REAL ESTATE

CBL’s long-term growth strategy

BY Michael Fickes

Chattanooga, Tenn. — In an April 11 conference call, CBL & Associates Properties provided an in-depth review of its business strategy, including a number of initiatives designed to enhance shareholder value.

On the conference call, the Company outlined the following goals and objectives through a slide presentation:

Position the portfolio to produce sustained same-center net operating income (NOI) growth of 2-4%, about double the current range of 1%-2%;

Increase the percentage of Mall NOI generated from tier 1 and tier 2 assets from 78% for 2013 to more than 90% over the next several years through divestitures of lower productivity assets and investments in higher growth assets;

Proactively take advantage of opportunities to upgrade both mall shop and anchor retailers through value-added redevelopment and ongoing re-tenanting;

Maintain and enhance the strength and flexibility of the company’s balance sheet including growing the quality and size of the unencumbered asset pool and further improving key financial metrics.

A copy of the slide presentation and a transcript of the prepared remarks will be filed with the SEC and available online at cblproperties.com.

A replay of the conference call will be available through May 6, by dialing (800) 633-8284 or (402) 977-9140 and entering the confirmation number, 21708955.

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REAL ESTATE

Divaris signs Tex-Mex restaurant, Red Wing Shoes

BY Michael Fickes

Richmond, Va. — Divaris Real Estate has announced the signing of two retail leases in the greater Richmond suburb of Midlothian.

Tex-Mex restaurant Chuy’s has leased 7,449 sq. ft. in the Village at Swift Creek in Midlothian. The Richmond office of DRE represented the landlord, Swift Creek Associates. This will be Chuy’s second Richmond location. Chuy’s will join Guitar Center, Babies “R” Us, TGIF, Red Lobster and Cracker Barrel in the development.

Red Wing Shoes has taken 4,800 sq. ft. in the DRE-leased and –managed Midlothian Crossing on the Midlothian Turnpike in Richmond. DRE represented the landlord, Midlothian Associates, in the transaction. Red Wing will join Big Lots, Goodwill and Family Dollar.

Divaris Real Estate, Inc. is headquartered in Virginia Beach, Va., with offices in Newport News, Norfolk, Richmond and Roanoke, Va.,; Charlotte, N.C.; and metropolitan Washington, DC.

Divaris Real Estate is a member of Realty Resources, a national group of independent retail property brokers and managers, covering 91 major markets throughout the U.S.

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News

Amazon Dash Brings the Store Home

BY Dan Berthiaume

A few months ago, Amazon.com made a disruptive splash in the world of home delivery with the announcement of its drone project. The new Amazon Dash mobile ordering device for AmazonFresh customers may not be as attention-grabbing as unmanned aircraft bringing goods to your door, but its potential to disrupt how consumers select and purchase items is much greater.

First, a brief Amazon Dash primer. Dash is a portable wand-shaped device that allows users to automatically add items to their AmazonFresh shopping lists. Customers can scan items with the gadget, or speak them into a microphone for voice-based search. It reportedly recognizes more than 1 million items for sale on AmazonFresh and Amazon.com.

The idea is as soon as a consumer runs out of a replenishable item, like a gallon of milk or box of cereal, they use Dash to automatically enter it on their AmazonFresh shopping list, eliminating the need to go to the store to replace it. Take a moment to digest what this potentially means to paradigm of shopping for consumer goods and then read on.

The Home as Physical Store
E-commerce turned the home into a virtual store a long time ago, which has been a driving factor in the rise of omni-channel and seamless commerce in recent years. But Amazon Dash turns the home into an actual physical store where the products consumers buy are tangibly present.

It’s one thing to have to remember to go and add an item to an online shopping list, but quite another to scan it or add it by voice as you are looking at it. The consumer’s cabinet becomes the physical shelf, eliminating the need to visit the shelves in a brick-and-mortar store. Which leads to…

The Death of Incremental Sales
Retailers owe a good chunk of their profitability to unplanned, incremental sales. A customer who visits a store to buy a gallon of milk realizes when they get there that a box of cookies would go great with that milk, or notices a great sale on peanut butter as they approach the milk aisle.

In addition to stealing sales on items consumers plan to buy from brick-and-mortar retailers, Amazon Dash also kills off opportunities to reap incremental sales. That’s a one-two punch many brick-and-mortar stores might have a tough time recovering from.

Brand Loyalty Comes Back in Vogue
Brand loyalty among consumers is weaker than it used to be, resulting from factors such as increased price sensitivity and consumer overexposure to marketing. But a consumer who automatically replenishes goods with the wave of an Amazon Dash wand will inherently become brand loyal, out of simple convenience. This is good news for leading brands, not so good news for newer or less popular brands, or retailers running brand promotions.

What To Do
So what should brick-and-mortar retailers do to respond to this new threat to traditional store-based retailing? Right now Amazon Dash is only available by invite to members of the AmazonFresh program, which serves consumers in Southern California, San Francisco and Seattle. Suffice it to say brick-and-mortar retail will not be “dashed” to ruin anytime soon.

But Amazon Dash represents a larger trend of the continuing erasure of boundaries among brick-and-mortar, online and mobile. It effectively blurs all three of these major retail channels into one unified experience. That is the direction brick-and-mortar retailers need to start heading, if they haven’t already, because Amazon Dash is disruptive today but will represent the norm in the not-so-distant future.


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M.Myers says:
Apr-15-2014 12:28 pm

Why not a mobile app?

I'm a little perplexed by Amazon's decision to create a new device to scan items and translate spoken words into items. Why not create an app or extend their current apps to handle this? As we all know, most everyone has their phone with them at all times, picking up their phone and scanning an item is no more difficult than using this new wand. In addition, item scans could happen outside the house to bring even more potential sales to Amazon when consumers interact with products they may see at a friend's house or in a store. Maybe I'm missing the point but it seems shortsighted to create a new device to handle what is already being done in many apps out there today.

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