Thursday, April 30, 2009

Wal-Mart gives its Supermercado concept a tryout

When restaurant worker Jorge Castillo goes grocery shopping, he typically isn’t greeted by dozens of food and beverage samples and a mariachi belting out Spanish-language ballads.

But during Wednesday’s opening of the Supermercado de Walmart, a party welcomed shoppers.

“It’s something new and different,” said Castillo, who traveled to the Spring Branch-area store from his north Houston home after seeing its advertisements.. . . more

Jones Apparel to Close 225 Stores

Jones Apparel Group on Wednesday reported a year-over-year decline in Q1 revenues of 8.6% to $891 million, and announced that it plans to close 225 stores in 2009 and 2010. The company did not identify which regions or retail brands would see closings.

“As a matter of course, the company continually evaluates its portfolio of stores, and now is an opportune time to take action as this plan can be adopted with the use of minimal cash expenditures,” according to a release. Jones Apparel expects to save $3 million this year, $14 million next year and $20 million in 2011 through closing unprofitable locations. . . . more

Wednesday, April 29, 2009

Falling Property Sales Help Sink GDP

Commercial property sales by dollar volume slumped 50% in the first quarter from the fourth quarter of 2008 as gross domestic product (GDP) contracted 6.1%. That’s according to a preliminary estimate by New York-based real estate research firm Reis. Analysts had expected GDP to contract 4.6% on an annualized basis.

According to the U.S. Commerce Department, investment in nonresidential structures — primarily commercial real estate investment — decreased 44.2% on a quarter-over-quarter basis.

“There are buildings transacting, but the drop-off is quite significant,” says Victor Calanog, chief economist for Reis. “It is the lowest volume on record since Reis began tracking transactions in 2003.” . . . more

Rosetta Stone Opens First Experience Retail Store

Leading Language-Learning Company Also Opens New Kiosks Nationwide

Rosetta Stone(R) Inc. (NYSE:RST), a leading provider of technology-based language learning solutions, announced today it has opened its first retail outlet designed to provide a more complete experience of Rosetta Stone. Located at The Mall at Short Hills, in Short Hills, NJ, the new store will allow consumers to fully experience the award-winning Rosetta Stone Dynamic Immersion(R) method that unlocks the natural language-learning ability in everyone. . . . more

Walgreen to buy 34 New Jersey stores

A U.S. bankruptcy judge said Walgreen Co. could purchase 34 Drug Fair stores in New Jersey for a price of $55.95 million. . . . more

ING favors U.S. real-estate trusts despite crisis

SYDNEY, April 29 (Reuters) - U.S. real-estate investment trusts (REITs) enjoy strong investor support, despite the slump in U.S. property markets, because they have moved aggressively to repair their balance sheets, ING Real Estate said on Wednesday.

The U.S. REITs market is among the world's most favourable for institutional investors, able to raise equity at discounts of only 7-8 percent on current share prices, compared with 40-50 percent discounts in Australia, the UK and Singapore, it said. . . . more

Forest City Completes Sale of New York Retail Center

CLEVELAND, Ohio, April 28 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA) (NYSE: FCEB) today announced the sale by its subsidiary of The Shops at Grand Avenue, a retail center located in the Borough of Queens. The property was purchased by an affiliate of AEW Capital Management, LP, for a selling price of $33.5 million, representing a cap rate of approximately 7.75 percent on in-place income. The transaction, which closed April 16, 2009, generated proceeds of approximately $9.4 million, net of partner tax indemnification.

"We have always been an active seller of real estate from our portfolio," said Charles A. Ratner, Forest City president and chief executive officer. "Today, selective sales, joint ventures and other structures are part of our strategy to generate liquidity in response to current economic and financial-market conditions. As this transaction demonstrates, our high-quality properties in strong markets continue to attract buyer interest, even in a down market.". . . more

Office Depot Finished With Mass Closures

BOCA RATON, FL-Office Depot is done with major store closures in the US, executives said at the company’s first-quarter conference call. During the quarter, the company closed 107 units and relocated one store.

But mass closings have been completed, said. Office Depot will open 12 or fewer stores in North America this year, said Chuck Rubin, president of North American retail.

“We’re making progress on rent concessions as we rein in our occupancy costs,” Rubin said. . . . more

Starbucks to broaden appeal by expanding lower-priced, milder-tasting Seattle's Best Coffee

NEW YORK (AP) — Starbucks Corp. is hoping its Seattle's Best Coffee chain will be its growth engine during the recession.

Even as Starbucks shutters hundreds of namesake locations, cuts jobs and shaves other costs, it is seeking franchisees to open new cafes and kiosks of Seattle's Best Coffee nationwide.Since Starbucks took over the chain in 2003, most new Seattle's Best Coffee cafes have opened inside Borders bookstores and kept a relatively low profile.

Many consumers don't know there's a connection: Seattle's Best Coffee's logo is red, Starbucks' is green, and there is no mention of Starbucks inside Seattle's Best Coffee stores.. . . more

Newcomers Challenge Office-Supply Stalwarts

In the grinding recession, companies are finding ways to save even on the cost of the lowly office pen. And that has created an opening for discounters to steal business from the office-supply industry's big three.

Online discounters and retail giants such as Wal-Mart Stores Inc. and Costco Wholesale Corp. are cranking up their efforts to woo customers of the big office superstore chains -- Staples Inc., Office Depot Inc., and OfficeMax Inc. The result: a wave of price-competition that is benefiting lower-cost vendors and encouraging companies to switch suppliers. Wal-Mart's Sam's Club, a warehouse-store chain, last month began sending employees to small businesses to compare office-supplies prices, and plans to provide cost comparisons for 100,000 businesses by late May.. . . more

NH House OKs budget that could force 29 liquor stores to close

CONCORD – The House-approved budget for the state Liquor Commission would force the state to close 29 liquor stores, jeopardizing up to $18 million a year in net profit, commission Chairman Mark Bodi told the Senate Ways and Means Committee on Tuesday.

The commission had been asking the Legislature for permission to close 16 profitable stores.. . . more

Massive REIT Stock Offerings May Signal Future Deals

A recent spate of stock offerings by some of the retail sector’s stronger REITs points to a possible pick-up in acquisitions going forward, analysts say. Since March 19, more than a quarter of the sector’s 17 REITs conducted stock offerings. Most of those proceeds, which together with debt offerings might exceed $2.6 billion in total, will go towards paying down outstanding balances on revolving lines of credit. But that doesn't explain all the cash REITs have raised. Some have said funds may be used for "general corporate purposes"—REIT-speak for possible acquisitions, joint venture funding, developments, redevelopments and debt payments. . . . more

Tuesday, April 28, 2009

Consumer confidence soars in April

NEW YORK—Hopeful signs that the worst may be over for the economy boosted Americans' moods in April, sending a closely watched barometer of sentiment to the highest level since November.

