LAS VEGAS — The retail and shopping center industries may be down in the dumps, but some companies are looking on the bright side and still expanding.
Even as the recession has some developers’ backs against the financial wall and is forcing many projects to be delayed, there is a slew of new retail concepts emerging and developers are starting to talk about building new shopping centers again. Much of the expansion activity is coming from the hottest sector in retail right now — value retailers — including Dollar General, which is opening 450 stores this year and renovating or relocating 400 units. Dress Barn plans to roll out 40 namesake units and 50 Maurices stores in 2010, and new prototype concepts will bow in the next six months.
Simply Fashion, a 300-unit chain in the Southeast, is growing so quickly, it’s looking for long-term, short-term and temporary leases. The chain, targeting African-American women sizes 7 to 36, sells Fubu, Baby Phat and Apple Bottoms, as well as its own private labels.
“I’ve got to find 40 stores in the next year,” Richard Frick, vice president of real estate for 99 Cents Only Stores, said at the International Council of Shopping Centers’ ReCon convention here. “We have fresh produce, milk, eggs, health and beauty, vitamins, name brands and clothing. I don’t know of anybody that has our mix of general merchandise and food. We’re doing quite well.”
But it isn’t only the value crowd looking to expand. Teen phenom Forever 21 continues to sign leases and Henri Bendel is rolling out a new accessories concept designed for malls. Arthur, a French loungewear and beachwear chain with two units in Manhattan and a third on the way, plans to open 150 additional stores in the U.S. and 50 in Canada over the next five to 10 years. The upscale purveyor of pajamas has signed leases in Century City in Los Angeles; Santa Monica Place in Santa Monica, Calif.; The Streets of Buckhead in Atlanta; Scottsdale Fashion Square in Scottsdale, Ariz., and The Bravern in Bellevue, Wash.
Other new and developing store concepts that had people buzzing at ReCon include:
• P.S. from Aéropostale, a new kids’ chain from the teen retailer.
• Tilly’s, a rapidly expanding chain offering West Coast lifestyle clothing, shoes and accessories for kids, teens, men and women.
• Crazy 8 by Gymboree, a 38-unit chain selling fashion in sizes 0 to 14 at “crazy low prices.”
• Aritzia, based in Vancouver, sells clothing with an edge in comfy fabrics. There are five existing U.S. units, and stores are opening at Washington Square in Portland, Ore., and the Mall at Short Hills in Short Hills, N.J.
• Garage Clothing Co., a Canadian-based chain of laid-back, trend-conscious styles for young women, with stores in New York, New Jersey, Pennsylvania and Virginia.
• Love Culture, founded in 2007 by former Forever 21 vice president Jai Rhee, is opening stores selectively with a unit bowing at Santa Monica Place in August.
• Michael Brandon, a men’s wear collection, opened its first two stores this year at the Thousand Oaks Mall in Conejo Valley, Calif., and Camarillo Premium Outlets in Camarillo, Calif.
“Eryn Brinie is having a bit of success,” said Karen Bellantoni, executive vice president of Robert K. Futterman Assoc., referring to the South Korean retailer, which opened its first U.S. store on Broadway in Manhattan’s SoHo neighborhood. “Desigual, a Spanish brand, is opening its first U.S. store at 594 Broadway in SoHo [formerly Kira Plastinina] and will probably do more stores. Forever 21 still wants to expand and Love Culture wants to find a position in New York.”
Michael Fascitelli, president of Vornado, said Toys ‘R’ Us will open pop-up stores in malls for the holiday season. Vornado, along with KKR Group and Bain Capital, bought Toys ‘R’ Us for $6.6 billion plus the assumption of debt in 2005. The real estate investment trust has a 32.7 percent share of the toy retailer, which last week bought FAO Schwartz.
“We were really busy yesterday with a lot of deals,” said Fascitelli of the May 17-to-20 convention. “It’s more serious and more focused. There’s also an attitude of ‘If I’m going to spend money on something, I want to make it work.’ Retailers are in a cautious mode. They’re [looking at] existing assets and making sure cotenancies are good.”
Representatives of Kohl’s were spotted on the convention floor along with leasing teams from Liz Claiborne and Sephora. “We had several meetings with landlords regarding some new British clients that are exploring the U.S. market for possible store openings in 2010,” said a broker, who requested anonymity. “Their focus will be on New York.”
Meanwhile, British retailer Topshop is said to be “waiting on opening further stores at this time and watching the performance [of its first unit] in SoHo.” The retailer had said it would open three units in Manhattan.
With attendance falling to 30,000, ReCon 2009 was a decidedly quieter affair. In recent years, 50,000 to 60,000 real estate, shopping center and retail professionals descended on the convention, holding court by day in lavishly appointed McMansion-sized booths, and networking at myriad parties by night.
This year, however, the strain of the economy was apparent. Companies sent fewer representatives or skipped the confab altogether. Downsized booths were functional, not flashy. Where were the sparkling white meccas of oil-rich, development-happy desert countries? Abu Dhabi-based Aldar in 2007 built a booth the size of a small oil field. This year, the company was nowhere to be found.
With 1,300 exhibitors this year, compared with 1,800 in 2008, there were large swaths of empty space. Glaring absences from the exhibitor roster included Simon Property Group, Westfield Group and Garden Commercial Properties, which opted to meet with retailers and brokers at off-site hotels. The moves drew strong criticism and the mall giants were also accused of siphoning the much- sought-after fashion companies away from the convention floor.
“For companies that weren’t here, it was about economics,” said Michael Kercheval, president and chief executive officer of the ICSC. “Fewer people were here, [but] the looky-loos and cling-ons didn’t show up. The holes on the floor were from last-minute no-shows. The individual custom booths had grown out of control.”
With the economy still in the doldrums, ReCon could have been one big pity party. Instead, many of the attendees and exhibitors called the conference a success, although they admitted having low expectations at the start.
“Everyone came with the idea that it was going to be gloom and doom,” said Bellantoni. But “there are leases out on spaces. It seems like there are more people out there looking. Michael Kors opened in the former Mulberry space in East Hampton. La Perla is opening a shop in East Hampton.”
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