Retail News Digest for Sunday, January 16, 2011

This is a relatively new feature to our site.  While we’ve periodically reported retail news throughout the years, we’d like to establish a regular digest of major retail events on a bi-weekly or as-warranted basis.  We’ll see how it goes.

As with our mall articles, interactivity is key.  While we’d like to try to cover all major news stories, this is not possible for practical purposes.  There are some stories we will inherently miss – we live in a big world full of a lot of information.  As such, you can help us gather the news by posting relevant recent happenings to the comments page for these news features.  And, as always, you can post specific news items to their individual mall posts, if we have one. So, feel free to add stories you’d like to discuss and leave comments on the ones we’ve listed.

Comings and goings:

Other retail news:

40 Responses to “Retail News Digest for Sunday, January 16, 2011”

  1. Post Oak Mall?!? That’s my mall!

    Well, at least I can eat a pretzel at the Auntie Anne’s without being put off from the fumes from the A&F that sits right near it.

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  2. We have a list of Kmart and some Sears store closings on our site :)

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  3. As I’ve mentioned here on Labelscar previously, the entire Borders chain in the United Kingdom went out of business a few years ago now, closing all of its outlets including the 5 storey flagship store on London’s Oxford St. I don’t expect their American cousins will be around much longer, which is a terrible shame. I always look at purchasing books in the same way as I look at purchasing clothing – I want to be able to browse before I buy, and online doesn’t really offer the same experience.

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  4. Sears is also closing it’s store at Eastwood Shopping Center in Frankfort, KY. Eastwood is a 60s era strip center. Sears hasn’t really been heavily updated since it opened there in 1966.

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  5. The Anchor Blue near me, in Laguna Hills Mall, is (was?) usually quite busy. Surprising, considering how dead that place is.

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    Ed Fiesta Red Field Reply:

    @Vector, same here dude, here in Temecula the Anchor Blue was busy, it’s a same they are going under, by the way, the MAXRave (formerly Rave Girl) store in out mall (the Promenade at Temecula) also closed, checked their site and they too went out of business, I was wondering if they were owned by the same folks? Who knows, sadly another one bit the dust!

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  6. The Kmart in Sheboygan is one of the ‘bunch’ of the chain closing. it will be torn down and replaced by a new Pick ‘n Save supermarket. Oddly, the Plymouth location (which is a late ’80s/early ’90s-era store), will remain open.

    I don’t think it’ll be much more time before Borders bites the dust too. The internet is pretty much putting the KO punch to the bookstore segment, and e-readers is starting to dent the print industry as a whole.

    Charlestowne Mall, when I went there in 2005, was already half empty. The mall looks too ‘early-90s upscale’ for an area that is anything but that. I wonder if it ever did get to 100% occupancy since its 1990 opening.

    I’d keep this feature going. It’s a nice way to round-up the big retail new bytes from around the Internet. I find myself going to various retail news sites as it is, but to have them collected together for those who don’t have that sort of time, and give us a spot to comment is a nice thing.

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  7. Other Pittsburgh area retail news:

    High-end Ross Park Mall is getting three more retailers including the Limited, Tumi and Francesca’s Collections.

    Levin Furniture is opening a new showroom in the strip center behind Westmoreland Mall in Greensburg, PA.

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  8. Hhgregg entering Pittsburgh market by spring
    Tuesday, January 18, 2011
    By Teresa F. Lindeman, Pittsburgh Post-Gazette
    Todd Taulman/hhgreggRetailer hhgregg will enter the Pittsburgh appliance and electronics market with stores in Cranberry, West Mifflin, Wilkins and North Fayette, according to township records.Some dark spots on the area’s retail landscape will see the lights flicker on again soon, as an Indianapolis-based electronics and appliances chain begins its move into the region.

    The retailer known as hhgregg expects to enter the Pittsburgh market by spring, Dennis May, president and CEO, told analysts at an investment conference in California last week. The chain plans to be in Miami by summer and Chicago in the fall.

    “Hhgregg is marching toward becoming a national retailer,” he said.

    Work has begun on putting stores in Cranberry, West Mifflin, Wilkins and North Fayette, according to township records. In addition, hhgregg has begun advertising for positions in the Pittsburgh market.

    A company spokeswoman declined to say exactly when the first stores here would open.

