Observations & Conversations
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New development of malls is virtually impossible today, and mall-oriented department stores are looking to strip-center locations as the only viable alternative for growth. I recently visited a Stern’s during its grand opening in a strip center that’s anchored by a supermarket and has frontage on a major thoroughfare used by 100,000+ cars daily. |
The real estate is an “A” site. However, Stern’s took over a space, formerly housing Jamesway, that sat vacant for about five years and has no frontage to the road. I took a look around at the customers roaming the store and I’m sure most of them were eligible for social security — a customer base that will literally die off before the lease expires. Why was the median age so high? Easy: The store looked like the design instituted in 1960 was just resurrected for its 2000 grand opening and the fixtures were dusted off after being warehoused for 10 years.
Young families and teenagers buy more consumables than any other group of shopper and they’ll be around longer to build a loyal customer base. So doesn’t logic tell you, Mr. Landlord and Ms. Retailer, that spending a few bucks on a new store design and upgrading fixtures makes sense?
The store appeared to be relatively well stocked, but disappointment hit when when I approached an unmanned cosmetic counter and, after wrangling a store manager to find a human to unlock the glass case, I was told, “We don’t have what you’re looking for, since we haven’t gotten in the full line of cosmetics yet.” Stupid! They had six months, minimum, to order merchandise and probably two weeks to stock the floor, so any excuse is unacceptable. I ordered online from Macys.com instead, with absolutely no grief. Not only did Stern’s miss out on a high-margin sale, but I won’t be in a rush to revisit the store.
The feature story in this month’s issue of ESP is about e-retailers coming to a downtown, strip, power or specialty center near you. Developers have been belly-aching for several years now that there’s no “new blood” in the retail arena. Well, landlords wished for it and they got it, in the form of dot-coms emerging on the brick and mortar scene. Funny, how the entity that a few years ago was thought to be the great threat to traditional retailing — the Internet — will soon be embraced by most developers as the saving grace that’s (one) keeping their space filled and (two) attracting tenants that are unique.
The only problem is that most of these new storefront retailers don’t know how to operate a “real” store and some are sure to skin their knees. Online retailing hides a lot of flaws, such as lack of depth in merchandise, and the retailers don’t have to find people to meet and great customers on the floor in a dire labor shortage. The advantage e-retailers have over traditional retailers is that most of them are truly niche enterprises. E-retailers discussed in this issue include one that caters to the allergy-prone population and one targeting the African-American community — extremely well-defined marketing.
Also in this issue, we’ve got more than 50 retailers looking for sites in malls, downtowns and specialty centers. Better take a good look, since every retail analyst worth her/his salt expects to see an onslaught of store closings after the holidays. Everyone — from small specialty store chains such as Paul Harris to larger users like Office Depot — is cleaning house and getting rid of under-performing units. It’s going to become a retailers’ market again. Most landlords have been spoiled in the past five years, with retailers almost groveling for new locations, since the retail market has been so tight and landlords’ pockets were full of dough because they took advantage of the refinancing opportunities abounding in the late 1990’s. Alas, to think landlords might have to start canvassing and marketing hard for retailers again ... Don’t worry, though, because we’ll continue to feed you good leads on retailers looking for sites. Just keep reading!
As the year wraps up, I just want to let our readers and advertisers know that we appreciate your business and if we can do something better or help you out with a question, let us know. Happy holidays to all, and until next year . . .