The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose more than 12 points to 39.2, up from a revised 26.9 in March. The reading marks the highest level since November's 44.7 and well surpasses economists' expectations for 29.5.. . . more

State Law Targets 'Minimum Pricing'

In a move that could lead to lower prices for consumers across the country, Maryland has passed a law that prohibits manufacturers from requiring retailers to charge minimum prices for their goods.

The law, which takes effect Oct. 1, takes aim at agreements that many manufacturers have been forcing on retailers, requiring them to charge minimum prices on certain products. The practice has surged since a controversial 2007 U.S. Supreme Court ruling that no longer makes such agreements automatically illegal under federal antitrust law.. . . more

Filene’s Basement Said to Prepare for Bankruptcy

April 27 (Bloomberg) -- Filene’s Basement, the century-old clothing chain, may seek bankruptcy protection this week, according to two people with knowledge of the plan.

A filing may come as early as tomorrow, said the people, who declined to be identified because the information isn’t public. There are several parties interested in buying assets out of bankruptcy, one person said. . . . more

15 upstate NY shopping malls part of $1.9B US sale

BUFFALO, N.Y. — More than a dozen upstate New York shopping malls are being put up for sale by a real estate investment trust with properties across the nation.

The 14 malls in western New York and one in New Hartford, near Utica, are among the 52 retail properties being sold by a joint venture between Developers Diversified Realty Corp. and Macquarie Group Ltd., Australia's largest investment bank.

According to a statement from the real estate brokerage handling the sale, Macquarie DDR U.S. Trust's offering includes 52 shopping malls in 20 states.. . . more

Rite Aid debt rating downgraded by Fitch

Rite Aid lags its two largest competitors in prescription sales per store and other areas, Fitch Ratings said Monday as it changed the company's debt outlook to negative, from stable.

Camp Hill-based Rite Aid had $6 billion in debt as of Feb. 28, the ratings agency said. The chain generated $26 billion in revenue last year, with 4,901 stores.

While ranking in the top two or three drug stores in most of its markets, Rite Aid's prescriptions per store are flat at an average 1,150 filled per week, versus Walgreen at 1,835 and CVS Carmark at 1,630, Fitch said.. . . more

Office Depot posts surprise profit on cost cuts

BANGALORE (Reuters) - Office Depot Inc (ODP.N) reported a surprise first-quarter operating profit on Tuesday as cost cuts offset a sharp decline in sales, and the No. 2 U.S. office supplies retailer's shares rose more than 7 percent.

The company, whose peers include OfficeMax Inc (OMX.N) and industry leader Staples Inc (SPLS.O), has been closing stores and laying off workers in a bid to slash costs in the recession.. . . more

Monday, April 27, 2009

Empty boxes

Mounting number of vacancies leave huge holes to fill in the retail landscape

Drive down any main shopping drag, and odds are you will encounter an increasingly common symbol of the historic retail downturn: the vacant big-box store.

Towns across the country are littered with thousands of these empty giants that not long ago signified the future of retail. These faceless hulks aren't abandoned in forgotten outposts but are commonly in prime spots in busy strip malls and near thriving communities.

"The question is, who is going to replace the big-box player?" said Lois Huff, senior vice president at Retail Forward, a Columbus, Ohio, retail market research firm. "It's very difficult. They may just sit empty for a while.". . . more

Developers Diversified Realty Corp. reported better-than-expected financial results

Developers Diversified Realty Corp. reported better-than-expected financial results, sending the shopping center owner's share price up 11.4 percent Friday.

The real estate investment trust, based in Beachwood, said its first-quarter profit jumped to $76.8 million, or 59 cents a share, driven by the company's considerable gains on repurchases of its senior notes. That compares with a profit of $29.6 million, or 25 cents a share, a year before. Funds from operations, a key industry performance measure, rose to $1.08 a share, from 80 cents during the first quarter of last year. . . . more

Mall owner's troubles grew out of leverage

PROVIDENCE, R.I. — The financially troubled owner of Providence Place mall borrowed nearly $400 million on the property shortly after it took control of the retail center in 2004.

The borrowing, on a shopping center that had changed hands only months before for $510 million, is symptomatic of the problems General Growth Properties Inc. created for itself as it amassed a portfolio of more than 200 properties in 44 states.. . . more

Haggling over traffic continues in Seabrook, NH

SEABROOK, NH-The haggling over traffic continued at the Planning Board's review of the 500,000-square-foot shopping center Developers Diversified Reality wants to locate behind Provident Bank on the old Venture Corporation site.

The town's traffic engineer and one hired by Demoulas object to the road improvements DDR proposes to add to the area surrounding the Route1/107 intersection to mitigate the 1,700 to 2,200 more cars per hour expected to be drawn to the shopping center. Both engineers say the improvements aren't enough, and believe DDR must pay to widen Route 1 to accommodate the traffic, or the mall's traffic will gridlock the area.. . . more

Economy Hitting Home For Well-Known Outdoor Outfitter

Outdoors outfitter L.L. Bean has notified employees that it plans to lay off 200 to 240 members of its Maine-based work force because of lagging sales.

In a
letter Friday to its 5,400 full- and part-time workers, the Freeport based retailer said voluntary retirement incentives announced in February have helped reduce the number of layoffs but were not sufficient to eliminate the need for job cuts. . . . more

Jean Coutu's losses deepen as Rite Aid struggles

LONGUEUIL, QUE. – Jean Coutu Group Inc.'s quarterly and full-year losses more than doubled versus year-earlier results, due to a weak financial performance by U.S.-based Rite Aid Corp.

Jean Coutu (TSX: PJC.A) said the financial results were dragged down by losses at Rite Aid (NYSE: RAD), in which the company holds a 32 per cent stake. Its share of loss in the U.S. drugstore operator came to $768.8 million for the quarter, compared to $332.1 million the year before.. . . more

Sunday, April 26, 2009

Developer bill may move stalled building projects along

Developers and builders trying to cope with the recession got a bit of a helping hand from the New Hampshire Legislature.

Those whose permitted plans have been put on hold because of lack of financing or interest will get an extension of the time to complete their projects so they won't have to go through the permitting process all over again, if Gov. John Lynch signs SB 93 into law.

The move could potentially lend a hand to stalled Nashua projects, including the much talked-about Nashua Landing – a huge open-air mall slated for the former site of the Hampshire Chemical Corp. plant along the Nashua River.. . . more

Friday, April 24, 2009

Apple Stores: The big chill

Is there an Apple Store near you? Count yourself lucky, because the days of Apple’s (AAPL) aggressive expansion into the branded retail space are over — at least for now.

After opening more than 250 company-owned stores in eight years — an average of better than 15 per quarter — Apple in the last quarter opened just one.

The building slowdown is one of several moves that Apple has made in response to what COO Tim Cook this week called a “horrendous economy.”. . . more

New Filene's Basement owner exploring options

The new owner of Filene's Basement says it is reviewing "all available options" for the discount retailer, but plans no immediate changes in management or operations.