    For hhgregg, the recession has brought opportunity. The chain, founded as an appliance store in 1955 by H.H. and Fansy Gregg, had about 80 stores in 2007. Now it has almost 175 stores in 15 states. Store officials think the concept can support more than 600 stores in the United States, and they expect to open 35 to 45 in the next fiscal year.

    The economic slowdown and numerous store closings in recent years have made expansion easier, said Mr. May. “It’s still a buyers market in the real estate area,” he told analysts. “We continue to take advantage of that.”

    In the Pittsburgh region, the company is taking over empty retail space. A former Linens ‘n Things in Cranberry Commons is being overhauled. Work is also planned on a former CompUSA store in Wilkins and a former Circuit City in North Fayette.

    A West Mifflin official said hhgregg had filed paperwork to put store on Mountain View Drive next to a Marshalls store. The site once held a Circuit City store.

    The typical hhgregg store is about 30,000 square feet, according to the company’s website.

    Hhgregg likes to enter markets with a mass of locations, a move that makes it accessible to most of the region, spreads marketing costs across several stores and raises awareness of the retailer’s presence. “We go into a market to take share,” said Mr. May.

    In making his case to investors, he said hhgregg differentiates itself from other electronics and appliance chains with a commissioned sales force that receives regular training on the latest products. “An educated consumer buys a better product,” he said, adding that means better profit margins. Services such as same-day delivery also set it apart.

    Hhgregg concentrates in particular on televisions and appliances, which account for about 80 percent of its sales. That can be an advantage in giving customers choices — the company claims to carry more than 100 models of flat panel televisions and 350 models of appliances — and keeping margins up.

    But it also leaves the chain vulnerable to some market shifts, said analyst David Strasser at Janney Montgomery Scott in a report last week downgrading his rating on the stock to “neutral” from a “buy.”

    He predicted TV sales would have a tough year in 2011, in part because of the slow transition to 3-D technology. “Additionally, we anticipate softness in appliances due to a fragile big ticket environment, a weak housing market and difficult compares.” Last year, appliance sales nationally got a bump from government incentives.

    Mr. Strasser noted that hardware chains Home Depot and Lowe’s had stepped up promotions to gain market share in appliances, and that consumer electronics chain Best Buy was expanding its offering of upscale appliances with a store-within-a-store concept.

    Pittsburgh shoppers could get an interesting view of the competition among the big retailers. In November, Best Buy made this one of its launch markets for a redesign meant to create stations where customers can learn about how devices interact wirelessly.

    Last fall, hhgregg began adding Verizon Wireless kiosks in its stores, adding another dimension to draw shoppers.

    Mr. May, at the conference last week, was clearly aware that there are plenty of options for the customers he wants. He said hhgregg had gone up against the other major chains as it had entered

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  9. Urban malls on the rebound
    Local in-town shopping centers are flourishing
    By Roger Vincent, Los Angeles Times

    January 23, 2011

    At the Westfield Culver City mall, crowds of lunchtime diners fill scores of booths and tables while others line up to order meals at one of the many counters.

    You can still find the mall culinary standard Hot Dog on a Stick tucked discreetly off to one side. But more urbane fare such as sushi, Vietnamese noodles and Korean chicken is the norm in the area once known as the food court.

    Now, what Westfield calls a dining terrace exemplifies the recent transformation of the mall from a place many considered downscale and dangerous to a choice destination for more than 10 million visitors last year — a nearly 90% increase from 2009.

    The resurgence of Westfield Culver City also illustrates how many malls in urban settings have managed to thrive in spite of the recession, said real estate broker Richard Rizika, who specializes in retail properties. Malls are faring much better in Los Angeles County than in the nation on average, he said.

    The amount of empty space in L.A. County shopping centers and large free-standing stores fell as much as 25% last year compared with 2009, he said, and rents rose almost 10%. Nationally, vacancy fell only 1% and rents went down 5%.

    Many chain stores have closed outlets in remote suburban malls to focus instead on busy urban centers. Traditional malls that have had big-time makeovers have proved particularly attractive to store operators, Rizika said, pointing to Westfield Culver City and Santa Monica Place’s “major repositionings” that left them nearly 100% leased.

    “Malls in outlying areas are having more trouble absorbing space,” said Rizika, a managing director at commercial real estate brokerage CB Richard Ellis Group.

