"To explain how business works in Russia today, Ivan [a Russian entrepreneur] told this story: 'Two people meet. The first one says, "You want to buy a cartload of sugar?" The second one replies, "Yes, fine." They agree on a price. . . . Then the first one goes to see if he can buy a cartload of sugar, and the second goes to see if he can find some money."

-- From Russia 2010 and What It Means for the World, by Daniel Yergin and Thane Gustafson (Random House, 1993)

If the Lab didn't exist, it would have to be invented, but since Shaheen Sadeghi has already done that, the rest of us can now watch his daring attempt to revolutionize the shopping mall. What Sadeghi has created in Costa Mesa, Calif., is nothing less than an antimall.

And what exactly is an antimall? "You simply take all the characteristics of a mall," explains Miriam Meglan, a retail securities analyst with M. Kimelman & Co., "and invert them." For example, the traditional mall is enormous, running up to 1 million square feet; the Lab, in contrast, has 25,000 square feet of space in old, renovated factory buildings. Traditional malls are almost always anchored by chain stores with mall-oriented marketing strategies; the Lab's anchors are Tower Records and Urban Outfitters, two hot retailers that generally avoid malls. Most of the Lab's other tenants are small one-of-a-kind stores. And only 60% of the space is devoted to retail businesses of any kind. The rest is used for events designed to foster a sense of community, including live blues and jazz concerts, and fashion shows staged by local high school students.

Sadeghi thinks America's small manufacturers are ready for the antimall. "There is no real estate developer in this project. It's just me. I come out of manufacturing, and I can tell you there's incredible product coming from a whole generation of small manufacturers who have no way to reach the American consumer. That's what the Lab is all about."

Meglan thinks consumers are also ready for the antimall. "The current retail industry is a disaster for consumers," she says. "The entire system is designed to move huge amounts of goods through low-cost distribution channels. The effect is to leave shoppers feeling brain-dead." Meanwhile, Meglan sees consumer tastes moving in the direction of what she calls "the item" -- that one pair of shoes, one article of clothing, one piece of furniture that is of high quality, affordable, and different.

"This is a classic entrepreneurial opportunity," says Meglan. "Given the economics of retailing, large companies cannot do this. This will be the domain of small business."

Published on: May 1, 1994