KeyPoint Partners Retail RoundUp

Thursday, July 9, 2009

Smith & Hawken is shutting down

Parent company Scotts Miracle-Gro, of Marysville, Ohio, said it will shutter all 56 Smith & Hawken stores in 22 states after efforts to sell the struggling chain stalled. Going-out-of business sales began today.

"The combination of a weak economy and the lack of scale proved too great to overcome," Scotts Chief Executive Jim Hagedorn said in a statement. "By eliminating the losses from Smith & Hawken, we can invest even further in driving profitable growth.". . . more

Crate & Barrel's CB2 scouts D.C. for new store

Furniture retailer Crate & Barrel is looking for space to bring its CB2 store to D.C., according to a source familiar with the deal.

CB2, which is aimed at a younger and more urban market than Crate & Barrel, is considering taking space along the 14th Street NW corridor in a planned office-retail project at 1350 R St. NW. The project is being develped by Jeffrey Schonberger, principal at Alturas Real Estate Interests LLC. . . . more

Ritz Camera gives up reorganization efforts, plans to sell remaining stores

Ritz Camera Centers Inc., which has been struggling to reorganize and save roughly 400 of its more than 800 stores, says it no longer has enough money to purchase fall inventory and continue operations.

Beltsville-based Ritz Camera, which is in Chapter 11 bankruptcy protection, says the lack of funds now forces it to auction off its remaining locations by the end of July.

Ritz Camera says, in a court filing, that it is talking with two potential bidders, although neither has been willing to sign a contract. The company is hopeful at least some of the remaining 400 photo stores will be sold to a going-concern buyer. The other 400 stores already have been closed in going-out-of-business sales. . . . more

HHGregg Inc. planning major expansion in Mid Atlantic starting next year

Appliance and electronics retailer HHGregg Inc. is poised for a major expansion in to the mid-Atlantic region.

The Indianapolis-based company plans to open 40 to 45 new stores in fiscal 2011, mainly in Washington, Baltimore and Philadelphia. The retailer’s fiscal 2011 runs from March 2010 to March 2011.

The expansion will be HHGregg’s (NYSE: HGG) initial foray into the mid-Atlantic and will follow onetime electronics giant Circuit City’s exit from the market following bankruptcy. . . . more

Tuesday, July 7, 2009

June sales likely rained out for U.S. retailers

Unseasonable weather and consumers without the stimulus boost they received last year were expected to have dampened U.S. retail sales in June, analysts said.

The month was "particularly challenging" for stores selling summer products as the first three weeks were cooler and wetter than usual, according to weather tracking firm Planalytics.. . . more

Smith & Hawken needs more green to stay alive

Smith & Hawken will call in the liquidators for its 56 stores unless the corporate parent of the premium gardening chain and catalog company reaches a last-minute deal with potential buyers, according to sources close to the negotiations.

Scotts Miracle-Gro Co. of Marysville, Ohio, purchased the chain for about $70 million in 2004. Smith & Hawken has been losing money as the U.S. recession has discouraged spending on the company's luxury and leisure items, such as a $600 hammock stand made of cypress.. . . more

Big Lots Test Store Experiments in Improvement

Big Lots is cleaning up its act and is well positioned to grow as recovery takes hold in the market, noted Wedbush Morgan analyst Joan Storms after meeting with company executives including CEO Steve Fishman and touring a store near the company’s Columbus, Ohio headquarters used to evaluate new ideas.

The tour store is located adjacent to the Polaris Fashion Place mall in Columbus, and, at about 35,000 square feet, is somewhat larger than is typical for Big Lots. The former Linens ‘N Things space is in a more upscale environment than is common for a Big Lots store, but Storms said the company is using the location to its advantages as it tests fresh notions on a wide range of customers.. . . more

PetSmart Ducks the Recession

Sure, we might be facing one of the most difficult economic downturns in modern history, but consumers are still buying dog diapers, pet food cookbooks and orthopedic beds for their animals at PetSmart, according to Barron’s.