    The Culver City mall faced serious challenges, including an association with violence. When it was the Fox Hills Mall there were a few shootings on the premises, including a gang-related gun battle on the rooftop parking lot in 2000 that left two dead. The mall had a run-down, fortress-like air.

    Westfield, which bought the mall in 1998, lightened its tone with glass facades, more skylights, bright paint and other moves intended to enhance a sense of openness. It was part of a larger plan to get former and potential shoppers to reconsider their impressions of the mall.

    “Our challenge was that people had forgotten about this center, said Larry Green, head of West Coast development for Westfield. “And we had to convince the retail community that there was real tremendous opportunity here.”

    To break with the past, Westfield changed the character of the shopping center with a $180-million overhaul completed in 2009 that expanded the mall’s floor space by about one-third to 1 million square feet and added street-level retailing. Known previously as a collection of down-market stores, Westfield added some upscale brands such as Coach and trendy fashion retailers including XXI Forever and Hollister. Amenities include valet parking with a waterless, “eco-friendly” carwash.

    The opportunity to definitively change the mall’s nature came only after the then-owner of Macy’s acquired the Robinsons-May department store chain in 2005 and announced plans to unload duplicative locations, including at Culver City, which had one of each. That opened up room to reconfigure the mall.

    “The ability to get back one of those department stores allowed us to do what we had been trying to do to revitalize and change” the mall, said Peter Lowy, who heads U.S. operations for Australia-based Westfield Group.

    The mall is now anchored by Macy’s, JCPenney, Target and Best Buy. The mix of traditional department stores with a popular discounter and big-box electronics specialist has been a financial boon, Lowy said.

    Robinsons-May and Macy’s were doing “just OK,” grossing in the mid-$20-million range annually, Lowy said. “Now Target and Best Buy are doing multiples of that.”

    The mall also has a Gold’s Gym and full-sized restaurants such as BJ’s Restaurant & Brewhouse. Target stocks an extensive grocery section. It’s all part of a dramatic shift in how malls operate worldwide, Lowy said, as the industry moves beyond operating various collections of mainstream department stores and chain retailers.

    Westfield also spent $1.2 million on art at the Culver City mall and set about trying to make it seem more like a town square with its own social scene. There is a farmers market in the parking lot on Saturdays and events such as Halloween costume contests for kids.

    “This is a revolution in the business,” Lowy said. “We need to give customers an experience and product that keeps bringing them back.”

    Part of the strategy behind the Culver City mall’s redesign was to make it easier to get around and stop trying to force people to pass in front of as many stores as possible. Ramps and bridges were added to better connect the walkways ringing the three-floor mall and large directional signs make it easier to navigate, Green said.

    “We created the chance to pop in and out to a range of neighborhood and regional services,” he said. “People have a lot of different choices, and you have to make it very convenient.”

    Times are still tough for most retailers, and some long-suffering businesses such as jewelry stores are finally giving up the ghost, but big store closures caused by the recession are mostly over, said Peter Lynch of DJM Realty in Los Angeles.

    “Retailers have pulled every expense that they possibly can out of their companies and done everything they can to get the best possible costs for their products,” said Lynch, who helps retailers manage their real estate. “In this very slow growth environment, people are managing their inventories very closely.”

    Financially healthy retailers are also taking advantage of what appears to be the bottom of the real estate market to move to more lucrative locations, broker Rizika said, which are often in urban centers. Among the retailers moving up are discounters such as Target Corp., which announced in November that it would move into former department store space in the 7+Fig mall in downtown Los Angeles.

    More discounters, including 99 Cents Only Stores, Ross Stores Inc. and Dollar Tree Inc., will be moving into buildings last occupied by food stores such as Albertsons, Ralphs and Vons as consolidation continues in the supermarket industry, he said.

    My thaughts…

    I guess you would need to look at this issue on a property by property basis. Beverly Center, Westside Pavillion & Century City are urban malls that have had verrying degrees of success & were revitalized in different ways at different times. Also the malls in the article are in the same general area as the three I just mentioned, ratchiting up the level of compitition among all of the properrties for the same limited number of customers.

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  10. Cincinnati Mall (Forest Fair Mall) may be in for a redevelopment!

