ANew Grove to Grow in Florida
Echo Real Estate Services, Pittsburgh, and Cornerstone Real Estate Advisors, Hartford, Conn., have broken ground on phase one of the Grove at Wesley Chapel, a specialty complex featuring retail, restaurant and entertainment offerings, and located along the west side of Interstate 75 in Wesley Chapel, Pasco County, Fla. The first phase of 327,666 sq. ft. is slated to open this fall.
Grove at Wesley Chapel will feature a 16-screen Cobb Theatre megaplex that offers an upstairs full-service restaurant, bar, lounge and concierge service—in addition to the traditional theater experience on the main level. The 74,000-sq.-ft. theater is slated to open in spring 2008.
Retail commitments include Bed Bath & Beyond, ULTA and Dick’s Sporting Goods.
In Temecula, Calif., at Interstate 15 and Winchester Road, sits The Promenade Temecula, a newer, enclosed, 1,013,000-sq.-ft. mall that is expanding its offerings into an open-air, lushly landscaped, walkable outdoor destination featuring restaurants, a village square, pocket parks and a Main Street. Developed by Forest City Commercial Development, a unit of Forest City Enterprises, Cleveland, the lifestyle addition is slated for a spring 2009 completion. Existing tenants—Macy’s, Sears, J.C. Penney, Brighton Collectibles, Abercrombie & Fitch, California Pizza Kitchen, Edwards Cinema, Build-A-Bear and more—will be joined by Talbots, Ann Taylor and J. Jill in the 200,000-sq.-ft. outdoor lifestyle addition.
Note: The Promenade Temecula was originally featured in Chain Store Age’s special supplement on lifestyle centers in the March 2007 issue, but an incorrect rendering of the development was shown. Shown above is the correct image.
A half-century-old, outdated mall has been transformed into a new lifestyle destination, thanks to the redevelopment efforts of owner The Westminster Funds. Riverside Plaza, located in Riverside, Calif., today features California-style architecture with stucco buildings and tiled roofs and a Main Street plan accented by a citrus grove, bell tower and water features. Upscale tenants such as Regal Cinema, California Pizza Kitchen, Panera Bread, Chipotle Mexican Grill and Borders offer a lifestyle flair. The addition of a two-car trolley is the finishing touch to the 475,000-sq.-ft. center’s makeover.
Los Angeles’ Downtown Distinction
The 3.6 million-sq.-ft. Grand Avenue development in downtown Los Angeles is designed to create a high-impact, high-quality destination in one of the nation’s premier downtown cores. Comprised of a luxury hotel, a diverse mix of specialty retail and restaurants, public spaces and residential towers, the project is developed by The Related Cos., New York City. Phase one—1.2 million sq. ft., including 250,000 sq. ft. of retail—of development is slated to occur in conjunction with major streetscape improvements to adjoining sections of Grand Avenue along with the development of an adjacent 16-acre Civic Park event center.
The entire development will comprise nine acres on three city blocks, situated directly across the street from the Frank Gehry-designed Walt Disney Concert Hall.
Weekly Retail Fix
THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT
BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions. —
“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.
THE FIX: Differentiation would better help Sam’s
Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.
Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.
That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.
Weekly Retail Fix
THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%
WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers. —
Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.
Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.
THE FIX: Improved shopper experience ups comps
Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.
Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.
Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.
Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”
He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.
“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”