DDR launches effort to recapture anchor stores
Beachwood, Ohio – Shopping center operator DDR Corp. is commencing a multi-year proactive lease termination initiative aimed at recapturing high-quality anchor store locations across its portfolio. Through this initiative, DDR is collaborating with retailers in the books, electronics, toys, office and traditional department store categories to right-size their real estate footprints by regaining control of locations in advance of natural lease expiration.
DDR seeks to remerchandise its prime assets with market-share-winning tenants while realizing mark-to-market rental upside of 30%-40%. During the first phase of this initiative, DDR has identified 90 anchor locations, representing 3.3 million sq.-ft. of prime retail space. Of these leases, DDR has finalized terms to recapture 21 locations, representing 550,000 sq.-ft. primarily located in Boston; Cleveland; Denver; Orlando, Florida; Phoenix; Raleigh, North Carolina; and San Antonio.
"This initiative demonstrates our ability to create organic growth opportunities for our best-in-class retail partners regardless of current portfolio leased rate,” said Paul Freddo, senior executive VP of leasing and development for DDR. “Recapturing below-market leases represents an incremental growth opportunity to upgrade asset-level merchandise mix and NOI growth profiles, while simultaneously expanding redevelopment opportunities that will further enhance the quality of our portfolio.”
Survey: Web users don’t protect privacy
Yonkers, N.Y. – Sixty-two percent of U.S. online consumers have done nothing to protect their privacy on the Internet. According to a recent national Consumer Reports survey of 3,110 adults, one-in-seven online consumers were notified that their personal data had been breached in 2013, a 56% increase from 2012, and a projected 11.2 million people fell for e-mail phishing scams, up 22% from the previous year.
"The most effective defense against an international onslaught of shadowy hackers is being a well-informed and vigilant individual," said Glenn Derene, electronics editor for Consumer Reports. "It should be clear by now that consumers can’t rely solely on institutions to safeguard their valuable personal information online. Our report identifies some tools that can help people shut the door on cyber criminals."
Taxes reduce Fred’s Q1 net income
Memphis, Tenn. – Fred’s Inc. cited higher income taxes as contributing to declining net income in the first quarter of fiscal 2014. Net income totaled $6.1 million, down 46% from $11.4 million in the same quarter in the previous year.
Fred’s total sales for the first quarter of fiscal 2014 were $498.3 million, down slightly from $501.5 million for the first quarter last year. Same-store sales for the quarter declined 1.9%.
"As we outlined in our April sales release, the first quarter was a challenging period for Fred’s due to a number of headwinds,” said Bruce A. Efird, CEO. “These challenges included intense competitive promotions and poor weather throughout much of the spring, which affected general merchandising. In addition to the sales impact of these issues, we also encountered extraordinary inflationary pressures on generic drugs in the first quarter, as we forecasted in our year-end 2013 press release.”
Fred’s is planning an overhaul of its stores and marketing strategy that includes a new front end, adjacencies and fixtures in late June, with substantial completion early in the fourth quarter and the balance in first quarter 2015. The store layout will better serve the needs of shoppers making convenience-based trips, which Fred’s sees as an area for growth.