- Real Estate
- Food & Drink
May 21, 2018
Judged on its own merit, Younkers wouldn’t be leaving The Empire Mall.
The store is in the top 10 percent for sales companywide, mall officials said.
“It will be one of the last to close,” said Kirsten Schaeffer, the mall’s director of marketing and business development. “We’re hearing August, but they will be around a while.”
That is a common theme at The Empire, which regularly draws shoppers from hours away and boasts multiple stores among the top performers in their companies.
The strong track record makes the upcoming Younkers vacancy an opportunity for some of retail’s emerging concepts.
“All the properties we own are where retailers want to be, and when we have openings, I think Empire is a good example. There are stores that want to get in because they know it’s a great property,” said Les Morris, director of corporate public relations for mall owner Simon Property Group.
Simon has a significant presence in Las Vegas during the four-day annual RECON conference, put on by the International Council of Shopping Centers. It begins today and likely will result in the same kind of deal-making that allowed The Empire to recently announce Forever 21 and Firehouse Subs will be opening later this year.
It has been a good year so far for Simon, the world’s largest retail real estate company, which reported better-than-expected earnings for the first quarter.
“Retailers are performing better following a strong holiday season and decent start to the yer. Demand is picking up for our space and traffic and sales are up,” CEO David Simon said in a conference call with investors.
Space that used to be occupied by struggling big-box retailers such as Sears has started to be filled.
“We’re repositioning at various locations into new shops and restaurants, fitness in some places, entertainment, and we’re doing that throughout the portfolio,” Morris said.
“It’s really exciting. I can’t think of a period when we’ve had so much great stuff going on.”
A look at what’s filling former department store spaces throughout Simon’s portfolio shows great variety.
A T.J.Maxx and HomeGoods is filling a former JCPenney in Louisiana. The grocery store Fresh Thyme is replacing a Sears in Indiana.
In some properties, former Sears stores are being carved up for multiple tenants. In Wisconsin, the space will be split between Dick’s Sporting Goods and Round1, an entertainment concept offering bowling, arcade games and other activities.
In Florida, Sears will divide into a PetSmart and a Lucky’s Market, a specialty grocery store.
LifeTime Athletic, a growing health club chain, is repurposing a Sears in California and taking the place of JCPenney in Edina, Minn., with a three-story fitness center featuring a rooftop swimming pool.
There is some activity from traditional department stores too. Dillards is expanding its presence at a mall in Texas to take a former Sears space.
While it doesn’t show up on the Simon list, Iowa-based Von Maur also is gradually expanding. It’s scheduled to open in a former Sears in Grand Rapids, Mich., next year and took the place of a Nordstrom in Georgia two years ago.
“When the whole Bon-Ton thing came out, the initial reaction was everybody was really worried,” said Greg Maloney, CEO of JLL, the nation’s third-largest third-party retail manager.
“But when you look at the malls they’re in, some of them are very productive malls. Landlords are welcoming getting those spaces back because they want to redevelop it and turn it into something different.”
In Class A malls such as The Empire, the approach can vary. Some department stores are being demolished, while others are being renovated.
“We can take a shopping center and bust it up and put a power center or strip center element, and we’ve done that with movie theaters and grocery stores,” Maloney said. “It has to be the right property.”
His firm found that a variety of uses filled a sampling of former Sears and Kmart stores, led by apparel and accessories, and followed by dining, food and entertainment.
Some department stores will benefit as others wind down, noted Garrick Brown, vice president of retail intelligence for brokerage firm Cushman & Wakefield.
“If Sears goes down this year, JCPenney will probably be the biggest beneficiary,” he said. “They got into the appliance business 18 months ago mainly because they know appliances are Sears’ strongest point. It’s the only thing keeping them afloat. And they’re preparing for that void.”
The Empire Mall has shown a capacity to rebound strongly as tenants are lost to bankruptcy, Schaeffer said.
She points to lululemon, which is committing to a long-term lease for the former Wet Seal space after testing the market last year.
“I would say the majority of the public is happier to have lululemon here,” she said. “The vacancies that happen because a store is going bankrupt is an opportunity for us to get other stores into the mall. Retail is changing, and we’re always looking for the latest and greatest.”
Want a sense of what might fill the soon-to-be vacant Younkers space at The Empire Mall? Look at what’s going into similar spaces around the country.