Friday, February 27, 2009

Retail REITs Seek Out Value-Oriented Tenants

ORLANDO—The tough economic environment for retailers is translating to a challenging environment for their landlords and net lease REITs that are focused on the retail segment are sounding increasingly cautious as a result.

While Orlando-based National Retail Properties Inc. had record operating results for the last quarter of 2008, CEO Craig Macnab noted during the company’s Q4 conference call earlier this month that “clearly we are operating in a different economic environment this year.”. . . more

Zale says holiday markdowns hurt its profits

Zale Corp. said Wednesday that if it could rewind Christmas, it wouldn't put the whole store on sale.

Zale Corp. plans to close 115 stores and said it cut 245 jobs this month, primarily at its Irving headquarters. The company missed forecasts and posted a loss during the holiday quarter, when it usually earns the bulk of its profits." It was just the latest retailer to report damage to profits from unplanned markdowns.

Since January, the Irving-based jeweler has returned to a traditional promotional stance, and profits and sales have improved, chief executive Neal Goldberg said.. . . more

Equity One Puts Faith in Grocer-Anchored Centers

NORTH MIAMI BEACH, FL-Locally based Equity One Inc. saw a significant drop in year-over-year funds from operations in 2008, but the retail REIT is positive about the upcoming year as its shopping centers are mainly grocer-anchored. According to the company’s latest earnings report, funds from operations in 2008 totaled $60.5 million versus $98.4 million in 2007. Investment sales activity was also off by 75%.

“The good news is we saw revenue increased by 3.3% primarily as a result of built-in rental increases, higher recoveries and positive re-leasing strives,” CEO Jeff Olson said during the REIT’s fourth quarter earnings call on Thursday. Equity also announced that it had acquired a controlling interest, 75%, in DIM Vastgoed, a Dutch real estate company that owns 21 shopping centers totaling 2.6 million square feet on the east coast. . . . more

PREIT Sees a Tough Year Ahead

PHILADELPHIA-Like nearly every other retail landlord in the country, Pennsylvania Real Estate Investment Trust is feeling a pinch as retailers close stores and consumers spend less time shopping. In this environment over the last year, the company’s fundamentals held up, but there were dips in occupancy and sales per square foot.

Sales per square foot at PREIT’s 53 malls and strip centers fell from $358 to $342 in fiscal 2008 compared to the prior year, while total occupancy dipped slightly, from 91.2%, to 90.9%. “Many retailers in our portfolio experienced a difficult 2008, and have taken a step back to asses market conditions,” said Ronald Rubin, the company’s chairman and chief executive officer, during its fourth-quarter conference call. . . . more

Plunging value of shopping malls triggers A$2.2bn loss for Westfield

Westfield, the world’s largest listed shopping centre operator, reported full-year net losses of A$2.2 billion (£1 billion) yesterday because of the slumping value of its malls.

The loss, which compares with a profit of A$3.44 billion the year before, was driven by writedowns of A$3.3 billion in the value of its malls.

Westfield, which owns and manages 119 malls around the world, said its operating earnings for 2008 rose by 10.4 per cent to A$1.94 billion, driven by a strong performance from the Australian market.
. . . more

Kohl’s Looks to Fill Others’ Vacancies

MENOMONEE FALLS, WI-While lowering the number of new store openings from last year, Kohl’s Corp. plans to take advantage of consolidation where possible, executives said at the company’s fourth quarter conference call.

In fiscal 2009, the Company expects to open approximately 55 stores (including its first store in Alaska), down from 75 openings last year. However, the company had originally planned to open just 50 units, with the increase coming from the availability of more Mervyn’s locations. . . . more

Gap to Grow Outlets, Overseas, Cut Back in US

SAN FRANCISCO-Gap Inc., owner of the Gap, Old Navy and Banana Republic clothing chains will close 100 stores in fiscal 2009, mostly Gap-brand stores in the US, while opening 50 stores, 75% of them being either overseas or outlets. The company also will be looking for concessions from the owners of the buildings it occupies as it looks to lower overall costs while improving its stores, marketing and merchandising in order to recapture store traffic lost to rivals in recent years.

“We’ve had to offer more value to our customers in order to get them inside our stores. Our third party partners, like the vendors who make our clothes, also have had to tighten their belts [to help with that effort], and third party marketing and goods provides also have [done the same] to bring us more value,” chief executive Glenn Murphy told analysts. “We expect the same from the landlord community.” . . . more

Thursday, February 26, 2009

Restaurants and others tempt shoppers with 2-for-1 coupons

Few come-ons are more enticing to folks on tight budgets than these three words: two-for-one.

That may be why, in the economic downturn, two-for-one offers are showing up in so many industries at once — from restaurants to retailers to telecommunications companies. Even some car dealers and home sellers are testing twofers.. . . more

Saks CEO says steep discounts a "one time" thing

NEW YORK (Reuters) - Saks Inc (SKS.N) is taking steps to ensure that the upscale store chain will not have to repeat the margin-dissolving discounts it took in the 2008 holiday season, its top executive said on Wednesday.

The retailer, which has 53 Saks Fifth Avenue stores, is less than two months out of the holiday season, when it marked down some merchandise as much as 70 percent to lure thrifty shoppers into its stores.. . . more

Phoenix ranked 1st for retail distress, but engine likely to return

Phoenix ranks No. 1 when it comes to the likelihood of a rise in distressed retail assets over the next few years, according to Places magazine.

A blog by Vice President of Research Walter Bialas tallied stats on 63 metropolitan markets, including vacancy rates and speed of their deterioration, new inventory in the pipeline and net absorption of such space, and preleasing activity.. . . more

Office Depot Maintains New Store Plans

BOCA RATON, FL-Locally based Office Depot Inc. plans to open 15 new stores this year despite posting dismal financial results for the last quarter and all of 2008. The nation’s second-largest retailer of office supplies also plans to close 118 stores while pursuing sale-leasebacks of some locations it owns.

