Gary Dinges/Austin American Statesman – “It’s like Toys R Us for adults.” That’s how David Trone describes Total Wine & More, the liquor store chain he co-owns. Founded in 1991, the Maryland-based company now has more than 100 locations coast to coast — including several in the Dallas-Fort Worth area and in San Antonio. After […]
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A Change in the Retail Scene
Justine Griffin/Herald-Tribune –
I’ve watched Southwest Florida’s retail scene change quite a bit in just three short years.
In 2012, new brands like Trader Joe’s and Costco Wholesale made waves when they moved into Sarasota. But the supermarket chains were just the beginning.
Nordstrom Rack was the answer to the prayers of many Southwest Florida shoppers when the outlet division of the big department-store chain took over the 35,000-square-foot Circuit City space at University Parkway and Interstate 75 a year later.
P.F. Chang’s took us all by surprise when the Asian-inspired chain went against the grain and opened a freestanding restaurant on Osprey Avenue instead of a location in one of the region’s upscale malls.
The $315 million Mall at University Town Center’s grand opening in October — this mall was more than six years in the making — brought a slew of high-profile luxury brands to the market for the first time. The Apple Store and The Cheesecake Factory are still packed nearly every day more than five months after their debut. Sarasota’s two-level Saks Fifth Avenue is the first department store the brand has opened in years, and is only the second in the country to house its own in-house restaurant, Sophie’s. Meanwhile, loyal customers of Crate & Barrel, H&M and Anthropologie waited paitiently (some in long lines) for the stores to open at the Mall at UTC.
“Sarasota was the next on the list in terms of expansions into new markets for many of the tenants at the new mall,” said Jeff Green, a retail analyst with knowledge of the Southwest Florida market. “And Taubman Centers is known for building centers with co-tenancy that they like.”
The debut of so many national and well-known brands signals a renewed confidence in the local economy, and the beginning of a transformation when it comes to shopping in Sarasota and Bradenton.
A handful of key retail destinations are emerging, and will continue to be defined over the years.
“New retail is popping up all over in parts of town that some may have questioned its viability in previous years,” said Barry Seidel, the president of American Property Group in Sarasota. “Some of them are changing the whole retail landscape.”
Maybe it’s because the region continues to attract new tourists in droves and is known for its robust and affluent snowbird community. The more accolades the region collects, the more retailers take note of the commercial real estate market and shopper demographic here.
“Sarasota makes sense for a lot of brands because of the snowbird market,” said Britt Beemer, chairman and CEO of America’s Research Group Ltd. “They care most about disposable income.”
Retailers are expected to open an estimated 77,000 stores in the United States during the next 24 months, the highest rate seen in five years, according to data collected by the International Council of Shopping Centers.
That means more new names are on the way here, too.
Bass Pro Shops announced it will open a store at I-75 and Fruitville Road in 2016. Free People is opening a store in the Mall at UTC this month. A Microsoft Store is coming soon after that. Wawa, the coveted gas station and convenience store brand, has three stores slated for Sarasota County and two in Manatee.
Westfield Southgate Mall will welcome a Cobb Cinebistro in 2016.
I’ve compiled a list of what I think were some of most important retail brands that have stood up to the hype since their Southwest Florida openings:
Trader Joes’s (2012)
Trader Joe’s opened what was then only its second Florida store on Tamiami Trail in Sarasota during late summer 2012. The opening drew customers from as far as Fort Myers and Orlando.
“The store is still packed every day,” Seidel said, “especially in season.”
Costco Wholesale (2012)
Costco Wholesale opened its first store in Sarasota County during the summer of 2012 in the shell of a former Dillard’s department store at Westfield Sarasota Square Mall. The Sarasota opening was one of the most successful in the history of the Issaquah, Washington-based chain.
Wawa (2014)
Wawa opened its first gas station south of St. Pete in Bradenton during December. The Pennsylvania-based chain has a cultish following similar to the superfans behind Trader Joe’s and Costco, and is known for its cheap gas and restaurant-quality sandwich bar. People showed up in droves for the Bradenton opening. Several more Wawas are slated for Sarasota and Manatee counties.
Apple Store (2014)
The Apple Store is easily one of the most sought-after brands in the country, and Southwest Florida Mac users were drooling for one. Rumors made the rounds that Southgate Mall was courting the iPhone and iPad maker years ago, but when the Apple Store announced it was coming to the Mall at University Town Center, it really put the 880,000-square-foot shopping center on the map.
Nordstrom (2013)
Southwest Florida residents hoped Nordstrom would return to the lineup of tenants for the Mall at University Town Center UTC, despite having abandoned plans to open here during the onslaught of the recession. While no Nordstrom department store is on the books just yet, an outlet store opened in late 2013 and continues to be a popular shopping destination.
“There was a time where Nordstrom would never open a rack store in a market where they didn’t have a department store,” said Green, the Phoenix-based analyst. “But that’s no longer the case.”
Crate & Barrel (2014)
This home furnishings chain is among the brands with the most cachet to open in the Mall at University Town Center. The company opened a two-story store in the new mall, ending many long trips for Southwest Florida residents who braved the drive to Tampa’s International Plaza for the store’s well known products.
“A lot of dollars were leaking out of the market when shoppers were headed to Tampa for some of these stores. Now they’re staying in Sarasota,” Green said.
Kate Spade (2014)
Designer Kate Spade’s handbags have quickly risen to be just as popular as other brands, like Michael Kors and Coach The bright and colorful store in the Mall at University Town Center has been a welcome addition to an outlet store in the Ellenton Premium Outlets.