The retailer’s same-store sales rose 4% in its most recent quarter, while earnings were up 16%. And Americans are on track to spend $45 billion on their pets this year, up 5% from 2008.. . . more

Developer seeks rehearing of Demoulas variance

Seabrook, NH-The attorney for Developers Diversified Realty has petitioned Seabrook's Zoning Board of Adjustment for a rehearing on the May 27 variances the board awarded Demoulas Supermarkets for the renovation and expansion of their shopping center located north of the Route 1/107 intersection.

Demoulas received three variances from the ZBA for its project known as Market Basket North; one allows Demoulas to put two buildings on one lot, instead of only one as town zoning permits. DDR representatives were not present at the May 27 hearing.. . . more

Yes, The Jobs Losses Hurt ... But the recovery is still on track.

A double thumbs down was the response of markets and analysts to the June jobs report, which was released last Thursday. The Dow Jones industrials fell 223 points (or 2.6%), and many economists who had been getting more hopeful became more bearish on the outlook for the economy.

The negativity was driven by three parts of the report in particular. First, the overall drop of 467,000 jobs in June was a larger loss than in May and 100,000 more than the consensus expected. Second, the average workweek in the private sector fell to 33.0, the lowest on record, while total hours of work declined 0.8%, the largest drop in three months. Third, average hourly earnings were unchanged in June and are up at only a 0.7% annual rate in the past three months, the slowest pace on record (dating back to 1964). . . . more

Small Retail Trading at More Aggressive Cap Rates

CATONSVILLE, MD-A fully leased 4,047 square foot retail strip center located outside of Baltimore recently traded for $1.2 million, or $305.90 per square foot. The buyer was AK Holdings; the seller was an affiliate of MDRE Equities. Perhaps more notable, the fully leased Paradise Junction traded at an aggressive cap rate of 7.79%--which is not uncommon among small sized deals these days, according to Dean Zang of Marcus & Millichap. Zang along with Mark Taylor and Derrick Dougherty represented the seller.

Lately, he tells GlobeSt.com, "we have been finding that the smaller deals are trading at more aggressive cap rates--and creating opportunities for owners that have outparcels in retail holdings." These companies have been selling off such components; in some cases the parts are proving to be more valuable than the whole, he says. "We are even representing some REITs that are carving out these parcels and reselling them in small sized transactions.". . . more

CBRE Realty Trust Goes Shopping

In the middle of a follow-on public stock offering that has raised more than $79 million this year for CB Richard Ellis Realty Trust, the REIT has started going shopping and recently signed several purchase contracts.

It has agreed to acquire to following properties.

3011, 3055 & 3077 Comcast Place in Livermore, CA, a suburb in the eastern portion of the San Francisco Bay area for $49 million. 3011 - 3077 Comcast Place is a 219,631-square-foot office park consisting of one two-story building and two one-story buildings, with surface parking lots, completed in 1987/88 and fully renovated in 2009. The property is 100% leased to Comcast of California/Colorado/Washington I Inc. through December 2023. . . . more

Maryland seeks developers for Marc station in Laurel

The Maryland Transportation Authority and the Maryland Department of Transportation have called for conceptual proposals for the area around the Laurel Marc Train Station.

The two transportation organizations will either lease or sell 4.35 acres along the Camden Line in Prince George’s County to the selected developer for a mixed-use, transit-oriented project. . . . more

Thursday, July 2, 2009

Rise in CMBS Delinquency is Expected

NEW YORK CITY-On the surface, the June rise in CMBS delinquency over May looks especially alarming: the rate appears to have crept past 4% months ahead of the year-end time-frame predicted by Moody’s, and has increased about 175% since last month. But that bulge is due largely to several of the loans associated with the bankruptcy of General Growth Properties, which inflate the tally, according to Trepp. Even so, the locally based provider of CMBS information says the delinquency rate is going to keep ticking upward.