    Latest plan for Cincinnati Mall: ice rink, water park
    Business Courier – by Tom Demeropolis , Courier staff reporter
    Date: Tuesday, January 18, 2011, 11:05am EST – Last Modified: Tuesday, January 18, 2011, 11:06am EST
    Related: Commercial Real Estate, Retailing & Restaurants
    Enlarge Image

    Further Reading
    The giant Cincinnati Mall, struggling to lease space
    Owner ready to fill Cincinnati Mall
    Related News

    The latest redevelopment plan for Cincinnati Mall includes an ice arena that could be home to youth and adult hockey leagues, an indoor water park, a Candlewood Suites extended stay hotel.

    But these projects are dependent upon the mall’s owner bringing in joint ventures, a mall official said. If the mall is able to fully implement its plan, it could bring an additional 2,000 jobs to the area.

    “We’re still in the very early stages,” said Karla Ellsworth, head of development at Cincinnati Mall.
    There are no estimates on the total cost of the redevelopment because it is early in the process and feasibility studies are still being worked through, she said.

    The owner, Cincinnati Holding Co. LLC, is a subsidiary of World Properties Inc. of Floral Park, N.Y. The mall was purchased for a little more than $4.7 million in March, according to Hamilton County property records, or roughly $3 per square foot.
    The Cincinnati Mall has a history of turmoil, dating back to the 1989 bankruptcy of its developer, L.J. Hooker, within a year of the mall’s opening. Its sheer size has been the retail center’s biggest problem, but it looked like it had found its niche after 2002, when the Mills Corp. acquired and renovated the mall — landing new tenants with a leasing plan that emphasized value sellers and outlet stores.

    Candlewood Suites is looking at building a hotel in the space that was most recently occupied by Steve and Barry’s. The hotel would be visible from Interstate 275 and could have 60 rooms, though Ellsworth said the exact number of rooms has not been determined yet.

    The former Bigg’s store is one potential spot for the ice arena. At about 250,000 square feet, Ellsworth said it could be a school’s home ice for hockey teams, as well as host other adult and youth hockey leagues.
    “This is not just a slab of ice, we’re thinking about an ice arena,” she said.
    The mall is in negotiations to bring in an indoor water park as well, which could also be located in the former Bigg’s space.

    While the large portions of redevelopment depend on finding joint ventures and financing, Ellsworth said restaurant and retail space is available in the mall. A start date has not been set, but Ellsworth expects the full redevelopment plan would take about three years to complete.

    Prior to working at Cincinnati Mall, Ellsworth worked for Boston-based Cathartes Private Investments, a private real estate investment and development company. After moving back to Cincinnati to be closer to family, she met with the mall’s owners about working on the mall’s redevelopment.
    “It’s a challenge I’m excited about taking,” Ellsworth said.

    Cross your fingers, as many dead malls have planned something and nothing came of it!

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  11. Economic downturn disrupted migration patterns, census data show
    The long-standing population shift to Sunbelt states slowed while states with more jobs and affordable homes saw gains. The question is whether those changes will stick or old trends will return.
    By Don Lee, Los Angeles Times

    December 29, 2010

    Reporting from Washington

    One of the hallmarks of the American economy has been the mobility of its people — the speed at which they pulled up stakes to seek better opportunities elsewhere.

    But the deep recession has ambushed long-running population trends, sharply slowing migration to much of the Sunbelt while giving a boost to states with more jobs and affordable housing.

    Now as the recovery seems to be gaining steam, a central question is whether the population distortions caused by the massive downturn from 2007 to 2009 represent a long-term change or whether previous trends eventually will return as the economy strengthens.

    The first set of data from the 2010 census, released this month, underscored the big role that economic forces can play in driving population shifts. The movement of people — and political power — from the Northeast and Midwest to the South and West continued, with Texas gaining the most. Yet there were significant changes within that pattern, including a dramatic slowdown in migration to California, Florida and other states that had long been among the nation’s fastest-growing.

    Bob Palmieri, 58, of Long Island, doesn’t plan to follow his parents, who in the 1970s were among the droves of seniors from New York and New Jersey who retired to Florida.

    “I have a nice home here,” he said. “I look at Florida as a place for older folks.”

    Those same forces will probably shape the current decade, at least the first part of it.

    “Over time, the [population] numbers will reflect the rate of job growth,” said Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.

    Many Americans want to move but can’t because they can’t sell their homes. Others owe more than their homes are worth. And many young people, who account for the bulk of the moves, are stuck living at home, delaying marriage and having children as they contend with the sluggish economy.

