Posted: 5:05 pm Wed, December 28, 2011
By Burl?Gilyard
Tags: Borders, Christoph & Banks, Craig Hoium, Dick Grones, Gander Mountain, Gordmans, Herberger's, Jess Myers, Katie Cody, Kmart, Lowe's, Ned Rukavina, Sears, Walmart, Whole Foods
Home improvement retailer Lowe?s closed its store in Rogers at 13800 Rogers Drive in November. The store was open for five years. (Staff photo: Bill Klotz)
While some retail observers see encouraging signs in the market, store closings continue to cloud the big picture outlook for retail commercial real estate.
At the end of the holiday shopping season, retailer Sears Holdings Corp. announced plans this week to close 100 to 120 Kmart and Sears stores across the country. The Hoffman Estates, Ill.-based retailer has not yet detailed which stores it plans to close in response to sagging sales.
?It?s the time of year when we see a lot of shakeout,? said Dick Grones, a veteran retail broker and principal with Edina-based Cambridge Commercial Realty.
According to its most recent annual report, at the end of January, Sears Holdings operated 28 Kmart stores, 12 ?full-line? Sears locations and 41 Sears specialty stores in Minnesota.
Grones said Kmart is not well-positioned in today?s retail landscape.
?I think Kmart?s been out of business for many years and didn?t know it,? Grones said.
A Sears Holdings website lists 58 stores across the U.S. that have already been closed currently listed for sale or lease. That includes former Kmart locations in Austin and Fairmont in southern Minnesota. The retailer is also offering to lease portions of some currently operating stores.
But Sears isn?t alone in closing stores.
Mooresville, N.C.-based home improvement retailer Lowe?s Cos. Inc. closed its store in Rogers on Nov. 13, one of 20 underperforming locations being shuttered by the retailer. Lowe?s owns the 120,000-square-foot store on a 13-acre site at 13800 Rogers Drive in Rogers. Lowe?s spokeswoman Katie Cody said the store opened in October 2006.
In November, Plymouth-based Christopher & Banks Corp., a women?s apparel retailer, announced plans to close about 100 of its 761 stores. In Minnesota, the company is closing its Albert Lea store and consolidating two Roseville locations into a single outlet.
St. Paul-based Gander Mountain has announced plans to close a 37,000-square-foot store in Maple Grove.
?It?s basically just a matter of size. This store opened in 1995; it was one of our smaller-format stores ? it?s in a retail location where it can?t be expanded,? said Jess Myers, a spokesman for Gander Mountain. The specific timing of the store closing has not yet been announced.
Myers said the typical new Gander Mountain store is now about 90,000 square feet, adding that Gander Mountain has 115 stores and will have 11 in Minnesota after the Maple Grove store closes.
This year, Borders Group Inc. filed for bankruptcy and was ultimately liquidated. Borders operated seven Twin Cities stores when it filed for bankruptcy in February.
The San Francisco-based Gap Inc. announced plans in October to continue to trim its store count in North America while it expands internationally. At the end of 2013, the company expects to have 34 percent fewer U.S. Gap stores than it had in 2007.
Retail broker Ned Rukavina of Bloomington-based Cushman & Wakefield/NorthMarq Real Estate Services said the announced closings of Sears and Kmart locations are hardly a surprise.
?We?ve been watching Kmart and Sears for the last five to six years because it just didn?t seem to be sustainable,? Rukavina said.
But Rukavina said the overall retail numbers are encouraging. Cushman & Wakefield/NorthMarq?s midyear market report showed positive absorption ? the increase in occupied space ? of 509,000 square feet of retail space from July 2010 through June 2011.
?There was positive absorption. Luckily there are retailers looking. We still see a trend of things improving,? Rukavina said.
Bentonville, Ark.-based Wal-Mart Stores Inc. is among retailers who are expanding locally. A Walmart superstore will anchor Shingle Creek Crossing, the redevelopment of the former Brookdale shopping mall in Brooklyn Center.
The York, Pa.-based Bon-Ton Stores Inc. opened a new Herberger?s store at Southdale in November in a former Mervyn?s space that stood empty for seven years.
Austin, Texas-based Whole Foods Market Inc. opened a store in Minnetonka in October, taking over a former Circuit City space. The grocer has a store opening in Edina set for the spring of 2012 and is known to be looking for other Twin Cities locations.
Omaha, Neb.-based Gordmans Stores Inc. will open its third local location next year with a 65,000-square-foot store at the Crossroads of Roseville.
But south of the Twin Cities, in Austin, city leaders are still hoping that someone will move into the 90,000-square-foot former Kmart that has been vacant for a few years.
Craig Hoium, community development director for the city of Austin, said the store is in an area of town with other big-box retailers such as Target, Walmart and ShopKo. He said the city would like to see a home improvement retailer take the space, but at the moment there?s nothing on the horizon.
?The city did have some conversations with another big-box retailer about it,? Hoium said. ?Obviously, we?d like to see it being utilized.?
Source: http://finance-commerce.com/2011/12/attention-shoppers-we%E2%80%99re-closed/
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