Smaller Retailers Destined For Former ‘Big Box’ Stores

March 27, 2017 in Latest News

These are dark days for the traditional “big box” retailer.

Sears cast doubt this week that it could stay open, and that followed recent announcements by other struggling retail stalwarts Macy’s, J.C. Penney Co. and Kmart that they would be closing stores across the country in response to the fallout from a consumer shift to online shopping.

Electronics and appliances retailer hhgregg said this month it would be closing all 11 stores in South Florida; the announcement came less than a year after Sports Authority went out of business.

The retailers are vacating spaces of 25,000 to more than 100,000 square feet, forcing shopping center owners to find new tenants or new uses for the buildings.

More yawning spaces could be opening up around South Florida if Sears and Kmart sink amid heavy financial losses. According to their websites, Sears operates 15 locations (14 department stores and an outlet store) in Palm Beach, Broward and Miami-Dade counties. Kmart has seven stores in all three counties.

“This certainly is at the top of [landlords’] minds right now,” said Robert Granda, director of retail investment sales for the Franklin Street brokerage across South Florida. “The challenge in this changing environment is that there are not that many retailers looking to take so much space. There are a lot more tenants looking for 10,000 square feet or less than there are looking for 30,000 square feet or more.”

Alan Esquenazi, a partner at commercial real estate company CREC, agreed that a “resizing” of retail is happening across the nation.

“Bricks-and-mortar retail is unequivocally not dead,” he said. “But you have to be really sharp, really competitive. You have to offer the customer an experience, like Apple does. The retailers that are closing offered nothing different, and they were destined to fail.”

Granda, Esquenazi and other retail observers say one of the best options for landlords is to subdivide the big box buildings into smaller spaces for two or three new tenants.

That’s the plan at former Sports Authority stores in Pompano Beach and Boynton Beach, though the new tenants have not yet been announced, said Katy Welsh, senior vice president of retail services at Colliers International.

The Related Cos. of New York, which owns CityPlace in West Palm Beach, has not announced plans for the two-story, 108,000-square-foot Macy’s that’s due to close this spring. But analysts say filling that space with multiple tenants is a strong possibility.

“My guess is that CityPlace will subdivide that space downstairs, and there likely will be a food and entertainment use upstairs,” said Alan Bush, CEO of Northlake Partners, a retail strategy company based in West Palm Beach. “That combination provides the best return on investment for the landlord.”

Welsh said retailers most likely interested in taking at least part of the space in former big box stores include discount clothing chains Ross, TJ Maxx and Marshall’s as well as Home Goods and Orchard Supply Hardware.

Another possibility is the grocery store chain group, including Trader Joe’s and Lucky’s Market, Welsh said. Lidl, a German grocer, is headed to Florida after expanding into the Carolinas, Virginia and Texas, she said.

Movie theaters are another possibility, but they wouldn’t be an ideal fit in smaller, older centers, analysts say.

Landlords are eager to find new tenants at a higher cost per square foot to replace the retailer-friendly leases signed by Kmart and other chains many years ago, according to Welsh.

As a consumer, she said it’s hard for her to accept that Sears and other former retailing powerhouses are struggling to survive. But as a retail observer, she’s intrigued by what’s ahead.

“From a landlord’s perspective,” she said, “we’ve been waiting for the other shoe to drop for a long time.”

 

Source:  SunSentinel

hhgregg Closing 88 Stores Nationwide

March 6, 2017 in Uncategorized

Indianapolis-based hhgregg is closing 88 stores as part of its “turnaround” efforts, the company announced last Thursday morning.

“We are strategically exiting markets and stores that are not financially profitable for us,” Robert J. Riesbeck, hhgregg’s President and CEO, said in a statement. “This is a proactive decision to streamline our store footprint in the markets where we have been, and will continue to be, important to our customers, vendor partners and communities.”

The electronics and home appliances chain will be left with 132 stores.

hhgregg’s store closings are expected to eliminate 1,500 jobs.

Three distribution and delivery centers, including one in Miami, will also close.

“I understand this is not an easy process to go through; our history has shown that our team members will meet this challenge head-on and continue to support our customers and each other through the closing process,” Riesbeck said.