    Overall, the nation’s population increased 9.7% from 2000 to 2010, the smallest 10-year growth rate since the decade of the Great Depression. As in the 1930s, the latest slowdown was because of fewer immigrant arrivals and a shrinking of the nation’s birthrate, in part because of the economic downturn.

    Without the recession, Florida might have added 500,000 residents over the last decade, said University of Florida demographer Stanley Smith. The state’s 2000-10 growth rate was 17.6%, less than half the pace of the 1970s.

    Smith said Florida’s sunny weather and absence of a state income tax, among other factors, will help restore stronger population growth as the economy improves. But that may be a long time coming for Florida and other states such as California that leaned heavily on housing and other hard-hit industries. Home prices across the country continued to slide in October, dropping 1% overall from a month earlier, according to figures released Tuesday by Standard & Poor’s/Case-Shiller.

    Florida’s unemployment rate, 12% last month, remains one of the highest in the nation. With weak job markets — and in Florida’s case an aging population that has contributed to more deaths and a lower natural rate of increase — analysts said such states may be looking at a persistently weaker population growth over the next decade than they have been accustomed to. That in turn could mean slower economic growth and more budget pressures on state and local governments.

    Nevada and to a lesser extent Arizona also are in this camp. Their big housing busts and high unemployment curbed what had been a surging tide of jobs and residents moving in from other states.

    Many of the new residents had come from California. But the recession and real estate slump limited those inflows from the Golden State — even as the new census suggests there was a much bigger exodus of Californians in the first several years of the last decade than previously thought.

    The 2010 census put California’s population at more than 37 million, a 10% increase from 2000, but that was about 1.5 million fewer than estimates by the state Department of Finance.

    One possible reason for this discrepancy: The surge in housing prices before the crash made it harder for nonresidents to relocate to California, while many more people in the state may have left after the dot-com bust early in the last decade, Levy said.

    If California’s population growth in the last decade was just average — giving the state no new seat in the House of Representatives for the first time in 90 years — that’s largely because the state’s job growth during the last 10 years was also just average.

    Then there’s Texas, which added more people in the last decade than any other state. As its population surged nearly 21% to more than 25.1 million this year, the Lone Star State added to its expanding economic base and its congressional delegation. The latter is a significant source of future economic vitality because of the growing delegation’s ability to steer federal spending to the state.

    Texas shares some of the same appeal as some other Sunbelt states: low home prices and pro-business, pro-growth policies. But Texas didn’t suffer a housing bust as it never enjoyed a housing bubble. And it has a diversified economy, with expanding ports, medical services and its mainstay energy industry, which has held up fairly well throughout.

    As a result, the state has bounced back from the recession faster. Its unemployment rate has fallen to 8.2%, while California’s remains stuck at above 12% and the nation’s is hovering near 10%.

    Businesses are following the people. Laura McGuire and her husband, George, plan to expand their home healthcare business in Texas next month. The couple have been running Griswold Special Care franchises in San Antonio since 2003, but will open two offices in Houston, one of the fastest-growing cities in America.

    Laura McGuire said many of her clients are coming from more-expensive states.

    “I see people selling their shacks in California and buying homes three times as big here,” she said.

    Statewide, half of previously owned homes in Texas sold for less than $147,000 last month, compared with a median price of nearly $297,000 in California.

    Reaction…

    This could have an enormous effect on which malls come out of the ressession stronger & wich end up like Palm Beach Mall.
    As for the residential side, Miami, Las Vegas & Phoenix way over built the number of housing units that were nessessary to supply there respective metropolitan areas. If you go to http://www.realtor.com you can search for properties & discover just how out of wack things got. In downtown Miami for example several large complexes are half empty or more. Several complexes I saw had 40 or more units for sale & the prices looked as if they were left at 2007 levels.

    Who is going to buy those properties now? What will be the effect on the nearby malls? To be continued.

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  12. More on Cincinnati Mall, which has yet to be seen on Labelscar.

    Cincinnati Mall details vision
    ENQUIRER STAFF REPORTS • JANUARY 27, 2011
    Comments (44) Recommend (6) Print this page ShareThis Font size:AA
    The general manager of Cincinnati Mall on Thursday presented the latest redevelopment plan for the property, which has struggled to retain tenants in recent years.

