SEARS SEES A MANHATTAN FLAGSHIP TRIPLING AVERAGE UNIT’S VOLUME
Byline: Valerie Seckler
NEW YORK — Sears, Roebuck & Co. is aiming to make its stores the place where city-dwelling Americans shop and is laying plans for a Manhattan flagship that would more than triple the annual sales averaged chainwide.
The strategy, which is likely to be extended to several urban markets in California, marks a return to Sears’ previous commitment to robust store growth in big cities — one the retailer abandoned in 1993.
“We’re interested in opening a Manhattan flagship, and the sooner the better,” Arthur C. Martinez, chairman and chief executive officer, said Friday at the Governor’s Press Room, part of New York State offices in midtown Manhattan. “We’re bidding on the Coliseum site, which would become our premier store in America.”
A Sears full-line store at the New York Coliseum in Columbus Circle would “considerably more” than triple the chainwide volume average of $20 million annually, Martinez told WWD after the press briefing.
In addition, Sears is eyeing a possible full-line location on 125th Street in Manhattan in the Harlem USA mall, Martinez revealed.
“I could see us having two full-line stores in Manhattan and two in Queens,” he said. “Our store in Rego Park, Queens, has consistently been one of the chain’s top performers and has shown us that full-line city stores can still work.”
On Nov. 2, Sears opened a full-line location in the former Broadway store in downtown Oakland, Calif., a landmark building at the corner of Broadway and 19th Street.
“We’ve done market research that shows shoppers in urban areas are underserved for our kinds of products,” a Sears spokesman said. “It also has shown that Manhattan is leaking sales and sales-tax dollars to New Jersey, Westchester and Long Island.”
A survey of 558 randomly selected Manhattan residents found that one-third of them shopped outside Manhattan at least once a month. It also showed that one of every five resident dollars is being spent outside Manhattan. Only 12 percent of those canvassed worked off the island.
When asked how likely they were to shop at various chains not currently in Manhattan, if they were situated at the Coliseum, 64 percent said “yes” if the chain was Sears; 57 percent, Nordstrom; 54 percent, Neiman Marcus, and 50 percent, J.C. Penney.
The survey was conducted for Sears by the Consumer Research Corp. of Minneapolis Jan. 3-12.
Besides trying to tap what it believes is an underserved consumer, said Martinez, Sears is targeting big growth for New York because of the “improved economic climate under Gov. George Pataki.”
Most of the chain’s stores in New York State — one of Sears’ biggest markets throughout its 110-year history — rang up double-digit sales growth in 1996, Martinez added.
New York generates Sears’ second-biggest volume after California, Sears officials said. Sears operates 130 stores in New York, including 47 full-line units, eight hardware stores, eight dealer stores and 67 Western Auto Stores.
Sears has five full-line stores in New York: one in Brooklyn on Beverly Road; two in Queens, in Rego Park on Queens Boulevard and in Flushing on Northern Boulevard; one in the Bronx on Fordham Road, and one in Staten Island on Platinum Ave.
A full-line location slated to open by Nov. 1 in Brooklyn in the former Alexander’s in Kings Plaza, at Flatbush Avenue and Avenue U, is projected to produce annual sales of $60 million, Martinez said. Sears is working hard to launch the store earlier than November, he added.
That unit will be the largest Sears in the metropolitan area, a 288,000-square-foot store that will employ 125 full-time and 500 part-time workers, in addition to creating construction jobs. Sears plans to spend $20 million to remodel the store.
Overall, Sears aims to spend $4 billion over the next five years “to make its stores more exciting and easier to shop,” said Mary Conway, Sears’ regional vice president for the Northeast.
The Columbus Circle site is Sears’ first choice for a Manhattan flagship, Martinez said, but he noted that about eight bids by other organizations have been made to the Metropolitan Transit Authority for rights to the location.
“In making our bid, we’ve partnered with a developer, Forest City, to convert the location to a retail and residential project,” Martinez said.
Sears also has eyed sites in the Union Square and Herald Square shopping districts here, as well as the former Alexander’s store on Lexington Avenue in midtown Manhattan, Martinez related.
However, he explained, “The other sites didn’t give us the demographics or the logistics we’re targeting. The Upper West Side’s population density and transportation links are perfect.”
To date, three new full-line locations in the metropolitan area are firm: Kings Plaza, Brooklyn, and Bay Shore and Yaphank, Long Island.
While declining to list other potential Sears sites in the five boroughs, Martinez said, “We’re aggressively scouting for additional locations in the Bronx and Brooklyn.”
Asked whether the Kings Plaza store would siphon sales from its Beverly Road unit in Brooklyn, renovated in 1994, Martinez said Sears expects “a large-size volume, even given the other store.”
Caldor recently announced plans to close a Brooklyn store across the street from the planned Sears site, prompting some observers to wonder whether the discounter’s newest unit at nearby Atlantic Center had eaten into the other store’s sales.
Saying he thought that was unlikely, Martinez welcomed the entry of another discount chain in the Caldor space.
“With the emphasis discounters put on consumables, a mass chain would be a nice complement to our Beverly Road store,” he said.
Thirty of the more than 100 Sears sites slated to be opened in New York State by 2001 will be located in New York City, the ceo forecast.
Although he said it was too soon to specify how many full-line department stores Sears would launch in the city during that period, he did say, “We would like to add 10 full-line department stores to New York City and State by the end of the year 2000.”
In addition to the full-liners, Sears aims to roll out over 100 nonapparel, freestanding stores statewide by 2001, under such banners as Sears Hardware, National Tire Warehouse and Tire America.
The addition of 100-plus Sears stores is expected to bring the state more than 500,000 new jobs and boost sales tax dollars by $300 million, or 50 percent, Martinez said. It’s also projected to lift Sears’ sales by $1 billion a year and expand the chain’s selling space by 3 million square feet.
“I can assure you that Sears is here for the long run,” said Martinez, “and as a native, I can make a long-term commitment to the state and the city as one of our priorities.”
Charles Gargano, chairman of the Empire State Development Corp. and the state’s pointman on the Sears growth initiative, said he’d been working on a deal to bring Sears to New York City for over 40 years.
“Back when Arthur and I were both delivering the Brooklyn Eagle in Park Slope, he outdid me selling papers and bringing home tips,” Gargano said. “Although he had better streets to work than I did, even then I knew he was a man of commitment who could deliver.”