The South Kitsap Mall is hurting.

Or more specifically, Towne Square Port Orchard, which is located on Mile Hill Drive, is stuck in a retail Catch-22: No new retailer will invest in the space without larger customer numbers, especially in this grim economy. Meanwhile, shoppers won’t converge if there’s no large retailer to attract them.

“We need help,” said Frances Marsh, who has run a variety of businesses in the mall for 19 years. “More merchants would be nice. More customers would be nice. But if the community wants us here, they will need to participate.”

Marsh said the mall’s current merchants all stand for customer service and are pledged to provide a better level of support because most of them own their own businesses.

This was seconded by Mike Brothers, owner of Walk ’n Comfort Shoes, who said that if a locally owned store opens, people will keep it in business.

“Port Orchard people support local businesses,” he said. “Right now, there are no places to get men’s clothes around here. You have Fred Meyer and Wal-Mart. If you don’t like those options, you just go to Silverdale.

“But if there was a classy men’s store right here, people would come here to shop,” he said.

Currently, the mall lacks an anchor store that could serves as a customer magnet (Silverdale’s Kitsap Mall, by comparison, has JC Penney’s, Sears, Macy’s and Kohls as anchors).

Instead, the mall area is bracketed by Goodwill and a vendor store, two large outlets with a secondhand feel.

While this sets the mall apart from other shopping areas, this is not a bad thing, according to mall manager Grace Li.

“We offer items at affordable, reasonable prices,” said Li, who is part owner of the corporation that owns the mall. “Not everyone can afford to shop at Nordstrom. We offer variety and the ability to find values and services.”

The mall, built in the 1970s, is clearly showing its age. It is small and simple, confined to two stories with an escalator in the middle (which, incidentally, was the first in the county).

It is nothing like the modern shopping meccas that have sprung up throughout the country; huge labyrinthine structures with one fancy boutique after

If the failure to land an anchor store has slowed business, the mall is stitching together its own identity.

With a fabric store, bead store and cake-decorating outlet, along with the availability of second-hand merchandise, it has become a craft center. “This is a good place to go if you want to be creative,” said Port Orchard resident Carol Eddy.

Brothers and chocolatier Matt Carter, whose store is one of the mall’s recent successes, are looking to develop a more upscale feel.

Carter sells expensive chocolates, but has proven that local customers will pay premium prices for quality.

He would like to see this concept taken one step further, with a shop that sells premium cheeses.

“If you want really good cheese around here, you need to go all the way to Poulsbo, and Central Market,” he said.

The thinking is that as the economy stagnates, chocolate and cheese are luxuries that people can afford.

In light of Carter’s success, another shop will open this spring. Celebration Wines will feature a tasting room and a local vintage from Port Orchard residents Phil and Betty Harrison.

The twist that will draw people in is that customers will be able to customize the label with their own pictures and text.

Li points out that things are tough all over, and malls throughout the region are feeling the pinch.

The fact that Port Orchard doesn’t depend on a single employer means that it is less subject to one company’s misfortunes.

Li, who took over the mall in 2005, has changed its direction by turning it into a “mixed-use” facility (part of this change was a new name, from South Kitsap Mall to Towne Square Port Orchard).

So along with the retail, there are several small offices that are used for service businesses and contractors. And the rent for these spaces are less expensive than anywhere else in the county, according to mall manager Pauline Skelton.

Brothers, on the other hand, feels the offices dilute the ability for retail stores to attract foot traffic and do not pull in their fair share of customers.

“We need good-quality tenants,” Brothers said. “I don’t think the mall management has done their best to accomplish this. They also need to spruce up the mall, a little bit of paint here and there doesn’t do the trick.”

Brothers, who has been in the mall since 1997, said that it was “more alive” in other years. He has many regular customers “who come here before they go anywhere else,” but has failed to recruit a new generation of patrons.

As merchants wait out the poor economic conditions, they have developed a combination of retail, services and office space that will keep the enterprise going.

“We need to let people know we are here,” Skelton said. “In the meantime, we are making enough to get by.”