    Karla Ellsworth, general manager as of December, said the region’s largest retail center, which spans 1.6 million square feet in Forest Park and Fairfield, wants to open:

    – A 170,000 sq ft Candlewood Suites with two upper levels;

    – A 100,000-square-foot ice hockey arena;

    – An indoor mountain bike park;

    – An agriculture museum;

    – A water park.

    The attractions would be interspersed throughout the mall. If every project is financed, Ellsworth said the development could bring 2,000 jobs to the area.

    Ellsworth said the mall is also attempting to renew leases with its anchor stores, including Bass Pro Shops, Kohl’s, and Burlington Coat Factory.

    She said she would like the development to be complete in three years, but said that depends on financing and permits. The projects would be joint ventures, she said, and are meant to create “a family-friendly” environment.

    “We are looking to do this with people who have done this before, who have experience in their industries,” she said.

    She added that, over the next six months, the property will consider dropping the word “Mall” from its name and consider a new one.

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  13. What happened to the Forest Fair mall article?

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    David Walsh Reply:

    @Joe, Yeah +1???

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  14. @Joe: I have a feeling the contents of it earned them a C&D from somebody…

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  15. From who? The mall owners?

    All I said was that I didn’t want to be quoted what I didn’t actually quote.

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  16. Yeah. I almost thought the fact that the mall was open would be charges for some sort of suit.

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  17. Perhaps defamation? The fact that photos showed the mall as dark, empty, and thoroughly creepy may have been thought to be bad press.

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  18. Defamation? It’s not like it was photoshopped or anything untrue was said that applies to its current owners.

    Also, given the ICSC already took numerous photos of this place and published it, I can imagine them having a legitimate case.

    It just adds to the ongoing mythology (lost corridors, food court fires, etc.)

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    Pseudo3D Reply:

    @Alpha, and the gang wars, too. Did those actually ever occur?

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    alpha Reply:

    @Pseudo3D I don’t think the gang wars ever occurred any more so than what the now-ailing Tri-County-Mall puts up with. There might’ve been some bad behavior due to the working class neighborhoods, but as for the gang wars I don’t think they happened.

    Regarding the second food court, that one is somewhat true. When I first visited the entire mall in 1998, Gold Star Chili was indeed open on the second floor (across the hall from the current food court and on the 2nd level) and there was a small seating area, however Moore’s Fitness was mostly occupying this area with a newly carved-out location (They’d move down to Guitar Center within a couple months as well and years down the line Showcase Cinemas would open up there.).

    There was a Greek place I used to frequent (and was friends with the owners) that had been there from the start. They had never moved their location until Mills kicked them out, so the food court on the bottom was likely always there.

    So I don’t think the other food court (which was likely just a smaller secondary one) burned down per se, I think the space just got carved up, and by the time it was drywalled it was due to Moores moving.

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    David Walsh Reply:

    @alpha, Yeah, the Greek place moved from the Markets International specialty mini-mall in Springdale. BW3’s used to be in the bottom part of the food court before they moved to their present free-standing location by Izzy’s, Walmart, et al. The second story food court was indeed smaller, but it was there. I can’t honestly remember much of the actual layout. I’ve been going to FF for the first few years of its existance.

    Shame about the article on it being taken down – it was well written and quite fascinating (and dare I say it, accurate).

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  19. MaxRave, the specialty store selling dirt-cheap women’s clothing (Rave), declared bankruptcy and closed all of its stores.

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  20. Borders Group Inc. filed for Chapter 11 Bankruptcy Protection this morning. The company has $1.29B in debt and $1.28B in assets. Preliminary plans call for the closure of 30% of stores.

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    SEAN Reply:

    @CE, Here’s an article from CNN Money

    Borders in bankruptcy, will close about 200 stores

    Borders will close 30% of its stores after filing for bankruptcy protection.
    By Aaron Smith, staff writerFebruary 16, 2011: 9:16 AM ET

    NEW YORK (CNNMoney) — Borders Group has filed for Chapter 11 bankruptcy, and plans to close about 200 of its stores and reduce its staff, the book retailer said Wednesday.

    “It has become increasingly clear that in light of the environment of curtailed customer spending, our ongoing discussions with publishers and other vendor related parties, and the company’s lack of liquidity, Borders Group does not have the capital resources it needs to be a viable competitor,” the company said in a statement.

