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Observations & Conversations
The destruction in the south coupled with the huge
increases in gas prices will make middle-America think a little harder before
they buy beyond the necessities, so expect some retailers to feel the pinch this
Christmas
It's been a rough few weeks just watching the trauma of
Hurricane Katrina on TV and I can't imagine what it's like to deal with that
reality firsthand. We took the easy way out and just sent cash, Wal*Mart gift
cards and animal crates, but I know of a few people in our industry that
actually got on a plane to volunteer, so hats off to them and to Wal*Mart for
stepping up to the plate. The rebuilding and rebounding will be a grueling task.
It took New York City at least a year to get back on its feet after the 9-11
attack and it affected far fewer people, so getting Louisiana, Mississippi and
Alabama with a million people displaced will probably take years. Hurricane
Katrina made most Americans realize that we live in a have and have not society.
Middle-America was shocked to see the vast numbers of folks that truly live
paycheck to paycheck and how severely our governmental safety nets have gaping
holes, but private citizens and their employers raised hundreds of millions of
dollars in less than two weeks for relief aid. Yes, it will affect retail sales.
Some segments of retail will show banner sales this year merely because there
will be so much rebuilding of the structures that were destroyed and because
we'll see a huge migration of people out of the Delta into surrounding states
requiring them to furnish their wardrobe and their new residences. But overall,
I don't think people nationwide will be buying the luxury items of years past
because the psychological factor of seeing so much poverty and need throughout
the southern states in the wake of the storm (of course there are pockets of
poverty in every town across the country, but we haven't had to see it on a
daily basis until the deluge of media coverage on the storm). We tend to be a
greedy lot until a crisis hits. The destruction in the south coupled with the
huge increases in gas prices will make middle-America think a little harder
before they buy beyond the necessities, so expect some retailers to feel the
pinch this Christmas.
In the past few weeks I've also been hearing rattling about chains closing
stores, here's just a few: Office Depot is closing 27 stores, OshKosh B'Gosh is
closing 15 stores, Rent-A-Center is closing 162 locations, Zales is closing 30
or so stores, Winn-Dixie is closing 200 stores, along with Mervyn's closing 62
locations, Lenox is closing 31 stores, Rhodes Furniture is disposing of 16
stores, rumors are flying about Albertson's closing stores, Sears is still
closing some Kmarts, so let's hope this isn't the status quo for the rest of the
year. On the flip side, several retailers are testing the waters with new
concepts. Pacific Sunwear is rolling out a concept called One Thousand Steps
next year. The new mall-based concept will target an 18 to 24 year old customer
and feature an assortment of casual, fashion-forward, branded footwear, and
related accessories. Plans call for eight to ten stores averaging around 2,500
sq.ft. to open during the first half of 2006. Rumor has it that Microsoft is
contemplating opening a new concept in New York called the Xbox 360 Lounge,
which would offer different living room-like settings with high definition TVs
and home theater systems. The company will debut the concept next month in
Japan. Billy Martin's USA, Inc. also plans to roll out a new concept called
Rock-A-Billy Martin's, which will carry "a fusion of rock & country elements"
varying from its mainstay of western wear. Areas most likely to see Billy
Martin's new concept first are Nashville, Newport Beach, Harlem and Austin.
American Eagle Outfitters, Inc. plans to launch a new concept next year with
five to six mall-based stores focusing on lifestyle clothing and accessories.
Williams-Sonoma recently opened its new concept, West Elm, in Houston. West Elm,
which offers furnishings such as daybeds, sofas, storage and wall decor, opened
its seventh location with 17,000 sq.ft. and the stores also carry an assortment
of designs within tabletop, textile and decorative accessory collections, while
its furniture is sold as ready-to-assemble units that are available for
immediate pick-up at the store. A small chain that's growing is URBAN Traveler.
The stores specialize in travel gear and accessories. Its most recent opening
was at Woodbury Lakes in Woodbury, MN and the design features include a wind
tunnel at the store entrance that creates an effect with air simulating the
start-up of airplane propellers and airplane propeller fans on the ceiling.
Another interesting concept, Flip Flop Shops is opening stores. The four-unit
chain carries flip flops and sandals with price points from $15 for conventional
flip flops up to $500 for a pair of non-leather Italian handmade sandals for
women, men and children along with a small line of beach totes. The company
plans to open 20 stores of about 600 sq.ft. with continued growth in its
existing area of operations in Arizona and an entrance into southern California
and Florida within the next few years. This month's retailer feature is also
interesting. We were doing some research on Transcan, a developer in California,
and one of our editors gave me his rough copy and noted a pizza concept as using
50,000 sq.ft. in a new construction project, so of course I kicked it back to
him to recheck his notes since the store size looked out of whack, only to find
out his notes were accurate. So needless to say, I wanted to know more about the
concept. It's called John's Incredible Pizza and I think you'll start to see
more of them of the West Coast, to get to full scoop check out the article in
this week's issue.
While we're on press with this issue, we'll be at the ICSC Pennsylvania/New
Jersey/Delaware Dealmaking in Philadelphia, one of my favorites since it's only
half an hour from my home and doesn't require waiting for hours in an airport!
Then it's on to ICSC's Western States Dealmaking in Palm Springs, a show that
requires a full day in airports each way, but the parties are usually great and
you can't beat the backdrop of mountains for scenery. Next month, we'll also be
at the ICSC shows in Atlanta for the Southeastern States Dealmaking and in
Chicago for the Midwestern States Dealmaking, so if you're at one of these shows
too, stop by our booth and say hello. We're also gearing up for the Texas
Dealmaking during November in San Antonio and of course the Eastern States
Dealmaking in New York City during December is already on our minds. Make sure
you send us press releases and updates on your space for lease, new
developments, exclusives, lease signings, recent sales, acquisition needs etc.
so you can get press coverage since The Dealmakers’ show issues are distributed
on the convention floor and delivered to the attendees’ hotel rooms. You can
send it to me at ann@dealmakers.net or by fax to 609-587-3511.
Until next month,
Ann O'Neal, Publisher
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