Buxbaum Group, a California-based liquidator, acquired the 25-store chain Wednesday through an affiliate company, FB II Acquisition Corp. The sale came after the previous owner, Retail Ventures Inc., said Filene's Basement was experiencing "significant liquidity problems.". . . more

Landlords craft stimulus plans of their own for tenants in trouble

When Marcela Prieto opened her clothing boutique in a Pinecrest shopping center, she didn’t worry about organizing the grand opening party.

Prieto didn’t go out and buy the cupcakes and two cases of champagne for 120 guests, nor did she inflate dozens of balloons or design and order nearly 4,000 postcard invitations.

Instead, Prieto’s landlord, Terranova Corp., did it for her — at no charge. . . . more

Americans reclassifying luxury, necessity in recession

A few years back, the list of "gotta-haves" for many Americans included a car, TV, microwave, home air conditioning and dishwasher.

Now, not so much.

A Pew Research Center survey released Thursday finds that the recession has changed Americans' minds about many items that used to seen as necessities.

In a 2006 Pew survey of luxuries and necessities, 68% said a microwave was a necessity; now that's 47%. And 52% say a TV is a necessity today, down from 64% in 2006. . . . more

Is the time ripe for REITs?

Yesterday one of our Urban Digs readers pointed out an interesting article from the Financial Times. The article notes that REIT prices in the U.K. have declined significantly below their net asset values and that these declines have exceeded the price declines of the underlying real estate that REITs own.

Just a quick review for newbies: A REIT is a tax advantaged vehicle for the ownership of real estate. It can be a private, essentially traded by appointment, or a public REIT with shares quoted on an exchange daily. The REIT is entitled to its tax advantage because it pays out 90% of its net income each year to shareholders. As a high income instrument, REIT's returns to shareholders are comprised of the substantial dividends they pay, topped off by any increase in the value of the stock. (The significant income component is not a new concept. The whole stock market was yield oriented years ago and much of the long-term returns of stocks are based on the dividend component).. . . more

Foreclosures hit Opus in Florida, Texas

Three Opus Corp. developments in the southern United States are facing foreclosure actions from lenders: a $192 million shopping mall in Austin, Texas, and two shopping centers near Tampa, Fla.

The Florida foreclosures may have helped push Opus South to declare Chapter 11 bankruptcy on Wednesday. Opus South is one of five regional divisions operated by Minnetonka-based Opus Corp. The division also was hurt by condo deals that went bad.. . . more

Chain fills empty Circuit City stores

P.C. Richard & Son expanding in N.J.

The empty husks of some of Circuit City's box stores will be filled with electronics and appliances again.

P.C. Richard & Son is remodeling former Circuit City store interiors in Brick, Eatontown and East Brunswick. P.C. Richard executives plan to open those stores by the first week in June. They also plan to open stores in abandoned Circuit City stores in New York City and Connecticut. The former Circuit City in Freehold Township is not part of the plan. . . . more

Thursday, April 23, 2009

Glimcher deepens 1Q loss

Glimcher Realty Trust notched a slight gain in first-quarter revenue but posted a worse-than-expected loss of more than $3 million for the period, the mall operator reported.

The Columbus-based shopping center and mall operator told investors it lost $3.6 million, or 9 cents a share, in the quarter ended march 31, compared with a loss of $261,000, or a penny a share, a year earlier. Glimcher earlier had warned it expected a loss of up to 4 cents a share.. . . more

Luxury Market Recovery? Not Yet, but...

Stevens, PA April 22, 2009 -- For the first time in nearly two years, there is evidence that the recession may be moderating. However, luxury goods marketers should not celebrate yet; the evidence also shows that affluent consumers are changing their patterns of consumption, and these changes may outlast any economic downturn.

Unity Marketing's exclusive Luxury Consumption Index (LCI) continues to drag after hitting an historical low in the third quarter 2008. In the latest survey of 1,034 affluents (average income $207,000) the LCI showed a very slight improvement of 1.5 points. The in-depth survey was conducted April 3-8, 2009 and included questions about their financial situation and luxury lifestyle, as well as their luxury purchases and spending in the past three months. . . . more

Supervalu posts loss but results beat Wall St view

NEW YORK, April 23 (Reuters) - Supermarket operator Supervalu Inc (SVU.N) posted a higher-than-expected quarterly profit before a string of charges on Thursday, sending its shares up 11.5 percent.

The company also said its closely watched identical-store sales fell 2 percent in the quarter. Those sales include results from outlets operating for four full quarters, including store expansions and excluding fuel sales.. . . more

Losing Its Cool at the Mall

AT the entrance to almost every shopping mall in the country, you will find a directory that, if you are spatially coordinated, will give you an approximate lay of the land. You can gauge the distance from Abercrombie & Fitch to its younger-skewing cousin, Hollister, or its older cousin, Ruehl, and find the way to their closest competitors in the teenager and young adult category, AĆ©ropostale and American Eagle Outfitters.

But you will be no closer to discerning what drives the modern youth from one store to the next; what differentiates one’s frayed cargo shorts from another’s; or why one of them, Abercrombie, is facing a consumer revolt, while others are paradoxically upbeat. A clue: It has to do with price.. . . more

Wednesday, April 22, 2009

Survey: CRE Hopes Cautiously Rising

WASHINGTON, DC-The Real Estate Roundtable Sentiment Survey for Q2 2009 reports that the industry is feeling more hopeful that a recovery is on the horizon, at least compared to the dim view of the future that the Index captured in January. The Sentiment Index registered at 41 for Q2--an increase from Q1’s 38 and prior to that, 33 six months ago.

President and CEO Jeff DeBoer told listeners in a conference call that the findings are reflective of reports from various government quarters that the economic crisis may be lessening. Still, though, he hastened to add that the situation is still "dangerous" with conditions having significantly eroded. . . . more

New Retail Center Has Anchors, But No Demand To Fill Its Shop Spaces

North Haven, CT - It's been tough enough in the recession to fill existing shopping center space, let alone build more.

But construction is moving ahead on North Haven Commons, a 200,000-square-foot center just off I-91.

Well, sort of.

The developer, Eclipse Development Group of Irvine, Calif., says it is putting off construction of spaces for smaller tenants as it finishes off spaces for anchor tenants.. . . more

Fresh & Easy expansion to continue despite red ink

At a time when Southern California supermarket chains are closing stores and laying off workers, Fresh & Easy Neighborhood Market continues to buck the trend, opening its 64th store in the metropolitan area in Corona today. It is part of an aggressive expansion by the division of British retailing giant Tesco to gain a foothold in the United States, even as it incurs losses that would drive less ambitious companies back across the Atlantic.

On Tuesday, Tesco said Fresh & Easy lost about $200 million on sales of about $300 million for its fiscal year ended Feb. 28. The chain of small-format grocery stores has 119 markets, including 55 in Las Vegas and Phoenix.. . . more

Blockbuster set to roll out rental kiosks

Blockbuster's answer to Redbox DVD rental kiosks is about to make its debut, with 10,000 vending machines planned by the end of next year.

