07 March 2013/24 Raby’ ath-Thani 1434/17 Esfand 1391
The latest report from commercial real estate analyst, CoStar Group, says store closings for the United States are not going to stop anytime soon.
Regarding Sears Holdings, CoStar Group says between 2006 and 2011 about 150 Kmart and Sears stores were closed. But that accelerated in 2012, with about 150 stores closed in that single year, and more closings are coming!
Sears Holdings chairman, Edward Lambert, blames competition from the internet, but also admitted that there’s money to be made closing down stores and eliminating jobs: “We (also) are able to realize the value of the real estate in situations where we own the stores or where the lease terms are attractive to third parties.”
Mitchell S. Klipper, CEO of Barnes & Noble, says they will continue closing stores: “We have historically closed 12 to 20 stores each year over the last 10 years, averaging 15 stores a year. That will not change.”
Best Buy president and CEO, Hubert Joly, said closing stores is part of Phase One of its plan which involves “optimizing” its real estate. That’s code for making money off selling property: “Occupancy cost reductions continue to be a key focus, and we make significant progress in fiscal 2013 [calender year 2012] in both the area of store closings and re-negotiated leases. In fiscal ‘13, we permanently closed 49 large-format stores and expected to close an additional five to 10 large-format stores in fiscal 2014 [calendar year 2013].”
Radio Shack, which had a $63 million USD loss for 2012, said they will consider closing stores as the leases expire: “It doesn’t make a lot of sense to look at store closures, unless there’s a lease end in play. We’ll continue to go through that review. But where our opportunity and our focus really has been trying to find stores that are borderline profitable and turning them into higher producing stores. That’s really where our focus is right now.”-Joseph C. Magnacca, CEO
To juxtapose, Walmart says they plan on expanding their ‘brick & mortar’ operations around the world: “Supercenters remain our primary growth vehicle, and we will continue to expand this format to drive share. During the year, we opened 129 Supercenters, including new stores, expansions, relocations, and conversions. We plan to expand our Supercenter fleet next year by adding approximately the same number of units.”-William S. Simon, CEO and president
As is Kohl’s, even though they have closed stores as well: “Our current plans are to open 12 stores in 2013, nine in the spring and three in the fall. Consistent with 2012 new stores, we expect all but one of the 2013 stores to be small stores, with less than 64,000 square feet. We remodeled 50 stores in 2012, and we expect to remodel 30 stores in 2013. Most of these remodels are expected to occur in the fall season.”-Kevin Mansell, chairman, CEO and president