“We would prefer not to open new stores this year, but we have lease commitments which were pushed out from 2008 that require us to open within a set period of time,” Chuck Rubin, president of North American retail, told analysts during a conference call earlier this week. “We will continue to work to reduce the number of new store openings.”. . . more
Store closing costs, lower demand hurt Sears' net

NEW YORK (MarketWatch) -- Sears Holdings Corp. said Thursday profit declined 55%, hurt by store closing costs and lower demand for appliances and other discretionary items, with the retailer closing an additional 24 underperforming stores.

U.S. comparable-store sales declined 8.3%, hurt by declines in home appliances at Sears and in discretionary purchases such as home goods apparel and both chains. The U.S. same-store sales at Sears fell 11% and dropped 5% at Kmart. While the company's gross margin narrowed by 0.2 percentage point to 27.5%, hurt by increased promotions across most merchandise categories. Kmart's margin, however, saw an increase. . . . more

Changes in the Wind at Wal-Mart

More private label and SKU rationalization are at the core of new strategies.

You can expect an increasingly aggressive private label program, tighter category SKU controls and more focus on “Save Money, Live Better” from Wal-Mart in theyear ahead.

The company has fared better than most in these tough economic times, with higher-income shoppers
trolling the stores more often as the Bentonville, Ark.-based powerhouse capitalizes on its powerful new slogan.. . . more

Wednesday, February 25, 2009

R’Shack Outlines Go-Forward Strategy

Fort Worth, Texas — RadioShack will "burnish" its brand, add more private-label programs, and continue to improve productivity and performance under its 2009 game plan.

Despite weak fourth-quarter results, chairman/CEO Julian Day told investors during an earnings call today that the chain made significant operational improvements in 2008, and that sales have picked up since December.

To keep the momentum going through the new year and beyond, the company will break a new ad campaign in July that leverages RadioShack’s rich heritage while "clarifying its positioning" in the marketplace.. . . more

Home Depot Reports $54M Q4 Loss

Home Depot reported a fourth-quarter loss of $54 million on Tuesday, compared to net earnings of $671 million for the same period in fiscal 2007. The company blames the deficit on its plan to shut its four smaller home-improvement brands, EXPO, THD Design Center, YardBIRDS and HD Bath, and the reduction of support-staff functions. Sales for the fourth quarter, ended Feb. 1, totaled $14.6 billion, a 17.3% decrease from the fourth quarter of fiscal 2007. The fourth quarter of 2008 consisted of 13 weeks compared with 14 weeks of sales in the fourth quarter of fiscal 2007.. . . more

Impairment Charges Hammer Shopping Center REITs In The Fourth Quarter

Shopping center REITs posted a lackluster performance in the fourth quarter of 2008 stemming from impairment charges related to abandoned projects, aborted deals and declining land values. Of the 11 REITs reporting, just one, Saul Centers Inc. (NYSE: BFS) beat analysts' consensus estimates. The other 10 fell short by a range of from $0.01 per share to $1.73 per share for the quarter ended Dec. 31. Nine posted FFO that was negatively impacted by impairment charges related to factors ranging from slumping land values to severance payments for laid-off workers.

Shopping center REITs defied the long-held position that they could weather a recession better than regional mall REITs, because their tenants sell staples including food and pharmaceuticals rather than discretionary goods, says Michael Magerman, senior vice president for the REIT sector with Realpoint LLC, a Horsham, Pa.-based credit rating agency.

"I am not sure if I agree with the premise that shopping center REITs are more insulated from the recession," says Magerman. "It's true shopping center REIT [properties] have supermarkets and drug stores, but they also have a lot of apparel and electronics tenants that are going to suffer along with the regional mall tenants." By the second quarter of 2009, Magerman forecasts, many shopping center REITs will post negative same-store NOI.. . . more

Zale Misses Estimates, Closing Stores

Zale Corp reported fiscal Q2 EPS of 16 cents, ex-items, well off consensus estimates of 48 cents. Revenues in the quarter fell 17.9% year-over-year to $679.4 million, and came in short of consensus estimates of $693.3 million.. . . more

Macy’s Not Renegotiating Rents

Despite total and same-store sales declines, Macy’s relationships with its landlord remains largely unchanged. Mall owners are not attempting to raise common area charges, and the retailer is not engaging in a major rent renegotiation program.

“We have long-term agreements,” explained Karen Hoguet, CFO.

Nor has the trend toward shortening operating hours been a problem, Hoguet added. “Obviously, with weaker malls, it isn’t a good thing,” she said. “But we’re not seeing this as a major issue.” . . . more

Sonic Looking to Open 40 Stores

Sonic, a drive in restaurant franchise, is looking to open between 40 to 50 stores in the Greater Washington area over the next several years. The franchisee for Washington, Denver-based John Platten, will be touring sites in Maryland and Virginia this week for his initial investments, Green Light Principal Peter Framson, tells GlobeSt.com. Green Light is representing Sonic in its expansion into the metro area. Platten did not return a call to GlobeSt.com in time for publication. . . more

Stop & Shop Offering 5% Off Basket

QUINCY, Mass. — In a sign of intensifying price competition in Northeastern markets, Stop & Shop here is offering some customers coupons that will take 5% off their total purchase price. The offering, sent by mail to some cardholders, includes four coupons good for one week each through March 19. . . . more

Owner of Burlington Town Center Edges Near Bankruptcy

The owner of Vermont's second largest shopping mall once again says it is on the verge of filing for bankruptcy.

The Burlington Town Center is the anchor of the Church Street Marketplace. The mall is owned by General Growth Properties based in Chicago, the nation's second-largest mall owner, operating more than 200 malls. . . . more

Target Is Planning To Take Greater Aim At Wal-Mart's Success

NEW YORK -(Dow Jones)- Target Corp. (TGT) is adjusting its approach in a way that may make the retailer more like successful rival Wal-Mart Stores Inc. (WMT) .