Last fall, Blockbuster partnered with NCR Corp. to plan its entry into the DVD vending business. The companies just finished a pilot test in Dallas and Oklahoma City. On Tuesday, NCR said it acquired the remaining equity in TNR Holdings Corp. to accelerate the national rollout of Blockbuster Express machines. . . . more

DeLeo 'open-minded' on sales tax

Speaker rules out income tax hike

House Speaker Robert A. DeLeo said yesterday that he is "open-minded" about raising the Massachusetts sales tax to help the state cope with a historic economic downturn, a sign that representatives will seriously entertain at least a one-cent hike in the sales tax in an upcoming budget debate.

"I'm open-minded towards it, as I am with the others," DeLeo told reporters yesterday, after being asked how he felt about increasing the sales tax.. . . more

Picture dim as liquidator gets Filene's Basement

Filene's Basement, the landmark Boston chain best known for its bargains, has changed hands again and faces an uncertain future.

Retail Ventures Inc., the Ohio company that owned the struggling retailer, said it transferred the discounter to a subsidiary of the Buxbaum Group, a California liquidation company known for running going-out-of-business sales.

Filene's Basement's value has sunk so much that Retail Ventures said it essentially gave the chain away.. . . more

Chelsea closes on NH land

MERRIMACK, NH – Chelsea Property Group forked over $17 million last week to close on land slated for a new outlet mall in Merrimack, although it's still not clear when construction will begin.

The New Jersey-based developer purchased 170 acres off Exit 10 on the F.E. Everett Turnpike from Monahan-Fortin Properties II, LLC, based in Nashua.

Broker Tom Farrelly said the deal may be "one of the largest land sale transactions in the history of southern New Hampshire.". . . more

Tuesday, April 21, 2009

Kirkland's to close 35 to 40 stores


April 20 (Reuters) - Home accessories retailer Kirkland's Inc (KIRK.O) said it expects to close about 35 to 40 stores in fiscal 2009, according to a regulatory filing.

"While the plan for
fiscal 2009 represents a further reduction in the store base, we expect the store count to reach a bottom by the end of the year," the company said in a filing with the U.S. Securities and Exchange Commission.. . . more

Coach posts 29% drop in profit, initiates dividend

NEW YORK (MarketWatch) -- Coach Inc. on Tuesday said that its third-quarter profit fell 29%, hurt by job-cutting and store-closing costs and consumers paring back on spending in the face of a U.S. recession.

Chief Executive Lew Frankfort is rebalancing product assortment and cutting regular retail prices by 10% to 15% to bring more items between $200 and $300 to target a more "price sensitive" consumer. He's also cutting back the company's planned number of new stores from the current run rate of 40 North American retail locations a year to about 20, while also suspending existing retail store expansions. . . . more

Retail sales down

WASHINGTON, April 21 (UPI) -- Retail sales in the United States fell last week, the International Council of Shopping Centers-USB reported Tuesday.

Sales declined 0.4 percent from the previous week and fell 0.1 percent compared to the same week of 2008, the report said.

ICSC attributed a portion of the decline to a shift in the Easter holiday, which fell on March 23 a year ago and April 12 this year.. . . more

Monday, April 20, 2009

REIT Equity-Debt Disconnect Opens M&A Options

The recent rally in shares of real estate investment trusts has amplified the disconnect between equity- and debt-market valuations in the sector, which has in turn opened back-door merger-and-acquisition opportunities to the more well-capitalized players in the space.

REIT shares have rallied between 30% and 60% over the last month despite continued weak retail sales, rising vacancies, structural overcapacity in the sector, staggering debt loads and significant refinancing risk at some of these companies. . . . more

Fed’s Lockhart: Commercial Real Estate Trouble Risk to Economy

NASHVILLE –The latest big threat to economic recovery in the U.S., the commercial property market, could be the next target of an expanded special lending program from the central bank, Dennis Lockhart, president of the Atlanta Federal Reserve Bank, said Saturday.

“On our watch list this year as a risk to the [economic] outlook is continuingworsening in the commercial real estate sector,” Mr. Lockhart said. . . . more

Sellers Woo Shoppers With Guarantees to Address Layoff Worries

First, retailers enticed struggling consumers with deep discounts. Then they dangled buy-one-get-one free deals.

The latest recession tactic? Guaranteed financial help in the event of a job loss.

With countless workers hoarding cash and fearful of joining the swelling ranks of the unemployed, American companies are trying to stimulate demand with a new twist on an age-old retailing strategy: money-back guarantees. . . . more

Enfield Commons Trades for $24M

ENFIELD, CT-Enfield Commons has a new owner. Paramount Realty Services dropped $24 million for the shopping center, taking it over from Centro Properties Group. The price represents roughly $95 per square foot for the 252,000-square-foot retail center.

This was another divestiture of a Centro asset, which Paramount says it bought below market value as well as below replacement cost. A representative for Paramount tells GlobeSt.com that the company was interested in the Commons for it's "upside opportunity" with a vacant space formerly occupied by Linens n' Things. Paramount is close to signing what the rep referred to as a "national tenant." . . . more

Malls' bankruptcy could be painless

The bankruptcy of mall giant General Growth Properties Inc. may lead to behind-the-scenes changes in ownership at the company's 200 shopping centers nationwide, as well as debt restructuring and personnel reshufflings. All of which will likely go unnoticed by shoppers.

The court-supervised restructuring of the Chicago real estate investment trust, which owns Paramus Park and the Willowbrook mall in Wayne, may also ripple into the market for commercial mortgage-backed securities, or CMBS.. . . more

Kimco Realty Corporation Closes $220 Million Unsecured Term Loan

NEW HYDE PARK, N.Y.--(BUSINESS WIRE)--Kimco Realty Corporation (NYSE: KIM) today announced that it closed on a new $220 million two-year unsecured term loan. The loan, which bears interest at an annual rate of LIBOR (subject to a 2.00% LIBOR floor) plus 465 basis points, will mature in April 2011. The loan was increased 10 percent to $220 million from its initial size of $200 million.

The Company recently repaid $130 million of its unsecured medium term notes, bearing interest at 6.88%, through use of its U.S. unsecured revolving credit facility. Proceeds from this term loan will be used to partially repay outstanding amounts under the U.S. credit facility. After these pay downs, the Company will have approximately $1.6 billion of available borrowing capacity under its credit facilities, which bear interest at a rate of LIBOR plus 42.5 basis points and expire in 2012 (with extension). . . . more

Jos. A. Bank to slash store expansion

Jos. A. Bank Clothiers Inc. is putting the brakes on its aggressive expansion this year, opening up just 15 new stores instead of a planned 50.

That’s a dramatic departure from its 50 new stores in 2007 and 40 stores last year.

The Hampstead retailer quadrupled the number of its stores in the past decade but will take a slower approach through 2011. CEO R. Neal Black said the retailer still plans to hit the chain’s 600-store goal but is proceeding with caution.. . . more

Nordstrom Announces New Store Opening in Peabody, Massachusetts

Nordstrom Inc (NYSE:JWN), a fashion specialty retailer, announced on Friday (17 April) the opening of a new store in Peabody, Massachusetts, US.

