly affluent” shoppers, Champine said.

The retailer tends to associate with J. Crew, Michael Kors, BCBG and Tiffany Co., she said, and its customers also shop at Pottery Barn. J. Crew, Michael Kors and Pottery Barn have stores at MacArthur Center in downtown Norfolk.

When Norfolk officials announced that Urban Outfitters would open downtown on Granby Street, they suggested it would spur Anthropologie’s interest at MacArthur Center or just outside the mall.

Divaris said it’s possible that other landlords courted Anthropologie, but he believes the company never wavered from its devotion to Town Center.

About a year ago, as Armada Hoffler embarked on the office tower in Block 11, Divaris and Anthropologie reconnected. The retailer expressed immediate interest, he said.

Haddad recalled more work involved in the reconciliation – over about 18 meetings in nine months.

“They understand that they’re the lead pony, if you will,” he said, “but they also know that they do best when they have a cluster of tenants around them who are catering to the same demographic.”

Anthropologie agreed to take almost 10,000 square feet, at the larger end of its typical store range. It gave Armada Hoffler a list of “acceptable co-tenants” and a desired number that they need to lease. If they don’t provide such a dowry, the terms of the deal are less favorable – the percentage of the store’s sales that the landlord will collect depends on the other retailers it delivers, Haddad said.

“In their mind, the more of those tenants you get, the higher their sales will be, the more they’ll be able to afford the location.”

Those on the desired list would need more space than Block 11 will have. But Town Center lost two restaurants last year – Red Star Tavern and Guadalajara – giving the owners an opportunity. They have turned down other restaurants that have come courting and decided instead to hold on to those spaces for new retailers.

“We’re going to take our time,” Haddad said, “and we’re going to see if we can’t do something spectacular.”

Divaris said he expects Anthropologie’s commitment to Town Center will lead other retailers to say, “Well, if it’s good enough for them, it must be good enough for me.”

“But,” he added, “it’s a long way from that statement to actually getting a signed lease, believe me.”

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Carolyn Shapiro, 757-446-2270, carolyn.shapiro@pilotonline.com

Sarah Kleiner Varble, 757-446-2318, sarah.varble@pilotonline.com

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Posted to: Business Consumer – Retail Virginia Beach