Target plans to place greater emphasis on food, health-care products, personal items and other necessities, while offering fewer discretionary items to avoid big markdowns that have hobbled its earnings.. . . more

Tuesday, February 24, 2009

Email Increases Likelihood to Buy by 50%

More than half (57%) of American consumers have more positive opinions about companies that send them emails, and 50% say getting email increases the likelihood they will purchase - either online or offline — from these companies, according to a survey from Epsilon and conducted by ROI research.

The email branding survey, which builds on a 2005 Epsilon study, explores the impact of permission-based email marketing as well as specific vertical product categories, including financial services, retail, CPG, and pharmaceuticals/healthcare, MarketingCharts reports.. . . more

Nordstrom plans to open 10 discount outlets this year

A year ago, Nordstrom’s plan for store growth in 2009 included opening five full-line department stores along with two discount Rack stores.

But that was before the bottom fell out of the economy. Now the Seattle-based retailer that caters to an upscale clientele is banking on its discount Rack stores to help it drive sales. In 2009, Nordstrom plans to open 10 discount Rack stores, out of 13 new stores overall.. . . more

Specialty chain Z Gallerie closing 25 of 77 stores

Gardena. Calif. – Home furnishings and decorative accessory retailer Z Gallerie today announced its plans to soon close about one third of its stores – or 25 units – as the result of “the general slowing of the economy,” a spokesperson told HTT.

“Nothing is closed yet, these are just the plans,” said Dan Hilley, spokesman for the family- owned and operated chain, which currently has a presence in 24 states. “We still don’t know when we’ll close them, and we are still finalizing some of the markets where we plan to close some of the stores.”. . . more

Economists see deeper pain, followed by gain

Group forecasts deeper recession, with turnaround in late '09, solid recovery in 2010.

NEW YORK (CNNMoney.com) -- A survey of leading economists finds them now forecasting a far deeper and more painful recession ahead in the first half of the year, but a modest pickup in the second half of 2009, followed by a solid recovery in 2010.

"The steady drumbeat of weak economic and financial market data have made business economists decidedly more pessimistic on the economic outlook for the next several quarters," said Chris Varvares, the president of the National Association of Business Economics, which conducted the survey of 47 top forecasters in late January and early February.. . . more

Freeport Development Adds More Stores

Boston-Based Developer Announces New Additions

FREEPORT, Maine -- Despite the weak economy, a new retail development in Freeport has added more stores.

The Boston-based developer of The Freeport Village Station said the center will have more than 40 outlet stores, restaurants and a parking garage.

The latest stores announced for the center include the Coach Factory Store, Pac Sun, Sunglass Hut, and the Maine Dog Gift Store. . . . more

Developers Diversified Realty plans to sell 30 million shares of company stock to ease debt load

Developers Diversified Realty slashed at its debt load Monday, announcing plans to sell 30 million shares of company stock to a German family with real estate investments in Europe and the United States.

With more than a 20 percent ownership stake, Alexander Otto and his family will become the largest individual shareholder in Developers Diversified, a shopping center owner based in Beachwood. Company executives described the stock sale, along with other moves announced Monday, as a way to raise cash, cut debt and present a more appealing face to potential lenders.
. . . more

Concerns over traffic at Target mall

Planning Board meeting on the issue gets explosive

SEABROOK — Town planners, residents, and police and fire chiefs are concerned about traffic associated with the proposed shopping center on Route 1.

During a Planning Board meeting last week Attorney Malcolm McNeil, who represents the developers of the proposed mall, Developers Diversified Realty and DDR Realty Seabrook, once again reviewed issues raised since review of the plan began in July 2006. The developers' plans call for the construction of a 449,965-square-foot retail shopping center that would feature a Target store and see the relocation of the current McDonald's to within the confines of the shopping center. . . . more

Mall Owner Posts Gains, Warns About Debt

General Growth Properties said last night that its fourth-quarter funds from operations rose on a series of one-time gains, but the shopping mall owner reiterated warnings that it may be forced to seek bankruptcy protection if it cannot rework the terms of billions of dollars in loans coming due this year. The Chicago company said that funds from operations -- a key measure of performance for real estate investment trusts -- rose 17 percent, to $222.2 million from $190.4 million in the fourth quarter a year earlier.

Excluding one-time items, core funds from operations fell 14.8 percent, to $231 million, or 72 cents per share. Analysts polled by Thomson Reuters had projected core funds from operations of 85 cents per share. . . . more

Monday, February 23, 2009

Loan chain to shut down all NH stores

Advance America says cap law forcing out legitimate business

NASHUA – A second payday lender is leaving the state because of a new state law that went into effect at the first of the year capping the amount of interest short-term loan operations can charge.

Advance America Cash Centers
, a publicly traded company with 2,800 stores nationwide, will shut down all 24 of its New Hampshire stores within a month, said spokesman Jamie Fulmer. . . . more

Tesco US boss says launch approach was wrong

LONDON, Feb 22 (Reuters) - Britain's biggest retailer Tesco PLC (TSCO.L) got its approach wrong to launching in the United States and it may make big changes to the stores, the head of the operation said on Sunday.

Tim Mason, the head of Tesco's U.S. business, was quoted in the Sunday Times as saying its early market research was mistaken.
"We may have assumed that certain elements of the Fresh & Easy brand would do the work for us and we would not have to go down and dirty on price," he said. "That may have been a mistake.

"There's less loyalty in the American market.. . . more

Business-focused Costco Opens in Vegas

LAS VEGAS -- Last week, Costco opened its first Costco Business Center here, on the site of a former traditional Costco location, the Las Vegas Sun reported.

The store, open to all Costco members, is designed to serve and attract business customers, and does not offer the usual Costco items such as apparel, jewelry, sporting goods, pharmacy and in-store dining areas, the report stated.

The store is intended to be a combination office supply store, restaurant wholesaler and convenience store supplier, and features a full-service print and copy center and an increased selection of products, including restaurant, hospitality, convenience store and professional office, the report stated.. . . more

Ritz Camera files for bankruptcy

Feeling the pinch from sliding sales Beltsville-based Ritz Camera Centers Inc. has filed for Chapter 11 protection in U.S. Bankruptcy court in Wilmington, Del. Ritz is the nation's largest camera store chain with more than 1,000 locations in 45 states.