    “As we do close down the stores, ultimately there will be a reduction in employees,” said Borders spokesman Donald Cutler. But he didn’t say how many workers would lose their jobs.

    Borders currently has 659 stores and employs nearly 20,000 workers, including 5,842 full-time employees, both regular and temporary, and 13,661 part-time employees, said Cutler.

    Wall Street has been expecting the filing from the struggling company.

    “This decisive action will give Borders the opportunity to achieve a proper infusion of capital in order to have the opportunity to have the time to reorganize in order to reposition itself to be a successful business for the long term,” said Borders Group president Mike Edwards, in a press release.

    Borders said it has received a commitment for $505 million in “debtor-in-possession financing” from GE Capital’s Restructuring Finance division.

    Borders said it will close its most under performing stores in the next several weeks, a decision based on “economic conditions, cost structures and vitality of locations.”

    The company said the remaining stores “will continue to run in normal course.”
    Mean while according to the NYT Deal Book, you have 30-days to use up any gift cards. That sounds like a total shut down to me.

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    rob Reply:

    @SEAN, They are closing garden state plaza and Fort Lee n.j stores , theres one near wall street in manhattan i wonder if that location is closing.

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    SEAN Reply:

    @rob, OH CRAP! I was afraid of that. Tried to read the PDF file on there site reguarding store closures, and it froze my computer.

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    mallguy Reply:

    @SEAN, The List: GS Plaza, Freehold Raceway Mall :( Watchung, Fort Lee.

    West Windsor/Princeton recently close, as did Livingston. Watchung doesn’t surprise me, as Bridgewater is about 10 mi away. I am especially surprised about Ft. Lee, GSP and Freehold.

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    rob Reply:

    @SEAN, I bet Barnes and Noble will take over GSP STORE. Thats one good thing with westfield and the management of Garden State Plaza they replace empty stores fast because its a very good mall, not like pyramid cos.

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    SEAN Reply:

    @rob, Barns & Noble already has an enormus 2-story location on 17 south near the parkway interchange. I’m not sure if they want to have another location that close. That said , this is Paramus after all so anything is possible.

    On top of this GSP needs to fill the void left by Restoration Hardware as well. I have no doubts that those spaces will be filled by quality tennents & not by Kids for Less.

    YOU HERE ME PALISADES?

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    Tim Reply:

    @SEAN, What’s the over/under on @rob bringing up Belk or Dillard’s as the replacement for Borders at GSP? :P

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    SEAN Reply:

    @Tim, Vegas puts the line at a week & a half, LOL

    PLACE YOUR BETS!

    secondavenuesagas.com reports that Apple will open there largest store ever at GCT in september.

    [Reply]

    rob Reply:

    @Tim, Hey smart alec I used to work at gsp at jc penney borders is no size for a major dept store. Grow the hell up with the dillards and belk remarks.

    [Reply]

    SEAN Reply:

    @rob, Like I said, PLACE YOUR BETS! There’s no way those stores will take the Borders space. I rather see Love Sac go in there, but they couldn’t sell enough super sacks to justify such a move.

    [Reply]

    rob Reply:

    @SEAN, I think you meant Tim not me with the place your bets thing. GSP will find another clothing or shoe store to replace restorattion and borders. GSP is a popular draw and area for stores.

    [Reply]

    SEAN Reply:

    @rob, My bad, I inadvertently dropped my remark in the wrong place.

    Perhaps H & M could move from there existing store to RH’s spot wich is quite large & perfect for them as they been transforming into junior anchors in recent years. The Borders space is a bit tricky do to the fact that there are already enough clothing stores there & what kind of lifestyle retailer or eatery could be added that doesn’t exist in this area. Five Guys &Anthany’s Coal Fired Pizza come to mind.

    rob Reply:

    @SEAN, I could think of a few stores Josabank menswear, chicos,crate and barrel. Westfield is the better mall owner than the other two.

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    SEAN Reply:

    @rob, Hmmm, the first two you mentioned could easily work. As for Crate & Barrel have you sene the size of there stores in Short Hills, White Plains & 59th & Madison? They are junior anchor size stores & the only way it could work is if they take out the whole side between RH & the garage access as you walk toward the food court. I think it is 5 or 6 aditional store spaces on top of RH’s storefront. I’m not sure if Westfield wants to wipeout that much square footage for a single retailer because that is a lot of space to refill if or when C & B decides to leave.

