CONSIDERED BY MANY to be the go-to luxury shopping destination for the entire state of Indiana, The Fashion Mall at Keystone is being transformed. Saks Fifth Avenue closed its doors for good in July, with Indianapolis-based Simon Property Group set to break ground on a mixed-use addition in the space where the luxury retailer had operated for 21 years—second only to Nordstrom in square footage—early next year. (In case you were wondering, ease of parking and shopping during the impending holiday season won’t be affected by these plans.) It’ll be fully completed by the end of 2026. Asked about the overall financial investment in the mall, Simon’s president of development Mark Silvestri would only say “tens of millions of dollars.”

Some shoppers were no doubt stunned at Saks’ seemingly sudden departure. But it turns out that behind the scenes, it was far from abrupt. Silvestri says Saks’ lease “was coming to an end, with no further term, so we’ve known about it for a while.” That’s how Simon was able to almost simultaneously announce the departure and the plans for the new addition, which will cover 170,000 square feet in and around the southeast end of the mall.

“The reason Saks left had nothing to do with the performance of the mall. Actually, it was so good that Saks couldn’t afford to stay,” says John S. Talbott, a senior lecturer of marketing at Indiana University’s Kelley School of Business. “That space is so much more valuable to Simon without Saks. If Saks could pay the $500-a-square-foot to be there, I’m sure they would have.”

Talbott has firsthand experience with Simon. He spent 36 years in retail, including four years as CEO of a Western lifestyles store “on the other side of the table negotiating with them.” He knew Saks “faced headwinds or a challenging business model.”

According to Retail Brew, which covers the retail industry, Saks had apparently struggled with liquidity, with many vendors accusing the chain of not paying them on time or at all. In April, however, Saks “landed up to $60 million in incremental liquidity” from a lender to help pay those debts.

So, well before the store locked up and left, Simon was finalizing plans for the addition. There was no shortage of hopeful new tenants, which is not surprising. Silvestri says the property ranks among the top 50 of its 90-plus U.S. malls when it comes to productivity. “Especially given that Indiana is a modest-size market,” he says, “it’s a super strong property for us.” The Fashion Mall’s occupancy hovers around 97 percent, housing 60-plus brands unique to Indiana or only available in that location. It doesn’t hurt that those include the most sought-after luxury labels. Think Gucci, Louis Vuitton, Tory Burch, and Tiffany & Co., with a David Yurman jewelry store soon joining the mix.

Although West Elm recently departed The Fashion Mall for Nora Plaza, other in-demand retailers arrived, including trendy activewear boutiques Alo and Vuori, Gorjana with its California-cool jewelry, and Aritzia, a Canadian retailer selling “luxury lifestyle apparel” that’s soaring in popularity. Even Daniel’s Vineyard of McCordsville is getting in on the action, launching a pop-up across from Levi’s where they hold wine tastings Fridays through Sundays, with the space serving as an art gallery during the rest of the week.

Silvestri says Simon’s second-quarter earnings this year were record-setting, “the highest-net operating income ever.” At a time when malls seem all but doomed to obsolescence in an online-shopping world, our very own Fashion Mall is, in a word, “over-performing.” Silvestri says that to be able to do that, “you have to have great real estate, and it has to be well-located.” The Fashion Mall nails it on both counts.

But Talbott insists there’s more to it than that. He says Simon, which is the largest mall owner in the United States, is usually a step ahead of the curve. In this case, they’re leading the way in what Talbott calls experience centers. “They bring together these mixed-use communities, almost, which is at the forefront of what shoppers, and people in general, now want in their lives.” Those include not just the right mix of stores but also new dining and entertainment options—which is what we’re getting in this next iteration of the mall.

Silvestri says Simon will keep a third of the Saks building because it’s “cost-effective, has good bones, and we can utilize that.” The rest, the exterior not attached to the mall, will be demolished. Plans for the site include a standalone home furnishings store, a handful of new retailers, some sit-down and quick-serve dining, an outdoor plaza with green space, and, at the eastern end, up to 100,000 square feet of upscale office space with possibly as many as four large tenants. “We’ve heard from brokers and others that there’s a real need for this, so we think it’s something that will enhance the property,” Silvestri says.

Talbott calls that a smart move. “Say there’s a Merrill Lynch office in one of those spaces,” he explains. “Maybe while one member of the household meets with a financial advisor, another one goes shopping. Then those financial advisors need to eat, so they meet clients at a nice restaurant there. Those people not only pay rent, but they patronize the facilities at the retail center.”

Also in the works? An entertainment venue, which Silvestri declined to specifically identify as of press time. But he did provide a clue, noting that while the entity will be new to Indianapolis, it is already successful elsewhere. So it may be worth noting that in June 2024, Simon announced a partnership with Camp, which bills itself as a “family experience company.” A news release describes it as “part toy store, part activity destination, all good vibes” and further says it “delivers immersive fun for the whole family.” There are currently three Camp locations at Simon malls in Philadelphia, Houston, and Burlington, Vermont. The press release also noted, “This expansion initiative reinforces Camp’s and Simon’s commitment to bringing delightful experiences and exclusive retail offerings to families across the country.”

Again, there’s no confirmation that a Camp location is coming to The Fashion Mall, but that certainly seems to be a logical possibility, since those appear to be both popular and profitable for the Simon malls that have already landed one. Also, it fits the “shop, dine, play” evolution of “experience centers.” A second possible contender is a chain of venues represented at a half dozen Simon Malls, Round1—a group of sprawling amusement facilities aimed at pleasing just about every member of the family with arcade games, billiards, karaoke, pingpong, darts, trampolining, roller skating, children’s play zones, and more.

We also know housing and hotels are big parts of Simon’s portfolio, with some connected to malls. In May 2024, the company announced plans for a “luxury lifestyle mixed-use development” at San Diego’s Fashion Valley mall. A news release at the time promised the addition will be “a vibrant, diverse and exclusive residential enclave … mere steps away from their favorite Fashion Valley boutiques.”

Although Simon hasn’t yet gone that route in Indiana, the plans underway in San Diego may foretell things to come. After all, it’s hard not to notice the Sheraton Hotel and connected 12-story apartment tower, called Vitra, on the north side of The Fashion Mall. While neither is owned by Simon, a skybridge conveniently links them to the mall. The new attractions ahead will only enhance the appeal of these locations and lure more residents and travelers to stroll over to spend their money.

One might wonder what, if anything, The Fashion Mall’s follow-up act could possibly be after all of this. When asked if there will still be space to expand again down the line, Silvestri acknowledges, “There are always ways to do that. You could go vertical or do parking garages. But not now.”

Those nostalgic for their high school days when they kicked around the mall for hours with friends, browsing and sipping an Orange Julius, may get to relive their youth. At least a little, anyway. Dana Olsen, who worked in the corporate office of Bloomingdale’s in New York City before joining Indiana University’s Kelley School of Business where she teaches retail marketing, agrees that retailers must learn to adapt to survive. “I believe [Simon] is doing what they need to do, which is transitioning malls. They’re listening to the customer.” She pauses, then adds, “It’s kind of getting back to what malls were when people would spend all day there.”