In the filing late Sunday Chief Restructuring Officer Marc Weinsweig said: “The loss of revenues and profit margins from the diminution in the photo-finishing business proved too much of a burden, coupled with the losses experienced by the Boater’s World business, for Ritz Camera to remain a profitable company under its current structure.”

In 1987 Ritz launched Boater’s World, a boating-and-fishing supply retailer with 137 stores now operating. A drop in consumer spending and slumping sales at Boater’s World prompted the bankruptcy filing. The rise in gas prices and other factors led to a “sharp” drop in sales at Boater’s World’s stores, Weinsweig added in the filing.. . . more

General Growth Properties amends loan in Louisiana

Firm in default on two key Las Vegas shopping centers

General Growth Properties Inc. said it amended a loan agreement for Oakwood Shopping Center in Gretna, La., but remains in default on other loans, including those for key shopping center properties in Las Vegas.

The loan maturity date for the Oakwood Shopping Center is extended to March 16, according to a filing with the Securities and Exchange Commission late Friday.

Loans related to the company's Fashion Show and Palazzo shopping centers in Las Vegas expired Feb. 12. . . . more

Lowe’s Testing a Smaller Format

While cutting back its new store growth in 2009, Lowe's Cos. will test a downsized format for use in smaller markets, executives said at the company’s fourth quarter conference call. Of the 60 to 70 new stores expected to open this year (down 40% from the 115 opened in 2008), one will be in a 66,000-square-foot prototype.

“We’re working on that model right now,” said Gregory M. Bridgeford, executive vice president of business development. Most stores will be 94,000 square feet, although one unit will be 80,000 square feet. . . . more

Toronto-based Premier Salons buy 717-store beauty business from Regis Corp.

Canadian salon and spa operator Premier Salons has more than doubled its presence in the United States with the purchase of 717 salon and beauty product stores from Regis Corp.

Premier Salons will now have more than 1,100 locations employing 10,000 employees in Canada and the United States. . . . more

Dismal Economy Propels Auto Parts Retailers: Is Pep Boys Last to Follow?

A bad economy is good for the retail auto parts sector. Consumers are not buying new cars, but instead are attempting to extend the lives of their old cars. This necessitates more maintenance, as vehicle "wear and tear" starts to take its toll.

The sector's main players are running on all eight cylinders. Both AutoZone (AZO) and O'Reilly Automotive (ORLY) are selling at all time highs, while Advance Auto Parts (AAP) is about 17% from its high- quite an accomplishment, considering the fact that the overall markets have lost nearly 50% this past year. In other words, this group's relative strength is off the charts. The only one late to the party is Pep Boys (PBY), and it is so late, it has already "turned out the lights", as its shares are trading near historical lows. Talk about one extreme to another! . . . more

Friday, February 20, 2009

Red Robin Cuts Growth in Half

Red Robin Gourmet Burgers is slowing growth for 2009, executives said at the company’s fourth quarter conference call.

During fiscal year 2009, the Company now expects to open 13 to 14 new company-owned units, and franchisees are expected to open seven to eight new restaurants. Last year, 31 company-owned and 10 franchised locations were opened. Plans for 2010 have yet to be determined, but consolidation and acquisition opportunities in the coming year could range from conversions of former restaurants and shopping center end-caps to freestanding restaurants. . . . more

Thursday, February 19, 2009

Whole Foods’ Q1 Comps, Profits Slide

AUSTIN, Texas — Comparable-store sales fell 4% at Whole Foods Market here in the first quarter, the company said yesterday. Net income declined 17.4%, to $32.3 million, on flat sales overall of about $2.47 billion.

Excluding $15.6 million in sales from 13 Wild Oats stores that have been closed in the past year, sales were up about 1%. Identical-store sales, excluding eight relocated stores and three expansions, declined 4.9%. . . . more

Target traffic talk turns to Route 1

SEABROOK, NH — The developer wanting to build a 450,000-square-foot shopping center in Seabrook just beyond the hectic intersection of Routes 1 and 107 would spend almost $8 million to widen local roadways — including the Route 107 bridge over Interstate 95 — to accommodate the traffic the mall would bring to town.

But it's what the proposal by Developers Diversified Realty does not include that is drawing the attention of safety officials, Planning Board members and residents.

The town wants Route 1 southbound widened from the mall's entrance just north of Route 107 down to Railroad Avenue, not far from shopping destinations like Lowes, Wal-Mart, Kohl's, Home Depot, two grocery stores and dozens of other businesses.. . . more

Shoppers departing department stores - and may not be back

Pity the department store.

The recession is sucking sales out the door of the big two- and three-level mall anchors and from their newer, more productive off-mall locations.

new mantra for one of America's oldest retail categories: When the economy rebounds, everything will go back to the way it was.

But will it? Analysts who study department stores say the downturn may prove too severe for some companies. There are 10 left with sales of at least $3 billion: luxury sellers Neiman Marcus and Saks; upscale Nordstrom; midtier Macy's and Dillard's; value chains J.C. Penney, Kohl's and Sears; and regional chains Bon-Ton and Belk. . . . more

GameStop expects record sales

Video game retailer GameStop Corp. said Thursday it’s projecting earnings per share for the fourth quarter of 2008 to hit the high end of prior estimations due to a boost in sales.

Grapevine-based GameStop (NYSE: GME) expects earnings per share in the range of $1.33 to $1.34, which is precisely 17 percent to 18 percent higher than previously forecast. GameStop says for the first time in the company’s history, quarterly sales for the final quarter of 2008 exceeded $3 billion, with sales hitting $3.5 billion, up 22 percent over the same quarter a year prior.

GameStop is now projecting 2008 year-end earnings to fall in the range of $2.39 to $2.40 per share, 33 percent higher than expected.