The full list of store closings:

Newark, Heath, OH
Fairlawn, Akron, OH
Trussville, AL
Stonecrest, Lithonia, GA
Gwinnett, Duluth, GA
Southlake, Morrow, GA
Pembroke Pines, FL
Hialeah, FL
Sawgrass, Plantation, FL
Ft. Lauderdale, FL
Kendall, Miami, FL
Wellington, FL
West Palm Beach, FL
Boca Raton, FL
Mt. Juliet, TN
Mansfield, OH
Mooresville, NC
Durham, NC
Cary, NC
Buckhead, Atlanta, GA
Asheville, NC
Gainesville, FL
Homestead, FL
Florida Mall, Orlando, FL
Pensacola, FL
Mobile, AL
Aventura, FL
Pinecrest, FL
Short Pump, Henrico, VA
Chesterfield, Midlothian, VA
Newport News, VA
Virginia Beach, VA
Chesapeake, VA
Fredericksburg, VA
Colonial Heights, VA
Roanoke, VA
Lower Paxon, Harrisburg, PA
York, PA
Mechanicsburg, PA
Lancaster, PA
Hagerstown, MD
Wilkes-Barre, PA
Dickson City, PA
Winchester, VA
Wyomissing, PA
Downingtown, PA
King of Prussia, Berwyn, PA
Montgomeryville, North Wales, PA
Whitman Square, Philadelphia, PA
Langhorne, PA
Whitehall, PA
Moorestown, NJ
Deptford, Woodbury, NJ
Mays Landing, NJ
Newark, DE
Dover, DE
Wilmington, DE
Springfield, VA
Sterling, VA
Fairfax, VA
Bailey’s Crossroads, Falls Church, VA
Woodbridge, VA
Manassas, VA
Largo, MD
Waldorf, MD
Rockville, MD
Frederick, MD
Catonsville, MD
Hanover, MD
Bel Air, MD
Towson, MD
Annapolis, MD
Glen Burnie, MD
Chesterfield, MO
North Hills, Pittsburgh, PA
Erie, PA
Parkersburg, Vienna, WV
Schaumburg, IL
Bloomingdale, IL
Arlington Heights, IL
Niles, IL
Springfield, IL
Champaign, IL
Kenner Westgate, Metairie, LA
Westbank, Harvey, LA
Mall of Louisiana, Baton Rouge, LA
Tri-County, Springdale, OH
Treasure Coast Mall, Jensen Beach, FL

 

Source:  WPTV

Hhgregg Faces Growing Pains In A Crowded Market

January 21, 2014 in Latest News

hhgreggstorefrontBased on recent sales results, electronics retailer hhgregg has begun experiencing the same woes that sunk Circuit City and have been plaguing Best Buy—the chain has trouble competing with the low prices and convenience offered by online rivals. Yet analysts say there’s no reason to worry about hhgregg’s long-term survival, provided it takes some steps to differentiate itself.

According to preliminary third quarter fiscal 2014 results hhgregg reported an 11.2 percent decrease in same-store sales, with same-store sales for consumer electronics in particular falling 19.7 percent. Net sales during the quarter, ended Dec. 31, fell 11.6 percent, to $707.1 million.

This reversal of fortune seems all the more striking considering that just a few years ago hhgregg was a darling of the retail real estate industry. The rapidly expanding regional chain helped many landlords fill boxes left over when Circuit City liquidated, opening dozens of new locations just as the real estate industry was recovering from the recession.

Like many retailers before it, however, it may have over-expanded, notes Neil Stern, senior partner with McMillanDoolittle LLP, a Chicago-based consulting firm. To wit, hhgregg’s main advantage over its bricks-and-mortar rivals was its wide selection of home appliances, which people still prefer to buy from physical stores, Stern notes. The trouble is that with the housing market a far way off from the boom years, there hasn’t been as much demand for refrigerators or washing machines.

“The challenge [for hhgregg] is that it’s still almost like an old-fashioned store,” says Stern. “They are not very progressive on bringing in new technology and they have certainly been hurt on major appliance sales. When home sales are low that’s going to affect the appliance sales.”

Doug Stephens, president of consulting firm Retail Prophet, also attributes hhgregg’s recent troubles to stagnant middle class incomes and slow housing recovery. “There is an awful lot of stuff that they sell that isn’t essential, that is a luxury product,” he says.

“If I covered the hhgregg logo with my hand, I could be looking at any electronics retailer,” says Stephens. “If they are going to change their store model and the look of their stores, it may not be right the first time, but they are going to be different and that’s the important thing. They are in a position right now very much like Circuit City was—they can do nothing and wither away, or they have to do something completely different, at least [as a tryout] in one store.”

As of September, hhgregg operated 228 stores, primarily in Southeastern and Northeastern states. Between March 2012 and March 2013, the company opened 20 new stores. However, in this year, the retailer will only open one new store, according to comments made by Dennis May during a conference call with analysts on Oct. 31. The chain’s stores average 32,000 sq. ft.

 

Source:  NREI