The new 138,000 square-foot, located at Northshore Mall, is reportedly the third Nordstrom to serve the greater Boston area.

The company said that the new store, which has a team of 280 employees, will offer customers a well-edited selection of quality and luxury fashion brands for women, men and children. . . . more

Friday, April 17, 2009

Drop is expected in home improvement spending

The amount of money that homeowners will spend on home improvement is projected to decline by 12 percent in 2009, according to a new study from Harvard University’s Joint Center for Housing Studies.

"The weak housing market and the national economic recession continue to take their toll on remodeling,” Nicolas P. Retsinas (left), director of the Joint Center for Housing Studies, said in a statement. “It looks increasing unlikely that this industry will recover until consumers have more confidence in the housing market.”. . . more

Target CEO sees 'encouraging signs'

Minneapolis — The nation's large retailers continue to struggle, as consumers have cut back on their spending during the recession.

Target Corp., based in Minneapolis, has had a rough several months because more of its business is based on non-essential goods like clothing and home furnishings.

The CEO of Target, Gregg Steinhafel, said today he's seeing some encouraging signs that a slow turnaround may be getting underway. . . . more

Filene's Basement up for sale

Store closures fail to help cash-strapped retailer pay vendors

Filene's Basement , the Boston bargain landmark, is being put up for sale.

The plan, disclosed yesterday in a regulatory filing, comes just weeks after the famed discounter said it was scrambling for cash to satisfy vendors who were threatening to push the company into bankruptcy because they had not been paid for months.. . . more

Seven members of Borders' board of directors to leave; plan for reverse stock split called off

A shakeup is coming to the board of directors that oversees Ann Arbor-based Borders Group Inc., as seven of the bookseller's 10 directors plan to leave the company this year.

Two of the directors will not stand for re-election, and another five plan to step down in the coming months as replacements are found. The new board will have eight members, down from the current 10. . . . more

Ackman's Mall Gamble

In the bombed-out world of commercial real estate, Bill Ackman has placed himself at ground zero.

The activist investor -- whose hedge fund Pershing Square Capital Management amassed a 25 percent stake in General Growth Properties -- yesterday watched the Chicago-based shopping-mall giant go bankrupt.

In an unusual move, Ackman in recent weeks had actually lobbied for the Chapter 11 filing. His risky bet: that the market value of General Growth's malls exceeds its staggering $27 billion debt load, creating a huge upside to the mountain of shares he bought on the cheap. . . . more

Thursday, April 16, 2009

Finish Line Seeks Gold in Spite of Real Estate Downturn

The sporting goods retailer renegotiates leases and cuts costs to prepare for a turnaround.

While some retailers have crumbled under the pressure of sliding sales and falling profits, others are trying to be more proactive about surviving the now more than year-long recession. The Finish Line Inc. is one such company. The Indianapolis-based sporting goods retailer has been taking advantage of the downturn in the real estate market to renegotiate its leases—a process that cut its operating costs by nearly 4 percent in its fiscal fourth quarter alone. And it is looking for more upside in the year ahead; about 40 percent of its leases are up for renegotiation during its current fiscal year (which runs from March 2009 through February 2010). . . . more

It's Insane! Crazy Eddie Returns

How insane is this? Magic Investments, a family owned, New York area firm has purchased the Crazy Eddie retail name and intends to bring it back in several forms, including online, in brick-and-mortar locations and with licensed products.

Crazy Eddie, at one time, was a consumer electronics retailer located in the Northeastern United States. It was started in 1971 and was liquidated via bankruptcy proceedings in 1989. At one time, the chain operated 43 stores with $300 million in annual revenue. It was renown for its brash radio, TV and print ads. On the air, actor/radio DJ Jerry Carroll would scream in a frenetic voice about Crazy Eddie discounting: “The guaranteed lowest prices on audio, video, anything and everything in home entertainment!” The tagline was an apoplectic: “His prices are insane.”. . . more

The mighty Dollar

One of the hottest retailers in a cold economy is small-box discounter Family Dollar Stores. What's its low-cost secret? And would a recovery ruin its formula?

(Fortune Magazine) -- Since losing her job at a local auto dealership last month, Ana Foley, 37, is buying less, which is bad news for stores like Macy's and J.C. Penney. But that doesn't mean she has stopped shopping. On a recent afternoon, she browsed the racks at a Family Dollar store in Peekskill, N.Y., and bought a brown tank top with decorative shirring. The price: $4. "A top like this," she says, "would have cost triple at Macy's." . . . more

Best Buy staffing move likened to failed Circuit City

Recent changes to Best Buy's store-staffing plans should save the company money but are drawing some comparisons to Circuit City Stores Inc.'s disastrous personnel moves two years ago.

Richfield-based Best Buy Co. notified workers over the past week of the new staffing model, which a spokeswoman says "places greater emphasis on customer-facing employees and provides more focus and clarity to the leadership roles in the store." . . . more

General Growth files for bankruptcy

Nation's No. 2 mall owner has been unable to refinance debt amid credit crisis.

NEW YORK (Reuters) -- General Growth Properties Inc., the second largest U.S. mall owner, filed for bankruptcy protection on Thursday in one of the biggest real estate failures in U.S. history.

Ending months of speculation, the Chicago-based mall owner, which listed total assets of $29.56 billion and total debts of $27.29 billion, sought Chapter 11 bankruptcy protection from creditors along with 158 of its more than 200 U.S. malls, while it seeks to restructure some of its debt. . . . more

Wednesday, April 15, 2009

Zell says commercial real estate values down about 30 percent

Billionaire investor Sam Zell said commercial real estate values are down about 30 percent and the U.S. housing market is “bottoming out.”

“You’re going to see a lot of change of ownership in commercial real estate” as a result of the overly optimistic forecasts, Zell said in an interview today on Bloomberg Television. “It’s more likely the banks will either foreclose or come up with some kind of restructurings that will ultimately allow the properties to trade.” . . . more

Macquarie DDR Trust Lists 52-Shopping Center Portfolio For Sale

Macquarie / Developers Diversified Joint Venture Entrusts HFF With $1.9 Billion Shopping Center Portfolio

Macquarie DDR Trust (ASX:MDT), a joint venture between Aussie-based Macquarie and U.S. retail REIT, Developers Diversified Realty Corporation (NYSE:DDR), put a portfolio of 52 U.S. shopping centers up for sale.

As of Dec. 31, 2008, MDT said the portfolio of assets were valued at $1.9 billion, which accounts for 70.4% of the Trust's total asset value. MDT first foreshadowed this portfolio listing when on Mar. 19, it said MDT's intentions were to "reorganize and simplify" its ownership in certain joint venture interests. The trust is considering purchasers interested in a limited 85.5% ownership interest or 100% interest in the portfolio. . . . more

REIT Sector Is Ripe for Mergers and Acquisitions

Recession Leaves Shares of Many Real-Estate Investment Trusts at Distressed Levels, Amid Credit Crunch

The economic crisis has created a survival-of-the-fittest environment for U.S. real-estate investment trusts.