Full-year sales jumped 24 percent to $8.8 billion, up from $7.1 billion in 2007.. . . more

S&K receives permission to close 30 stores, including at Regency Square

S&K Famous Brands Inc. received bankruptcy court permission yesterday to begin looking for a liquidator to close an additional 30 stores, including the store at Regency Square and two others in Virginia. The Henrico County-based menswear retailer filed for bankruptcy protection on Feb. 9. The chain currently operates 136 stores and has closed 78 stores in the past year. S&K already has struck a deal with Gordon Brothers Retail Partners LLC to close the stores, according to court papers. . . . more

Big Discount Chains Profit in Recession


Costco and BJ's Turn Healthy Profits as Other Retailers Feel the Pain

Warehouse clubs Costco and BJ's reported substantially higher profits on Wednesday, with both benefiting as cost-conscious shoppers worried about the economy shunned department stores and specialty retailers in favor of lower-priced alternatives.

BJ's even said it welcomes continuing modest inflation, hoping more shoppers will view warehouse clubs as safe havens from higher food and gas prices.

"We're embracing
inflation in this particular organization," BJ's Chairman and Chief Executive Zarkin told analysts in a conference call.. . . more

Wednesday, February 18, 2009

Forever 21 to Open Large Prototype Store in California

WWD says Forever 21 plans to open an extra-large prototype store in California this year. The 80,000-square-foot store is a space Forever 21 acquired from Mervyns and will be double its average store size.

The privately held retailer aims to open an estimated 80,000-square-foot store at Los Cerritos Center, a Macerich-owned mall near Los Angeles, in late 2009. The space was acquired as a result of the liquidation of Hayward, Calif.-based retailer Mervyns. . . . more

7-Eleven to Expand in North America

TOKYO -- Seven-Eleven Japan Co. plans to expand the number of 7-Eleven stores throughout North America by utilizing some successful formulas that have worked in Japan, the Japan Times reported.

One such strategy is increasing store density in profitable areas by more effectively luring in customers with new products, such as more fresh-food varieties, the report stated.

"We've known that fresh food is an opportunity, but what we really learned from Japan is how to operationalize that and make it efficient," Darren Rebelez, the U.S. subsidiary's chief operating officer and senior vice president, told the paper at a recent launch of its green commissary and combined distribution center in Bohemia, N.Y. . . . more

Tight money slows projects

Developers have hard time securing needed financing

WESTBORO — Developer Francis P. Zarette has what he considers a great project: Westboro Village, a “transit-oriented” community of 300 condominiums and apartments on 35 acres near the Westboro train station. The project has been approved, and Mr. Zarette says there’s a pent-up demand.

But Mr. Zarette, like many developers nowadays, cannot secure financing to make his project a reality.

“We’re in a holding pattern,” he said. “We could break ground tomorrow, but we can’t get financing.” . . . more

Pershing Square ups stake in Target

PHILADELPHIA (Reuters) - Hedge fund Pershing Square Capital LP said on Tuesday it raised its stake in discount retailer Target Corp (TGT.N) to 3.56 percent, up from 2.60 percent, while cutting its investments in companies ranging from Sears Holdings Corp (SHLD.O) to Dr Pepper Snapple Group.

Pershing Square, headed by William Ackman, said it owns 26.8 million shares of Target, up from 19.6 million as of December 31, according to a filing with the U.S. Securities and Exchange Commission.

Last week, Ackman said his total holdings in Target, across all his funds, had increased to 9.7 percent of the company, up from 9.5 percent in mid-August.. . . more

Six Retailers That Are Thriving

Some are big enough, some are benefiting from their rivals' demise, and some offer must-have items.

Suppose a nosy journalist snooped through your closet today. Naturally, she'd find the latest spring fashions -- pulled straight from the racks at Barneys and Neiman Marcus -- displayed on your hangers, right?

If you're anything like most of us, probably not. Retail sales during the Christmas shopping season slipped 3% from the same period in 2007, and the National Retail Federation projects a 0.5% decline in sales for all of 2009. Linens 'n Things, Circuit City, KB Toys and Sharper Image are just a few of the household names that have already succumbed to the hostile climate. Stalwarts such as Home Depot and Macy's are laying off thousands of employees.

But a small number of companies are quietly thriving. . . . more

Retail REIT woes may mean buying opportunity for some

When the going gets tough, people stop shopping — a problem that has triggered a huge selloff among companies that own malls and shopping centers.

However, some industry analysts say that certain names in the retail real estate investment trust world face less risk and could actually benefit from the turmoil in the next year or two.

"The entire industry has been undervalued," said Darin Buchalter, a managing director and head of real estate in the San Francisco office of Navigant Consulting Inc. of Chicago. Indeed, retail REITs posted negative total returns of 48.4% on average last year and are off about another 22% so far in 2009, according to the National Association of Real Estate Investment Trusts in Washington.

But not all retail REITs are created equal. . . . more

General Growth misses payments

General Growth Properties Inc., the U.S. shopping mall owner with $900 million in loans due yesterday, remains in talks with its lenders, a spokesman said.

"We continue to talk to all of our lenders, and as soon as we have something to announce, we will do so," Tim Goebel, a spokesman for the Chicago-based company, said yesterday in an interview.

General Growth had extended until yesterday payment of a $650 million loan on the Fashion Show Mall and a $250 million loan on the Shoppes at the Palazzo, both in Las Vegas. The loans originally were due in November, and both properties have been up for sale since October. General Growth has said it might have to file for bankruptcy protection if it's unable to refinance debt.. . . more

Tuesday, February 17, 2009

The Finish Line Tests New Urban Concept

The Finish Line Inc. plans to test a new concept called Decibel that eventually could replace its Man Alive chain, according to the Indianapolis Business Journal. The retailer is rebranding four Man Alive stores for an April launch and is remerchandising product at four other stores while keeping the Man Alive name.

Anchored by brand-name jeans and edgy T-shirts, Decibel will offer street fashion aimed at a broader audience than Man Alive. The stores will carry some Decibel-branded basics, but most will come from name-brand designers. According to the Indiana Business Journal, renderings of the concept show "industrial-style shelving stocked with dozens of types of jeans including brands such as Levi's, Antik and Silver, along with patterned button-ups and fashion tees." . . . more

Borders extends Paperchase transaction to April

Bookseller Borders Group Inc. said Friday that a financing deal related to the potential sale of its stationery business to an activist hedge fund has received a further extension.