"It’s hard to see anything turning it around, absent the capital markets rebounding," Manus Clancy, managing director at Trepp, tells GlobeSt.com. He cites eroding fundamentals across the asset classes. . . . more

Eddie Bauer creditors win a round in court

Eddie Bauer’s major creditors have won a concession from a bankruptcy judge that could lead to breaking up the distressed retailer’s assets instead of selling the entire lot to a private equity firm that wants to run the company as a going concern.

In setting a July 16 date to auction off Eddie Bauer’s assets, U.S. Bankruptcy Judge Mary Walrath of the U.S. Bankruptcy Court in Delaware, agreed to not require any potential buyer to make a bulk bid for the assets. Instead, Walrath agreed with major creditors and debt holders that bids would be accepted for all or a portion of the Bellevue-based retail chain’s assets.. . . more

Rite Aid Reports 0.6 Percent Same Store Sales Decrease for June

CAMP HILL, Pa.--(BUSINESS WIRE)--Rite Aid Corporation (NYSE:RAD - News) today announced sales results for June.

For the four weeks ended June 27, 2009, same store sales decreased 0.6 percent over the prior year period. June front-end same store sales decreased 4.5 percent while pharmacy same store sales, which included an approximate 484 basis points negative impact from new generic introductions, increased 1.4 percent.

For the four weeks ended June 27, 2009, same store sales excluding the acquired Brooks Eckerd stores were flat compared to the prior-year period with front-end same store sales decreasing 4.4 percent and pharmacy same store sales increasing 2.6 percent.. . . more

Department stores lose ground on annual retailers' list

For a glimpse at how the retail landscape has changed since this recession began in December 2007, look no further than the annual list of the nation's largest retailers.

Department stores are shrinking. Discount chains are growing. And Wal-Mart Stores Inc., the long-standing top seed, is so far ahead of its peers that the second through seventh largest retail chains combined would still generate less annual revenue than the $405.6 billion rung up at the world's largest retailer last year.. . . more

A.C. Moore finishes first half in strength

Rick Lepley faced a challenge: How to get stingy customers to spend during the recession while still streamlining operations at A.C. Moore Arts & Crafts Inc.

Lepley, the chief executive officer of the Berlin retailer, took steps to make the business more efficient, helping to boost its stock price 169 percent so far this year. That made A.C. Moore the biggest gainer in the first half of 2009 among local stocks that ended at $3 per share or higher. . . . more

Pier 1 CEO sees 'light at the end of the tunnel'

FORT WORTH — Selling real estate and renegotiating rents are just some of the measures enabling Pier 1 Imports to emerge from its financial troubles, Alex Smith, president and CEO, told shareholders Wednesday.

In a letter to investors in the annual report, Smith said that fiscal 2009 should have been "the year we broke even" but that double-digit declines in traffic in the second half of 2008 cut operating profit. . . . more

Crabtree & Evelyn files for Chapter 11 bankruptcy

Crabtree & Evelyn, the maker of soaps, gifts and toiletries sold in 126 stores in 34 states, filed for bankruptcy protection in New York, citing a decline in consumer spending.

The company, based in Woodstock, Conn., reported $46.2 million in assets and $33.2 million in liabilities in Wednesday's bankruptcy petition.. . . more

Tuesday, June 30, 2009

Dealing with the rain

Merchants counter wet weather with discounts, sales to attract customers

Salon Capri owner Nicholas Penna Jr. is doing what he can to keep the rain from washing profits away.

After weeks of weather-related cancellations, Penna launched a Puddle Jumper pedicure special, which lowers the price of the Newton salon’s luxury pedicure by $1 each day it rains in June - and includes an umbrella-covered escort from the parking lot. By yesterday, the $45 treatment was $38, a price Penna didn’t think he’d ever get to.. . . more

Rite Aid Completes $1.9 Billion Refinancing Of Its September 2010 Debt Maturities

CAMP HILL, PA (June 29, 2009) - Rite Aid Corporation (NYSE: RAD) announced today that it has successfully completed its previously announced refinancing of the majority of its September 2010 debt maturities, including its $145 million Tranche 1 Term Loan and $1.75 billion senior secured revolving credit facility.

