One of the interesting retail real estate trends I’ve been seeing pick up steam in the last couple of years is the willingness of many retailers to look beyond the traditional mall locations. Many are choosing locations on “hot streets,” bustling avenues within major communities that happen to be the retail hub, or in the […]
Jeff Green
Will Staples, Office Depot Merger Cause More Brick and Mortar Closings?
Keith Loria / Commercial Property Executive – Staples, Inc. has agreed to acquire box-store rival Office Depot for $6.3 billion, with the combined companies expected to better compete with e-commerce and other office supply competitors in the market.
Combined, the two companies represent $39 billion in annual sales from more than 4,000 stores. Staples was already the largest office-supply superstore, while Office Depot merged with OfficeMax Inc. in February 2013, the second- and third-largest at the time, to consolidate and save on costs.
“This deal just goes to show you how ‘inflated’ the office supply category is. First Office Depot purchases Office Max, and even before they can reposition that acquisition they are sold to Staples,” Jeff Green, president of Jeff Green Associates, told Commercial Property Executive. “That being said, Staples has always been the leader of the office supply category.”
Of course, the two companies tried a merge once before—back in 1997—but that deal was struck down by the FTC for being anticompetitive. Still, most analysts expect this transaction to go through.
“Closing conditions allow Staples an exit strategy should antitrust authorities require the divestiture of stores. Staples is focused on growth but may opt out and the deal may not transact,” Michael Lagazo, senior advisor, Retail, with commercial real estate advisor Sperry Van Ness, told CPE. “For Staples, it means benefits from cost savings, the ability to expand product offerings including growing their delivery business, and achieving monopolistic pricing power.”
Lagazo spoke with Kevin Reilly, Staples’ director of real estate in Costa Mesa, before the announcement and said it could take roughly nine months before any Staples or Office Depot stores hit the market for disposition.
Nordstrom could save Southgate Mall, but opening is unlikely
Justine Griffin / Herald-Tribune – It’s a rumor that began as an offhand comment from one retail developer to another. But it took on a life of its own from there. The possibility of Nordstrom, the Seattle-based, high-end department store chain, coming to Sarasota County was too good to keep quiet for too long. But […]
Canned Ham Vintage hopes to fill Sarasota niche
Justine Griffin / Herald-Tribune – Ashley Rogers’ face lit up as she watched a young girl, maybe 10 years old, fawn over a pair of vintage ladies gloves she was selling at an indie craft fair in St. Petersburg. Rogers, the owner of Canned Ham Vintage in Sarasota’s Rosemary District, used to be that little […]
Retail Rap: You Win Some, You Lose Some
Overall holiday shopping season sales numbers have been rolling in, and the news confirms what many retail real estate analysts (including myself) suspected: 2014 holiday sales were strong. Nothing earth-shattering — but plenty good enough to chalk this one up as a win. As we chat about in this installment of Retail Rap, there were some bright and not-so-bright spots (December sales were weaker than expected, for example, and numbers didn’t hit some of the more optimistic overall projections), but the takeaway is that we did see the anticipated increase that the industry was looking for. The aggregate figures are generally all up above 3.5% for the period, and several reports came in closer to 4%. The National Retail Federation announced that sales were up 4% to a total of $616.1 billion — a figure which represents the biggest year over year increase since 2011.
The interesting story here is less about the headline number and more about what we see when we peel back the layers of the onion: the category- and brand-specific dynamics that tell us who were the holiday winners and who were the holiday losers in a few select areas including teen fashion and a mixture of popular department stores.
Join me in this edition of Retail Rap and as always, I’d love to hear what you have to say.
About 70 percent of the world’s chains are adding stores this year, offering a big endorsement of physical retail.
Steve McLinden / Shopping Centers Today – Not only are this year’s expanding retailers scrambling to keep pace with the fastest-changing industry landscape in history, they are also squaring off against increasing numbers of global competitors. Absent from most of today’s business models are any expansion-by-saturation strategies and the old cookie-cutter store formats; in their place are microdemographic site selection, creative use of smaller spaces and multichannel digital presentations.
Armed with these new approaches and working from a relatively robust 2014, retailers and restaurateurs are projecting their expansion visions and initiatives worldwide, observers say. “The world of retail is changing quite dramatically,” said Michael Hirschfeld, senior vice president of national retail tenant services at third-party mall management firm JLL. Improvements in distribution channels and web offerings are giving tenants broader geographic and branding opportunities, he says. “Some of our smaller, emerging clients may go into the U.S. West Coast with their first stores, but may choose London for their second, and Tokyo for their third.”