The expiration date of Borders' option to "put" Paperchase Products Ltd. to Pershing Square Capital Management LP for $65 million was originally scheduled for Jan. 15. A put option is the opportunity to sell a certain number of shares at a certain price and date in exchange for an upfront fee.

The option, which was first extended to Feb. 16 in December, is now scheduled to expire on April 15.. . . more

Wegmans close to deal for second grocery store in Maryland

Mega-grocer Wegmans Food Markets Inc. is close to signing a lease to open a store Abingdon, which could employ nearly 600 workers.

James M. Martin, president of Edgewood-based Ward Properties, said Monday he hopes to have a deal with Wegmans finalized the shortly for as much as 130,000 square feet of space of at the Boulevard at Box Hill. Typically, each Wegmans location employs 600, Martin said. The store would open as early as 2011, he said.

The development is part of a larger scale 140-acre office park Ward Properties is developing near Route 24, just north of Interstate 95.. . . more

A Few Retailers Look for Growth in '09

Who’s still opening retail locations in this difficult economy? Once again following Apple’s example, Microsoft Corp., for one, has decided to open a chain of retail locations.

Interestingly, the software behemoth has hired an exec from Wal-Mart, the retail behemoth, David Porter, to oversee its entrance into the retail biz. How will the Microsoft stores be different? Details are few so far, but instead of genius bars, there will be guru zones (or something) in the store. Instead of an Apple logo and ultra-stylish decor, there will be... a pomegranate and cinder blocks? Time will tell.

Buffalo Wild Wings is also planning expansion in 2009, a rarity in the chain-restaurant world these days. Last year, the company opened 67 restaurants, bringing the total to 567 in 39 states. During 2009, the company is planning on increasing its number of restaurants by about 15 percent, or maybe about 85 locations. . . . more

Ikea to open 36th U.S. store in Charlotte, N.C.

CHARLOTTE, N.C. — Swedish retailing giant Ikea is set to open its 36th U.S. store here this week as the company continues its aggressive expansion into the Southeast.

The 356,000-square-foot behemoth, which includes 49 room settings and three model home interiors, will be the Top 100 retailer's fifth store in the fast-growing region. And a sixth Southeastern store is scheduled to open this summer in Tampa, Fla.

During a tour of the store for members of the news media, Ikea officials said they remain optimistic the store will do well despite a recession that has hammered other home furnishings retailers throughout North America.

"We started planning for this store three years ago, and we're sticking with our expansion plans regardless of what's going on with the rest of the economy," said Joseph Roth, director of public affairs for Ikea North America. . . . more

Alexandria pitches new plan for Landmark Mall

Outside, there is a jumble of elevated ramps and confusing signs. Inside Alexandria’s Landmark Mall, Macy’s is pretty busy for a weekday lunch hour. A man strides toward the exit, saying angrily, “I’m going to Ballston.” The woman trailing behind protests, “These are nice!”

That is about as good as it gets at the mall. In another section, empty display windows are blocked with curtains next to the dollar store and the Lane Bryant. The Lord & Taylor has walls, tables and cases bare of merchandise.

Five years ago, owner General Growth Properties Inc. proposed tearing down the mall, built in 1965, and replacing it with a town center. But massive mergers — involving General Growth and Rouse Co., Macy’s and Hecht’s, and Sears and Kmart — slowed the progress. . . . more

Sunday, February 15, 2009

Amid recession, a vein of optimism

Some firms finding ways to capitalize

In times of misfortune, they see fortunes to be made.

With creative financing, sharp elbows, and a hefty dose of optimism, some area businesses are aiming to capitalize on these terrible times to expand their enterprises or start up new ones, seizing the day or preparing for the upturn they know will one day come.

For many New England merchants and entrepreneurs, simply finding a way to survive is the order of the day, as sluggish consumer spending and frozen lending markets have made business growth seem out of the question, at least for now. But then there are those like Bruegger's Bagels and auto magnate Herb Chambers, who are ramping up just as everyone else seems to be scaling back.. . . more

Friday, February 13, 2009

RadioShack quietly opens new concept store in Dallas area

RadioShack Corp. has quietly opened a new concept store in the Dallas area.

It’s called Point Mobl and it sells portable devises in an upscale decor of white fixtures and clean glass with no sign of the Fort Worth-based consumer electronics company.

The stores stock each mobile category from compact laptops and MP3 players to smart phones and GPS systems, in more depth than a RadioShack, which sells everything from hearing aid batteries to remote control cars. . . . more

Ready, set, cut prices

Tween Brands hopes Justice scores with strapped shoppers

How do you tell customers that you've changed from a pricey brand to a more affordable one?

In this economy, you have a big sale and prove it.

Tween Brands' Justice stores will kick off a five-day promotion today highlighting their takeover of the Limited Too chain
by discounting the entire inventory of girls' apparel and accessories by 40 percent -- that's off prices that already were up to a third lower than Limited Too's had been.. . . more

Best Buy Taking Magnolia In-House, To Shut 7 Stores

Kent, Wash. — Best Buy has assumed direct control over its high-end Magnolia Audio Video specialty chain, and will combine it with its in-store Magnolia shops under a new management structure at its corporate headquarters in Richfield, Minn.

As a result of the decision, Magnolia’s headquarters and distribution center here are being shut down, along with seven of its 13 stores.

The announcement was made internally this morning, although the status of Magnolia’s present management team was not disclosed.. . . more

Cedar Buys Two Centers in $72M JV

A joint venture of locally based Cedar Shopping Centers, and London-based Prime Commercial Properties has bought two supermarket-anchored shopping centers for a total of $72.5 million. The two centers are located in Connecticut and Maryland and total approximately 523,000 square feet of gross leasable area.
The Connecticut property, New London Mall in New London, CT, was owned by Centro Properties since 2005. Published reports say the $40.7 million selling price on the 259,000-square-foot property was $1.3 million less than Centro--also headquartered in Port Washington--had paid. Cedar also owns the nearby Groton Shopping Center.