The comprehensive refinancing plan was accomplished in a series of transactions. . . . more

Grocers on defensive as dollar stores rise

In addition to heightened competition from top U.S. food seller Wal-Mart Stores Inc., grocers must also defend their turf against scrappy dollar stores that are using food to tempt shoppers like Bugueno, amid the recession.

Family Dollar Stores Inc. has added 200 new food products, like Triscuit crackers and Kraft salad dressing, while Dollar Tree Inc. is installing freezers and coolers to sell ice cream, sandwich meat and frozen dinners.. . . more

Retailers' early summer sales doomed

NEW YORK – As consumers get ready to celebrate July Fourth, many merchants already have dismissed summer as a washout.

Macy's flagship store has racks of summer tops, swimwear and dresses marked down as much as 50 percent, while luxury retailer Bergdorf Goodman is slashing prices on designer goods by as much as 70 percent. Meanwhile, piles of clothing as well as barbecue grills, tents and gardening tools are bypassing stores and heading straight to liquidators as merchants try to conserve their cash.. . . more

Monday, June 29, 2009

America's Most Profitable Malls

Everybody knows that American shoppers have cut back their spending, driving some retailers—and even some malls—out of business. But commerce hasn't ground to a complete halt, and Americans are still spending on some things. Somewhere.

Using data from Green Street Advisors, an investment research firm in Newport Beach, Calif., that specializes in publicly owned real estate companies, U.S. News identified malls in which the retail economy is relatively healthy. . . . more

Tough times? Not for Kearney, Neb., retailer

KEARNEY, Neb. -- The recession doesn't seem to be holding back a Kearney company from growth.

The Buckle has unveiled plans to build a 240,000-square-foot distribution center. The new center will be used to service and supply The Buckle's 391 stores it operates in 40 states. . . . more

Redbox becomes cashbox

Refrigerator-sized movie dispenser shows up competitors

Karen Forman constantly needs something from the grocery store. Milk, bread or a movie.

Yes, a movie.

Renting movies has never been more convenient, cheap or ubiquitous.

Redbox, the $1 do-it-yourself rental machine the size of a refrigerator, offers DVD movie renters convenience at a place people visit all the time: the grocery store, among other places. . . . more

Is this the future bookstore?

Machine downloads books from a massive database while the customer waits

The Northshire Bookstore, in quaint Manchester Center, Vt., has all the classic trappings: exposed beams, wood tables stacked with hardcover bestsellers, comfortable leather chairs nestled into alcoves.

And then there’s “Lurch,’’ a hulking jumble of machinery that is often groaning and shuddering in a corner behind the sales counter.. . . more

Ruth’s Chris Owner May Raise $200M

HEATHROW, FL-Locally based Ruth’s Hospitality Group Inc. seeks to raise up to $200 million in capital through the sale of various types of securities. The company, which owns Ruth’s Chris Steak House and a number of other restaurant chains, filed a Form S-3 shelf registration statement with the Securities and Exchange Commission late last week.

Ruth’s stated in a release that it has no current commitments or intentions to sell securities, but made its SEC filing for flexibility to access capital markets as needed. A written prospectus will be issued in advance of any securities offering, the company said.. . . more

Upgrading Wal-Mart

Retailer aims to keep a new flock of customers.

The recession steered a new type of customer to Wal-Mart — deeper in the pockets and suddenly looking for bargains. Now the world's largest retailer has to figure out how to keep that customer when the economy recovers.

So Wal-Mart is bringing in more brand names, ditching scores of other products and even redesigning hundreds of stores to give them wider aisles, better lighting and better sight lines. . . . more

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