In their adopted hometown of Edmonton, Alta., the immigrant Ghermezian brothers — Eskandar, Nader, Raphael and Bahman — are figures swaddled in rumor and mystery. Fiercely privacyminded, they refuse to divulge their exact ages and are rarely photographed together. Their rapid-fire conversations in Farsi and French often befuddle English-speaking business peers. But from behind that fog, the four Iranian natives have created one of Canada’s biggest and most spectacular real estate baronies and are quickly expanding their razzle-dazzle fiefdom southward. Before long, U.S. consumers will get a full exposure to the revolutionary marketing flair of the Ghermezians, who have combined a Disney-style entertainment vision with their own shrewd merchandising sense to produce the latest in suburban shopping temples, the megamall.
The prototype of the Ghermezian consumer center is the West Edmonton Mall, a $750 million garden of retail delights located 350 miles north of the Canada-U.S. border. Far and away the world’s largest shopping mall, the sprawling indoor complex is crammed with 836 stores, 110 restaurants, 20 movie theaters and a 360-room hotel. Covering 5.2 million sq. ft., or the equivalent of 108 U.S. football fields, the West Edmonton Mall is twice the size of North America’s runner-up shopping mall, the Del Amo Fashion Center in Torrance, Calif. The dimensions loom even more impressively in relation to Edmonton’s population, only some 683,000.
Nonetheless, more than 100,000 people a day, as many as 40% of them from the U.S., travel to the Edmonton complex, and with good reason. The Ghermezian mall contains a mammoth amusement park, with entry free of charge. Fully integrated into the retail complex, it comes complete with roller coasters and carrousels (47 rides in all). The mall also boasts an 18-hole miniature golf course and a $5 million hockey rink where Superstar Wayne Gretzky practices with the Edmonton Oilers. The center’s Waterpark sports a 600-ft. water slide and a 2.5-acre artificial lake featuring a replica of the Santa Maria and four yellow, 40-ft. submarines that take tourists on $4 “undersea” adventures.
Consummate merchandisers, the Ghermezians were looking for ways to lure retail shoppers in a thinly populated region where the winters are long and temperatures often dip to -40 degreesF. Much of their concept is blatantly borrowed from Disneyland — right down to the name of their amusement park, which they have dubbed Fantasyland. (Walt Disney Productions is suing over use of that name.) But the Ghermezians view the delights of their pleasure dome unsentimentally. “We do not make money on the entertainment,” says Eskandar, fortyish, one of the less secretive of the brothers. “We make money on the retail sales. But it is the entertainment that brings in the people.”
The Ghermezian approach is indisputably successful. Sales revenues for the complex last year totaled $560 million. That take is the equivalent of $280 per sq. ft. of retail space, which is twice the rate of a typical U.S. retail outlet.
The Ghermezian retailing spectacular is already sprouting a U.S. branch. The brothers will break ground next spring on another consumer kingdom, planned to be twice the size of the West Edmonton Mall, in Bloomington, Minn. The Ghermezians are also encouraging a bidding war for a third development, to be erected near either Toronto or Niagara Falls. Says Brother Nader: “The final choice will depend upon which is most anxious to have us.” New York is definitely eager. The state has offered the Ghermezians a free 100-acre site for the project just 200 yds. from the falls, a low-interest $200 million loan, a decade of cut-rate hydroelectric power and a waiver of sales taxes on building materials.
Shrewd negotiating tactics are a familiar part of the Ghermezian success story. The family gained a North American toehold when Patriarch Jacob Ghermezian, now 86, moved to Montreal from Tehran in 1959. The family began selling Oriental rugs door to door, then opened a Montreal retail outlet, which within five years blossomed into a chain of 17 stores. The leap to real estate came in the 1960s, when the Ghermezians began snapping up land in Edmonton for as little as $100 an acre while the oil boom got under way and later sold some of the property for $47,000 an acre. The proceeds were poured back into the family’s privately held Triple Five development company.
Today, Triple Five, with $4.3 billion in assets, ranks as one of Canada’s largest firms. In addition to their megamall in Edmonton, the Ghermezians operate six hotels in the area and a popular local nightclub called Goose Loonie’s that features rock bands and dancers in skintight Lycra outfits. The family empire also includes several high-rise apartment buildings in Edmonton and housing developments in the city’s sprawling suburbs.
About business matters the Ghermezians are utterly reticent, refusing even to reveal which sibling holds what executive position within Triple Five. One thing on which they emphatically and publicly agree, though, is the motive behind their startling retail innovation. Says Eskandar: “I don’t work on glory. It has to make money before we will touch it.”
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