    [Reply]

  21. CNN Money

    The American mall: Back from the dead
    By Shelley DuBois, reporterFebruary 15, 2011: 1:53 PM ET

    FORTUNE — It has gotten progressively less cool to meet at the mall since the heyday of the mega shopping center in the 1980s. But starting in the 90s, a downward trend found “anchor” department stores in malls steadily losing their grip on young shoppers, and with them, retail market share. That is, until this year.

    The swing hasn’t been huge, but it’s significant. Department stores anchored to malls actually gained market share over off-mall retailers for the first time since the 1980s. In 2009, the market share of mall-bound department stores had fallen to 2.4%, according to a report by consulting firm Customer Growth Partners. But in 2010, it started to creep up to 2.5%.

    “Even though it was only a tenth of a share point, for department stores, that is a huge change,” says Craig Johnson, president of Customer Growth Partners. “This is a real turn in the market. We’re optimistic that the momentum is just gathering.”

    It’s happening for a couple of reasons. Across the board, consumer spending is picking up since the recession. For decades, consumer spending had been shifting towards off-mall stores. Now, big department stores are doing better, and their success is helping boost the developers who build the malls themselves. So how did they break the cycle?

    For one, the retail outlets doing well aren’t following the traditional growth strategy of building more and more: “The country is kind of over-malled and over square footed,” Johnson says. A couple of other factors are changing to make malls more profitable:

    Department stores are making a comeback.

    Namely, Macy’s and Nordstrom , both anchor department stores for malls, are doing well. Revenue at Macy’s was up to $25 billion for 2010, which is up 6.5% from the previous year. Nordstrom, another key department store for malls, increased total retail sales by 12.7% for 2010 compared to 2009. Part of that is due to the success of their outlet stores, Johnson says, but these retailers are also sharpening their anchor-store inventory to capitalize on consumer spending.

    Stores that aren’t doing well are on the outs.

    Department stores like clothing store Mervyns and home décor retail outlet Montgomery Ward used to take up lots of square feet in malls. But post-recession, they have had to consolidate, which has meant that many of them have had to move out of malls. That led to the highest mall vacancy rates in decades during 2008 and 2009, according to the Customer Growth Partners report.

    But the exodus had an upside. It cleaned out struggling stores, enabling a fresh cadre of retailers to move in. U.S. retailers including Aeropostale, Forever 21, Love Culture and Vera Bradley started leasing anchor-store sized space in malls as the failing department stores vacated them. So did foreign companies including H&M, Pandora and Sephora. The influx of newer stores keeps malls fresh for consumers, and appears to be keeping them coming back.

    More and more, major mall developers including Simon, Tanger and Westfield are seeing vacant spaces fill back up. The turnover is providing a good opportunity to renovate and freshen up interiors, another tactic that is helping to keep malls at the forefront of shoppers’ minds.

    There’s a new, more inclusive mall mentality.

    Malls are also opening their arms to stores traditionally considered off-mall. For example, Australia-based mall developer Westfield is welcoming stores onto its mall properties that tap into a lower price range. Westfield, for example, has 9 Target stores in its properties. (And some retailers, Fortune recently noted, are creating “stores within stores” to earn rent on their unused square footage.)

    The company has also been renovating its property by installing movie theaters, gyms, grocery stores and even hotels next to the lineup of fashion retailers. That’s an industry trend, Johnson says.

    Customers don’t actually see a conflict between shopping at a high end clothing store and a Target in the same space, says Westfield spokeswoman Katy Dickey — rather, they want it all. They also want to access stores easily. That means making changes down to the architectural level. For instance, developers are turning malls built like customer-trapping chutes into more open places with access to all major stores from multiple entrances.

    Some of the most promising new developments by successful mall builders in mild climates are completely open-air, says Johnson. They don’t feel very mall-like in the traditional sense.

    Not that the mall model isn’t sound, says Dickey. “I think the bones are still good. There’s convenient parking and a wide range of goods and services — those are the bones. They need to be well dressed. Not expensively dressed, but appealingly dressed.”

    The new generation of malls needs to be built with every kind of store, all of them as easy to access as a Safeway. Then, she says, as the positive results from Westfield’s renovations show, customers will stay longer and spend more.

    [Reply]

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