I’m not much of a follower of astrology and the signs of the zodiac, but I do know that 2011 is the Year of the Rabbit on the Chinese calendar.
It seems somehow fortuitous that speed and agility define a year that is all about economic recovery. And retail is moving forward at a rate that, while not exactly hare-like, is at least faster than the proverbial tortoise.
A report released in April jointly by the International Council of Shopping Centers and PNC Real Estate Research, entitled “U.S. Retail Real Estate Supply Conditions,” tracked and analyzed announced store closings and GLA for the fourth quarter of 2010. I realize at first blush that a report about contraction might not illustrate forward progress, but it suggests that retailers were focused on right-sizing in 2010. And a streamlined ship can travel at a much faster clip than a tug boat hauling excess cargo.
According to the report, Blockbuster and Talbots led announced store reductions in the final quarter of 2010, accounting for 41% of total store closings with 182 and 100 units to be shuttered, respectively. A.J. Wright, a division of TJX Cos., announced 71 store closings in 4Q, Duckwall-ALCO closed 44, regional furnishings player Lack’s closed 36, Borders closed 17 stores, and discount department store chain Loehmann’s announced 15 closings and declared bankruptcy.
During the fourth quarter, some 700 retailers and restaurants announced expected closings, consisting of approximately 10.4 million sq. ft. and representing 0.07% of the total inventory of retail space within the United States. However, the report emphasized that the improving economy helped to spark stronger profitability in the retail sector as a whole — and that occupancy is beginning to trend higher as more retailers are cautiously returning to expansion.
Chain Store Age’s April/May issue — with the annual real estate section geared toward the ICSC’s RECon 2011 show in Las Vegas held May 22 to 25 — underscores the idea that talk of expansion has supplanted contraction discussions in retailer corporate staff meetings. In our development coverage, beginning on page 34, we highlight the top 12 developments to open in 2010, among them the massive Peninsula Town Center development in Hampton, Va. The developers of Peninsula Town Center — as did all of the shopping center companies interviewed for the story — talked about successful leasing in a recovering economy.
“We opened Peninsula Town Center in the most challenging retail environment in our lifetime, with the two highest-volume department stores in the metroplex, over 70 specialty stores and 13 restaurants and a movie theater,” said Anne Mastin, executive VP leasing for Steiner, codeveloper on the project. “This was an amazing accomplishment in light of the economic climate of 2010.”
There is good reason to be hopeful that next year will show even more progress. For fun, I checked the Chinese calendar: 2012 is the year of the Dragon. I like the sound of that.