With many REITs trading at distressed levels amid a continuing credit crunch, experts say the stage is being set for merger-and-acquisition plays, with stronger companies taking over weaker rivals.

"I do think that M&A activity will begin to accelerate this year," particularly if interest rates stay low, said Jay Leupp, a portfolio manager for Grubb & Ellis AGA Realty Income Fund.. . . more

Best Buy Opens Nine New Stores in First Fiscal Quarter

Best Buy today announced the grand opening of eight new U.S. Best Buy stores for the first fiscal quarter 2010. The new stores are set to open this month and next in the following cities: . . . more

Men's Fashion Line Trades Down

JOE Joseph Abboud Will Get More Casual as It Moves to Penney From Macy's

Shoppers are trading down, and so is men's fashion label Joseph Abboud. The brand, known for unusual marketing strategies like dressing National Basketball Association coaches, is moving its JOE Joseph Abboud clothing, now sold at Macy's, to J.C. Penney this summer.

At the same time, the line, which targets men in their 20s and 30s, will shift its focus from dress clothing like suits and sport coats, to more sportswear like jeans and sweaters.. . . more

Shake-up in Make-up?

Beauty 360 could spark a 180 shift in this specialty segment

Sephora has been challenging the conventional beauty industry to rethink its approach to selling ever since it landed on U.S. shores. ULTA, the largest specialty beauty store, blends prestige, mass and salon products in a one-stop shopping environment. And television shopping divas QVC and HSN have shattered the notion that shoppers need to touch and smell before they’ll buy.

The
debut of Beauty 360 has the potential to be yet another game-changer in the beauty segment. . . . more

Developers pledging to spruce up Filene's site

But construction plans still on hold

Developers of the Filene's redevelopment site in Downtown Crossing are promising to spruce up the parcel that now resembles a war zone in the heart of Boston.

Representatives of the developers, New York-based Gale International and Vornado Realty Trust, agreed on Monday to seal the roof of the Filene's building and cover the exposed side of the building's shell with mesh, said city officials.. . . more

Hallmark Cards cutting up to 8 percent of US work force in response to falling sales

KANSAS CITY, Mo. - Hallmark Cards Inc. on Tuesday said it will cut its U.S. work force by up to 8 percent as the nation's largest greeting card-maker struggles with falling sales.

The Kansas City-based company told employees it will lay off between 550 and 750 of its 9,200 full-time U.S. employees over the next six months.. . . more

No quick end to recession: Wal-Mart CEO

WASHINGTON–The head of Wal-Mart Stores Inc. said Wednesday there remained a "lot of stress" in the economy and he did not anticipate a quick end to the recession.

"There's still a lot of stress," Wal-Mart CEO Mike Duke said on NBC's "Today Show."

"It's not a 'V' recession, where we're just going to bounce out and come back," he said.. . . more

Dress Barn, Inc. Details Strengthening Business Trends

SUFFERN, N.Y.--(BUSINESS WIRE)--Dress Barn, Inc. (NASDAQ: DBRN - News) announced today that it has experienced improved trends across the Company’s businesses. As a result, the Company currently expects to report earnings per diluted share in the range of approximately $0.30 to $0.32 for its fiscal third quarter ending April 25, 2009. The Company estimates that results for the third quarter are likely to include flat comparable store sales. The Company expects to communicate a narrower fiscal 2009 earnings guidance range when it reports its fiscal third quarter results on May 21, 2009.

David R. Jaffe, President and Chief Executive Officer stated, “We are pleased with a good reception to our Spring merchandise assortment of fresh, fashion-forward looks at excellent value. We are also benefiting from our prior actions to create a clean inventory position. Finally, our cost cutting initiatives have improved our overall efficiency. Our planning continues to assume a challenging market environment, and we will remain vigilant on further improving our business. We remain well positioned, particularly given our strong balance sheet, to deliver good financial results and to be in a position to create value to our shareholders.”. . . more

Tuesday, April 14, 2009

Retail Recovery Still Months Away

Until the job market improves, don't expect consumers to start spending.

Weak retail numbers for March surprised some analysts expecting to see the small sales gains of January and February continue. They shouldn't have.

The shopping mantra for 2009: If you don't need it, don't buy it. Whether it's cars, furniture or fashion, people are content to make do with what they have. And those who track the industry long term see the trend continuing into the fourth quarter of the year, at least. For retailers struggling to pull potential shoppers in the door, that means more months of lighter traffic, lower sales and pressure to cut prices.. . . more

Bargain Hunting Drives Retail Bottom Lines

If retailers are looking to boost sales as most of the country transitions from spring to summer, they might want to ask themselves one critical question: Will the average consumer really spend $125 on strappy sandals?

Lots of hype surrounded retailers' sharp discounts on apparel and shoes at the start of the year. However, in some stores, those discounts have largely fizzled out on new merchandise that consumers are actually interested in buying. . . . more

Talbots tumbles after loss exceeds estimates

NEW YORK (MarketWatch) -- Shares of Talbots Inc. tumbled 21% on Tuesday after the women's clothing retailer posted a worse-than-expected fourth-quarter loss and gave a forecast that also trailed Wall Street expectations.

The company said late Monday loss from continuing operations excluding items in the quarter ended Jan. 31 was $128.4 million, or $2.40 a share. Analysts, on average, had expected a loss of 65 cents a share.

Sales at stores open at least a year in the fourth quarter plunged 25%.. . . more

True Value pushes ahead

(Apr. 13) For many businesses, the natural inclination in a down economy is to cut back on spending. True Value executives are urging co-op members to do just the opposite.

“Many of our competitors will be making cutbacks in marketing, customer service, inventory levels and store cleanliness—all things that make first and lasting impressions,” said Lyle Heidemann in an address to members during True Value’s 2009 spring market last month in New Orleans. “Don’t fall into the same trap. Remember, we actually have an opportunity to grow and increase market share during an economic slowdown.”. . . more

Stores suffer big drop in March sales

Unexpected 1.1% decline in overall sales follows two months of gains.

NEW YORK (CNNMoney.com) -- Retail sales suffered an unexpected big decline in March, the government reported Tuesday.

The Commerce Department said total retail sales fell 1.1% last month, compared with February's revised gain of 0.3%. Sales in February were originally reported to have dipped 0.1%.

Economists surveyed by Briefing.com had been expecting an increase of 0.3% in March.. . . more

Monday, April 13, 2009

Stop & Shop Announces Appointments to Leadership Team

QUINCY, Mass., April 13 /PRNewswire/ -- Carl Schlicker, President & CEO of The Stop & Shop Supermarket Company and Giant Food (Landover, MD) today announced the appointment of Paula A. Price as Chief Financial Officer and Paula Labian as Executive Vice President of Human Resources. These two appointments complete the leadership team.