P.F. Chang (2013)
Most of us have dined in a PF Changs attached to a mall, like at the Mall at Millenia in Orlando or Westshore Plaza in Tampa. Sarasota’s PF Changs is unique in that it is close to downtown in a freestanding building, not far from the bayfront and the affluent residents of the region’s islands and tourists.
Anthropologie (2014)
Anthropologie drew the same kind of response as the Apple Store and Crate & Barrel when fans found out the lifestyle brand was opening its first store in Southwest Florida at the Mall at University Town Center.
H&M (2014>
H&M, the Swedish apparel retailer known for its cheap prices for clothes, threw an opening party unlike any other inside the Mall at University Town Center UTC weeks after the retail center officially opened to the public. The two-story store attracts patrons of all ages. The chain has been expanding in Florida aggressively in recent years.
Tesla Motors (2014)
The Silicon Valley-based electric car company opened a showroom inside the Mall at University Town Center in October. The luxury vehicle maker has several cars on display and some available for a test drive in the mall parking lot.
Retail Rap: Sears Goes on a Selling Spree
It’s fascinating to me that, as of April 1, Sears went from being run like a REIT to being run as a REIT — at least partly. The Hoffman Estates, Illinois-based company formed a new REIT, Seritage Growth Properties, with the stated intention of raising a cool $2.5 billion by selling and leasing back 254 stores. Sears promptly began moving forward with those plans, and has since announced three separate deals to do just that with Macerich Co. (nine properties); General Growth Properties (12 properties) and Simon Property Group (10 properties). Deals like the ones that have been announced so far are certainly proving that Sears can make money by selling its assets, but the question is, why and to what end? In this week’s Retail Rap, I examine the strategic moves that Sears has already made and what this could mean for the future of the company.
On one hand, these deals have all been done quickly and announced almost simultaneously, which speaks to some level of strategic planning. On the other hand, we have yet to see any public sign that Sears understands and is attempting to address its liabilities as a retailer. What is the long range plan? It seems to me that the missing piece of the puzzle is any sort of statement of a new direction or big-picture strategy designed to turn around the retail portion of the business.
Now to be clear, Sears is still a very viable company in terms of its real estate holdings. That being said, I’d love to hear your thoughts on this installment of Retail Rap because it’s not entirely clear to me whether the decision to sell now isn’t part of a broader real estate strategy, or is at least in part due to the fact that Sears might feel like the time is right. I don’t know about you, but I’ll be watching with interest to see what Sears does next. Is this just the first step in a turnaround effort for this floundering retailer? How are they going to use the money? Is there a surprise in store? It will be interesting to watch and see what unfolds in the months and years ahead.
Sears, Macerich Make Headlines
Keith Loria/Commercial Property Executive – Sears Holdings Corp. has entered into a joint venture with The Macerich Co. as part of Sears Holdings’ continued efforts to enhance its financial flexibility and generate value from its real estate portfolio. This is the third joint venture Sears has made this month; after partnerships with General Growth and Simon Property Group, generating […]
Retail Rap: Silver Lining for Some Store Closings
In an article that appeared in National Real Estate Investor (NREI) Online on April 10, author Elaine Misonzhnik describes the recent store closure announcements from Walgreens and Pier 1 as part of a larger pattern of retailers “pursuing portfolio optimization and an omnichannel approach.” While I generally agree with that statement — and with the notion that increasing pressure from online sales growth is contributing to a more competitive brick-and-mortar environment — I was reminded once again of just how different the dynamics behind store closings can be. I think there’s a tendency to lump all store closings together, when the reality is much more nuanced and complex. Not all store closings are created equal, so for this week’s Retail Rap I wanted to break the recent announcements down into several different categories.
Take Walgreens and Pier 1, for example. These both fall into the portfolio optimization category of store closures. Even here, however, there are noteworthy differences. Walgreens has decided to close 200 stores, which may sound like a large number, but it’s only a drop in the bucket for a chain that operates more than 8,200 stores nationwide. As the NREI article mentions, Walgreens is also planning to open around 200 stores in the next year. To me this isn’t so much a series of closures as part of the healthy portfolio balancing process. Additionally, we haven’t seen many Walgreen’s stores close in a very long time — so in a sense Walgreens is “overdue”. Most likely, the stores that will close are burdened by a mediocre location, aren’t the right size, don’t have the prototype layout, or are lacking a drive thru pharmacy.
Another thing I wonder about (especially in light of the Sprint-RadioShack partnership, as discussed in this Retail Rap) is when two brands merge, until the official name change – do consumers know? Do they care? I think it will be fascinating to watch and see how this particular scenario plays out in the weeks and months ahead, how about you?
Retail Rap: Shacking Up
The end of a retail icon is always big news in commercial real estate, and it’s particularly relevant when the brand in question is closing more than 4,000 stores around the country. The retailer, of course, is RadioShack. There are a range of factors, as discussed in this Retail Rap, that have contributed to RadioShack’s downfall — brand identity and points of differentiation have eroded over the years, and in a competitive category where more and more electronics are being sold online (more electronics are sold on the web as a percentage of overall sales than in any other retail segment) — but one of the most interesting storylines in the wake of the company’s recent bankruptcy announcement is what happens next with those 4,000+ locations.
As for what types of retailers will be looking closely at these former RadioShack locations, I think we’ll see a mix of predominantly service retailers and fast casual dining concepts. Mobile phone companies, electronic game stores, and restaurant chains are all good candidates to fill those spots. Retailers that rely heavily on a high volume of everyday foot traffic will take a long look at RadioShack locations.
In the weeks and months ahead (now that you’ve read my take in this Retail Rap), as you head to work, go shopping, or go out to grab and bite to eat, take a moment to notice the RadioShack(s) in your area. I’d be interested to hear from you and find out what retail brands you see moving in to those spots. Do you see the same optimistic outlook for RadioShack sites?