Cedar and PCP purchased the 264,000-square-foot Maryland property, San Souci Plaza in California, MD--from WP Realty Co.--according to a release from WP. Cedar and WP, based in Bryn Mawr, PA, have a history of successful transactions together, including previous sales from WP to Cedar of Jordan Lane Shopping Center in Wethersfield, CT; Fieldstone Marketplace in New Bedford, MA; and a six-property portfolio, plus a current joint venture at Columbia Mall in Bloomsburg, PA. . . . more

Cheesecake Holds on to Leases, Cuts Growth

While many retailers seem to be storming their landlords’ office to renegotiate leases, the Cheesecake Factory is holding to its deals, even as the company cuts expansion, executives said at the company’s fourth quarter conference call.

Despite the prospect of many co-tenants closing multiple stores, the chain has not been doing mass renegotiations of their deals, said David Overton, chairman and chief executive officer. The company is a destination in itself, located in some of the top malls in the country, which are less likely to be affected by closures. . . . more

Microsoft opening retail stores

After years of rumors, Microsoft today confirmed that it's delving into retail. The company is hiring an executive "to create a better PC and Microsoft retail purchase experience for consumers worldwide through the development and opening of the company's own retail stores," according to this news release.

To lead the effort, Microsoft hired a retail executive with 25 years of experience at Wal-Mart. David Porter, most recently head of worldwide product distribution at DreamWorks Animation, will report to Chief Operating Officer Kevin Turner, who rose from checkout clerk to chief executive of Wal-Mart's Sam's Club division. Turner joined Microsoft in September 2005. . . . more

Thursday, February 12, 2009

Mansfield Marketplace Finances $8M

MANSFIELD, MA-Mansfield Marketplace, the 23,840-square-foot-retail center is grabbing $8 million of construction and permanent financing from a regionally based bank. The two buildings--being developed by Concord, MA-based Hecht Development just off Route 140. Fantini & Gorga originated and placed the loan, but would not comment on terms of the lease. . . . more

Wal-Mart to Launch Simmons Clothing Line

Hip-hop entrepreneur Russell Simmons' American Classics line of men's clothing is set to roll out. But with consumers spending less, Wal-Mart keeps mum

As most apparel retailers announce job cuts and store closures because of sluggish sales, it is a precarious time for any of them to launch a new brand. But on Feb. 15 Wal-Mart Stores (WMT) will roll out a new line of men's clothing designed by hip-hop entrepreneur Russell Simmons in 350 stores, about 10% of its U.S. outlets, and on its Web site. The launch will come less than a week after the world's largest retailer announced that it will move buyers in the apparel division from its Bentonville (Ark.) headquarters to New York to increase the focus on fashion.

For a company whose financial performance has trounced rivals such as Target (TGT) in recent months by focusing on lower-price essentials rather than more expensive discretionary items, the move seems surprising, especially as Wal-Mart flopped famously in its previous efforts to sell more fashionable, pricier clothing. . . . more

Retail sales rise 1% for first increase in seven months

Most sectors see healthy gain, stand in contrast to private-sector reports

WASHINGTON (MarketWatch) -- U.S. retailers rang up their largest increase in sales in more than a year during January, rebounding strongly after a six-month string of sharp declines, the Commerce Department reported Thursday.

Retail sales rose 1% on a seasonally adjusted basis last month, marking the first increase since June and the largest percentage increase since November 2007. The gain was unexpected, with economists surveyed by MarketWatch looking for a decline of 0.4%. . . . more

Starbucks Begins Announced Layoffs

Starbucks Corp. on Wednesday told about 1,370 employees that their jobs will be cut as the chain sheds costs by closing stores and laying off employees. About 500 non-store employees in the United States and Canada, including 300 in the company's Seattle headquarters, and 870 assistant store managers learned their jobs were disappearing, the company said.

Starbucks said it is offering some of the affected employees other jobs. Those who leave Starbucks will be offered severance pay, benefits and help finding another job.. . . more

P.F. Chang’s Slows Down New Openings

With comp-store sales and profits declining, P.F. Chang's China Bistro is reducing its planned openings for 2009 to focus on improving its existing units, executives said at the company’s fourth quarter conference call.

The company currently expects to open four to six new Bistro restaurants and two to four new Pei Wei restaurants during fiscal 2009. Last year, the company opened 17 Bistros and no Pei Wei units, while closing 10 of the latter. No store closures are planned for either Bistros or Pei Wei. The result, he said, is that unit growth will be on the low end for 2009 and into 2010. The company also is working on renegotiating terms with developers. . . . more

REI cuts 61 full-time jobs as profit plunges

Kent-based outdoor gear and apparel retailer REI said today it is eliminating 61 full-time jobs, mostly at its headquarters and Sumner distribution center.

REI also said it's cutting an unspecified number of part-time hourly-wage jobs at about half of its 105 stores, as well as the Sumner facility.

The co-op reported a 65 percent drop in its 2008 profit, describing November and December as "very challenging." Spokeswoman Megan Behrbaum noted that stores marked down prices more than planned to attract bargain-driven shoppers during the crucial holiday shopping period.. . . more

NRDC feeling buyers' remorse for shopping spree?

PHILADELPHIA, Feb 11 (Reuters) - Private equity firm NRDC Equity Partners may be suffering from the same buyers' remorse as many U.S. consumers who are saddled with debt after over-shopping during the peak spending days.

In the leveraged buyout boom before the U.S. recession, NRDC acquired luxury and department store retailers, as well as a home goods business. Now, two of those businesses are in bankruptcy and it has merged its department store businesses and laid off workers to cut costs.

"You have a company that has wonderful assets but is fighting for survival," said Walter Loeb of retail consulting firm Loeb Associates.. . . more

Westwood Station projects comes to halt

The developers of the 150-acre Westwood Station, one of the largest mixed-use projects in the state, are suspending work on the site as they struggle to secure a construction loan.