As Chief Financial Officer, Paula Price will be responsible for the Finance, Strategy and Planning, and IT functions at Stop & Shop and Giant Food. . . . more

Richmond retail center fetches $7M

Midlothian Plaza Associates, LLC has purchased a 146,305-square-foot retail center in Richmond, Va., from Allied Capital REIT, Inc. for $7 million..

Known as the Midlothian Center, the property is located at the corner of Wadsworth Drive and Midlothian Turnpike. The center was 57 percent occupied at the time of the sale with medical and retail service tenants. . . . more

Barneys downgraded on cash concerns

(AP) - Standard & Poor's Ratings Services on Monday downgraded upscale retailer Barneys New York Inc. on concerns about its cash position.

S&P said it lowered its rating on the company to "CCC" from "B-". It also lowered the issue-level rating on the company's senior secured term loan to "CCC" from "B-." The outlook is "negative," implying further downgrades are possible.

S&P credit analyst David Kuntz said the downgrade reflects the company's deteriorating liquidity position, which was highlighted by its recent need for a cash infusion by Istithmar World.. . . more

BJ’s Wholesale scouts space in Pittsburgh area

Despite a retail industry in which few chains are thinking about opening new stores, local real estate sources say BJ’s Wholesale Club is scouting for locations in the Pittsburgh area.

Natick, Mass.-based BJ’s is a big-box buyers club that operates a business model similar to that of Costco and Sam’s Club. Its sales are growing as customers gravitate to clubs in search of discounts.. . . more

Z Gallerie files for Chapter 11 bankruptcy protection

Z Gallerie Inc., a Gardena, Calif.-based home decor retailer with two stores in Dallas, filed for Chapter 11 bankruptcy Friday.

The privately held chain said it voluntarily filed to remove its liability from leases and to strengthen its balance sheet.

Last month, it closed a distribution center in Atlanta and 21 stores, leaving several markets. A spokesman said there are no plans to close its seven Texas stores. . . . more

Rumors about retailers can be very bad news for their health

Word started trickling out in October, warning that gift cards could be worthless if stores were to go bankrupt. Within a month, an ominous Internet claim said chains including Ann Taylor and Zales would close by year's end. By January, news reports and TV segments were practically declaring retailers dead, often touting lists of the 10 or 15 recognizable names most likely to disappear in 2009.

Pretty rough stuff considering cost-conscious consumers had already cut back on spending.. . . more

Big Y to upgrade stores

SPRINGFIELD — Big Y Foods, Inc. plans to invest over $3 million to upgrade their facilities.

In Massachusetts, the Big Y Supermarket in Adams has just completed the addition of a Big Y Pharmacy.

This pharmacy joins the other 32 Big Y Pharmacies in the chain for a total of 33 locations.

In Stafford, Conn., the Big Y World Class Market will incorporate the Big Y Pharmacy from another location in the shopping center to right inside the market.. . . more

Starbucks details store closures

Starbucks Corp. has released a list of the 200 stores it plans to shutter. The chain announced its intent to close the stores in January, but did not specify the locations.. . . more

Cumberland Farms is in deep

DEEP RIVER, Conn. -- Cumberland Farms Inc. has opened its second "foodcentric" convenience store. The new location, in Deep River, Conn., officially opened its doors in early April. The company held a grand opening even last Thursday.

The Deep River store is the second of the company's renovated stores, following the debut of the concept with a store the opened in Farmington, Conn., on March 13. . . . more

Friday, April 10, 2009

WP Realty sells South Brunswick Square for $45.5 million

SOUTH BRUNSWICK, N.J. — WP Realty has sold South Brunswick Square, a 260,981-square-foot grocery-anchored shopping center in South Brunswick, Middlesex County for $45.5 million. Located along U. S. Highway Route 1, the facility was purchased by 426 ROYAL, LLC. The property is anchored by Home Depot and Stop & Shop and features other tenants such as Bob’s Stores, Dollar Tree, Bandito’s Margarita Factory, Blockbuster Video and Friendly’s. The center is currently 100 percent occupied. WP Realty originally purchased the property for $24 million in 2003.

Source: RE Business

Seabrook should draw hard line on traffic woes

Anyone who shops in Seabrook on a weekend or around Christmas knows the drill — gridlock, and all the bad feelings that go with it, is the standard expectation.

So as the town continues to look at the possibility of a massive new shopping center at gridlock's ground zero, the intersection of routes 1 and 107, the Planning Board ought to push hard for as many traffic-easing concessions as it can.

The shopping center's developer, Developers Diversified Realty, has already offered to pay for several improvements that should move cars along at a faster rate. But it won't agree to widen Route 1 to the north and south of the intersection, saying it is unaffordable.. . . more

Major retailers see some light even in falling March sales

March retail sales indicate Americans must be sprucing up, planting gardens and maybe planning some outdoor entertaining.

Major chain stores posted another sales decline in March, but for the first time in ages, home goods performed better than expected and there was a little uptick in the do-it-yourself aisles.

While numbers are still soft, some retailers increased first-quarter outlooks as they figure out how to navigate another year of conservative consumer spending. . . . more

Nordstrom sales slip amid Mass. expansion

Nordstrom Inc.’s March sales for the five-week period ended April 4 dipped 10 percent to $674 million, compared with $750 million for the same period last year, the retailer said Thursday. Nordstrom is currently expanding in several states, including Massachusetts.. . . more

Red Mango Announces Record Franchise Expansion

Red Mango, one of the fastest-growing retailers of authentic nonfat frozen yogurt, has announced record franchise development during the first quarter of 2009. Development deals with existing and new franchisees will result in some 128 new Red Mango stores to be added to the franchise network over several years. The agreements include further expansion in California and Illinois as well as entry into Texas, Massachusetts, Indiana, Wisconsin, Missouri, Kansas and Tennessee. . . . more

Pep Boys Launches New Concepts Amid Sales Slump

Though its 2008 fiscal year results were less than desired, Pep Boys is planning to roll out two new concepts this year--smaller service-oriented stores and store-within-a-store areas that focus on "performance" vehicles, such as muscle cars, certain imports and trucks.

The company opened its first service store this quarter in Ventura, CA, with plans to open 15 more this year and an additional 20 to 40 units in 2010. Management said during its fourth-quarter conference call that it will look to lease existing spaces with car bays to fuel the expansion, as opposed to constructing new locations. . . . more

Thursday, April 9, 2009

‘New’ US shopper to emerge from crisis

As the recession dramatic­ally alters where and how Americans spend their money, there is an emerging consensus on the likely profile of the “new” US consumer who will emerge on the other side of the crisis.

A Citigroup report, for example, argues that US consumers are shifting towards “conscientious consumption”, embracing a “thriftiness” focused on value and quality, not quantity.