The developer of the 4.5 million-square-foot project, Cabot, Cabot & Forbes of New England Inc., said the first phase, about 1.7 million square feet, including 1.1 million square feet of retail, was scheduled to break ground at the end of the second quarter. The groundbreaking has been pushed back about six months until September. However, if September rolls around and the developers don’t have a loan, the project doesn’t move ahead. . . . more

Wednesday, February 11, 2009

Eastern shrinks despite MassBank buy

When Eastern Bank agreed to buy MassBank Corp. in early 2008, Chief Executive Richard Holbrook envisioned a combined operation with $7.6 billion in assets. But the largest community bank in Massachusetts didn’t get bigger in 2008. It actually shrunk.

Even after completing the deal for MassBank and its $821 million in assets, Eastern’s year-end assets were $6.55 billion, compared with $6.8 billion in 2007. That’s far short of the $7.6 billion Holbrook expected in March when the MassBank deal was announced. Meanwhile, full-year net income fell 91 percent to $5.8 million. The bank’s balance of net loans was $3.87 billion at the end of December, down from $3.98 billion a year earlier. And losses on investments totaled $50.4 million as Eastern’s bets on the stock market took a beating like everyone else’s.

To be sure, Eastern Bank has been a prudent lender. It has plenty of capital ($654.4 million) and its pool of problem loans is small. The bank also pared back some lending in riskier segments and didn’t chase after expensive deposits with full-page newspaper ads touting sky-high CD rates.
“We’re not going to match every other competitor’s offer to hold onto deposits,” Eastern Bank spokesman Joe Bartolotta said. “We have an obligation to run a profitable operation.”. . . more

Bernanke vows clarity in financial crisis fight

Fed chief says programs to bust through credit clogs showing promise

WASHINGTON - Federal Reserve Chairman Ben Bernanke told Congress Tuesday that a flurry of radical programs aimed at busting through debilitating credit clogs are showing promise and pledged to keep Americans better informed about efforts to battle the worst financial crisis since the 1930s.

While acknowledging that measuring the impact of the Fed’s programs is complicated because many factors affect market conditions, Bernanke said the central bank was encouraged by feedback from Wall Street and others. . . . more

Retailers group says there's hope on the horizon

UPPER MERION — The International Council of Shopping Centers thinks there is a glimmer of hope when it comes to consumer spending and the economy, but, of course, retailers will need patience.

That was the message Steven H. Gartner gave to ICSC members at the the group's 2009 Pennsylvania Economic Forecast event, held at the Court of King of Prussia on Monday.

Gartner, the first speaker, is president of Metro Commercial Real Estate in Conshohocken, as well as director of the ICSC's Pennsylvania, South Jersey and Delaware region.. . . more

Walmart #1 for HBA and Walgreens #1 for Prescriptions

COLUMBUS, OH -- (MARKET WIRE) – 2/10/09 – A third of consumers shop Walmart most often for their health & beauty aid purchases, followed by Target (8.1%) and CVS (7.8%), according to the January Retail Ratings Report from BIGresearch (http://www.bigresearch.com). Although Walgreens was edged out of the top 3 in January for HBA, they top the list in the Prescription Drug category.

Walmart towers over the competition in the Health & Beauty sector, with 33.3% of the overall share. The discount giant’s share of preference increased from 29.7% in January 2008, resulting in a Consumer Equity Index™ (CEI)* of 111.81. Second place Target’s consumer share increased, with a CEI of 127.14, while third place CVS’ CEI of 121.24 shows positive growth for the corner druggist as well. (*CEI measures growth in share of customer preference year-over-year. An index of 100 is flat, while an index of 105 indicates 5% growth.). . . more

Whole Foods CEO Says He Expects Settlement With FTC In Merger Deal

NEW HAVEN — - Eighteen months after buying former rival Wild Oats Markets, the founder and chief executive of Whole Foods Market Inc. is still fighting federal regulators to make the merger stick. But in a visit to Yale University on Tuesday, he said he anticipates a settlement soon.

"Hopefully, there'll be an announcement in the next couple of weeks," said John Mackey, the Whole Foods CEO.

The Federal Trade Commission tried, but failed, to prevent the merger, saying it would create a monopoly that would squelch competition and hurt consumers. The agency has been trying to undo the deal ever since and has said it might try to force Whole Foods to divest some former Wild Oats properties, restore the Wild Oats brand name or install independent managers. . . . more

Dollar General to Double Store Openings

GOODLETTSVILLE, Tenn. — Dollar General here said Tuesday that it would open 450 new stores this fiscal year, more than doubling last year’s total of 207 new store openings. The company will also remodel or relocate approximately 400 stores this year, about the same as in 2008.

The company announced its plans while detailing revenues for the quarter and fiscal year that ended Jan. 30. Quarterly sales of $2.85 billion increased by11.2% from the same period last year, while comparable-store sales improved by 9.4% as strategic operating initiatives throughout the year increased customer traffic and average ticket, officials said. . . . more

Founding family eyes return of Mervyn's

(Reuters) - The founding family of Mervyn's LLC agreed to purchase the defunct retailer's name and all its Internet-related intellectual properties, the Wall Street Journal said.

John Morris, the son of the department store chain's founder, Mervin Morris, along with his two brothers Jeff and Jim, agreed to the purchase, in a sale that closed on Tuesday afternoon, the paper said.

"It's great to have it back in our
family after 31 years," the paper quoted John Morris as saying.. . . more

Kroger introduces new kind of store

THOMPSON'S STATION —Kroger Marketplace opens today at 4726 Trader's Way in Thompson's Station, replacing the old Campbell Station Kroger and bringing a new grocery concept to Middle Tennessee.

The 125,000-square-foot store has the standard Kroger features of a pharmacy, fuel center, salad bar, floral shop, cheese shop and fresh sushi.

But it also features furniture, home d├ęcor, bed and bath products, kitchen supplies, office and school supplies and a toy department.. . . more