Euro RSCG, the global advertising group, says a recent survey of 500 people in the US, the UK and France pointed to a shift to “value” combined with a desire for “voluntary simplicity”. And consumer anthropologists suggest Americans will seek to “un-stuff” their lives, and focus more on the community. . . . more

Aeropostale Reports Record March Sales Results

NEW YORK, April 9 /PRNewswire-FirstCall/ -- Aeropostale, Inc. (NYSE: ARO), a mall-based specialty retailer of casual and active apparel for young women and men, today announced that total net sales for the five-week period ended April 4, 2009 increased 13% to $160.5 million, from $141.8 million for the five-week period ended April 5, 2008. The Company's same store sales increased 3% for the month, compared to a same store sales increase of 3% in the year ago period. The Company stated that it believes that its results for the month reflect a negative same store sales impact due to the Easter calendar shift.

Year to date, total net sales have increased 17% to $270.4 million, from $231.5 million in the year-ago period. Year-to-date, same store sales have increased 6%, compared to a same store sales increase of 4% last year.. . . more

Shoppers stay cautious, but sales declines ease

NEW YORK (AP) - Consumers continued to shop cautiously in March amid high unemployment and continued home foreclosures, but there were some glimmers of stabilization in retailer's sales reports on Thursday.

The later Easter hurt some chains' results - notably Wal-Mart Stores Inc. - but Easter is expected to boost sales for many in April.

Retailers have been slashing costs and cutting inventory in an effort to improve results amid weak consumer spending. Consumer spending is closely watched by economists and analysts because it accounts for 70 percent of all U.S. economic activity.. . . more

Are grocery-anchored centers still immune to recession?

(April 9, 2009) Regency Centers of Jacksonville, Fla., will unveil the Shops at Quail Creek shopping center next week. Located in Broomfield, Colo., a suburb north of Denver, the 137,429-sq.-ft. development features Colorado's largest 24-hour King Soopers grocery store.

The opening of the Shops at Quail Creek comes as many industry experts are debating whether grocery-anchored neighborhood shopping centers, which have been relatively immune to downturns in the past, are still a safe bet.

Observers say that grocery-anchored centers may fare better than other kinds of centers during the current downturn. “Everyone has to eat,” wrote Paul F. Kastner, in the February 2009 International Council of Shopping Centers' Certified Professionals Newsletter. “In fact, when people have a reduced amount of disposable dollars [food sales account for 12.5% of consumers’ annual income. . . more

Wednesday, April 8, 2009

REIT Sector Could Shrink Through Consolidation, Privatization

When the current downturn in commercial real estate comes to an end, the U.S. REIT sector might look a lot smaller, according to participants at New York University's 14th annual REIT symposium, which took place on April 2. With even the strongest REIT operators suffering from steep stock price depreciation over the past 18 months, many companies are seeing the benefits of being public disappear. As a result, the U.S. REIT sector might shrink by up to 85 percent over the next several years, according to estimations by the most dire symposium participants. . . . more

REITs Have a Rough First Quarter

Despite a slight rally Monday, equity REITs posted a 32% decline in the 1st quarter (FTSE NAREIT Equity Index). In March, REITs were up about 4%.

Shopping center and Industrial REITs were the worst performing sectors, each declining about 41% in the quarter. Manufactured housing was the best performing sector, declining just 2%. Manufactured housing is viewed as a more "recession proof" sector, which could benefit as people trade down to less expensive rentals.

We expect continued volatility in REITs over the next couple of months due to commercial real estate fundamentals, which are falling in most property types. If you jump into the sector, make sure you are diversified and only buy companies that have enough liquidity to roll over 2009 debt.. . . more

Predicting the retail bounce-back

Top retail execs offer their best guesses on the all-important question: When will things get better?

Have we hit bottom yet?That question is being debated even following the agreement by global leaders at the G-20 Summit in London last week to pump another $1.1 trillion into the International Monetary Fund and take other steps to jump-start the U.S. and world economies. The moves, and recent upward momentum on Wall Street, generated optimism—even if only momentary—that, as one observer said, "little green shoots" might be springing up at last.. . . more

Consumer borrowing dips more than expected

WASHINGTON, D.C. – Consumer borrowing plunged more than expected in February as Americans cut back their use of credit cards by a record amount.

The Federal Reserve said Tuesday that consumer borrowing dropped at an annual rate of $7.48 billion in February, or 3.5 percent, from January. Wall Street economists expected borrowing to slide by only $1 billion, according to a survey by Thomson Reuters.

The decline was led by a record drop in borrowing on credit cards, which fell at an annual rate of $7.8 billion, or 9.7 percent. That is the sharpest drop in dollar terms since federal records began in 1968, and the steepest percentage fall since 1978. . . . more

$16M Grabs 'Stop & Shop' Anchored Plaza

ENFIELD, CT-Katz Properties is securing a $10.56 million financing for its acquisition of the Stop & Shop Plaza--54 Hazard Ave., here. The financing, from Liberty Bank in Middletown, CT, is a fixed-rate, non-recourse loan, arranged by Timothy Breda and Derek Eakin of Goedecke & Co. LLC.

New York City-based Katz Properties purchased the 122,718-square-foot shopping center for $15.5 million from Centro Properties Group. The retail center is 85% leased, anchored by a 71,440-square-foot Super Stop & Shop supermarket. The other retailers in 36,778-square-feet, as well as three pad sites, include: 99 Restaurant, Advance Auto Parts, Hallmark Cards, the UPS Store, H&R Block, Domino's Pizza; and a Stop & Shop self-service fueling facility. . . . more

Rite Aid To Open First Customer World Store

Rite Aid opens a new store in Chattanooga on Thursday featuring the company’s first “Customer World” design.

“We’re very excited to open our first Customer World store design in Chattanooga,” said Mr. Russell. “Chattanooga residents can now see and experience the new design and services that many customers have been raving about since we opened our first Customer World store about four years ago. Customers told us that their relationship with the pharmacist was important, so each new store highlights the pharmacy. Pharmacy is our core business so we made it the focal point, or star, of the Customer World design.”

The store design, created using feedback from customer focus groups, is Rite Aid’s latest prototype design, offering a new look and many new services.. . . more

Nordstrom Beats Macy’s and Saks by Moving Inventories

April 8 (Bloomberg) -- Nordstrom Inc. is outperforming other department-store chains during the U.S. recession in part by moving fashions off the racks at about twice the pace of its rivals.

The chain holds inventory for 62 days on average, while Macy’s Inc. keeps its goods for 119 days and Saks Inc. for 140, according to data compiled by Bloomberg. With less cash tied up in inventory, Seattle-based Nordstrom can devote resources to projects that otherwise would have required borrowing. . . . more

Tuesday, April 7, 2009

Wegmans ranked No. 1 in Consumer Reports

A new Consumer Reports survey of grocery shoppers across the country placed Wegmans Food Markets Inc., based in Rochester, N.Y., at the top of the list. The survey included 59 national and regional supermarkets, super-centers and warehouse clubs.

The top 10 supermarkets in the country, according to the survey are:

1. Wegmans
2. Trader Joe's
3. Publix
4. Raley's
5. Harris Teeter
6. Fareway
7. Costco
8. Whole Foods
9. Market Basket
10. WinCo Foods. . . more