REAL ESTATE

Department store retailer plans $40 million investment in remodels, new stores

BY Marianne Wilson

Not all department store retailers are closing stores.

Charlotte, North Carolina-based Belk said it plans to open three new stores, part of a nearly $40 million investment in store remodels, capital improvements and new store openings in 2017.

The first two of the new stores will open on October 11, 2017, at Mullins Colony shopping center, Evans, Georgia, and at Greenwood Mall, Bowling Green, Kentucky. The third store will open in 2018, at Valley Mall Hagerstown, Maryland. The new stores will focus on the customer experience through a variety of ways, including a "buy online, pick up in store" service, phone charging stations and a service desk at the store entrance for quick, convenient access to services such as gift wrapping, returns and Belk Rewards Card payments.

In 2017, Belk also plans to remodel 12 existing stores across its 16-state footprint, an investment of nearly $10 million. An additional $15 million in funding will be used for capital improvements such as parking lots, paint and roofing.

"We've been successful in making a personal connection between our brand and our customers," said Lisa Harper, CEO, Belk, which operates 292 stores. "Our customers truly believe they know us and we are a part of their community; and they feel Belk is their store. We want to provide that level of personal connection in every community we enter."

Harper, the former CEO of Hot Topic and Gymboree Corp., took the reins of privately owned Belk in July 2016, becoming the first one outside the Belk family to run the company. She succeeded the retiring Tim Belk, who had served as CEO of the chain since 2004.

Belk was founded in 1888 by William Henry Belk. The long-time family-owned company was acquired by Sycamore Partners in a $3 billion deal at the end of 2015.

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REAL ESTATE

Chinese mall installs ‘husband pods’

BY Al Urbanski

Finally, an experiential retail breakthrough for the guys!

The 3 million-sq.-ft. Global Harbor Mall in Shanghai, one of Asia’s largest, has installed “husband pods” to keep men occupied while their wives or other domestic partners shop.

Each pod is padded out with a comfortable gaming chair, state of the art monitors, computer, and gamepad where the retail-weary can while away an hour playing vintage games from the Nineties.

For now, the service is free, but mall staff told the BBC that players will soon have the option to pay for premium games.

The lavish Global Harbor Mall, a lavish Italian Renaissance-inspired structure, sits at the base of a two-tower office, hotel, and residential complex in central Shanghai.


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Build-A-Bear Workshop narrows its loss in Q2, plans new stores

BY Deena M. Amato-McCoy

While Build-A-Bear Workshop continues to navigate amid declining store traffic, the company continues to open new stores.

The specialty retailer will return to Manhattan this fall, opening a location next to the Empire State Building. The new store, which is near where Build-A-Bear previously operated a temporary location, is expected to draw from both the local shoppers and tourists that frequent the area.

However, it is the chain’s smaller format concourse locations that are paying off in a challenging retail environment. Called concourse shops, these smaller stores require less capital, shorter term leases and, at approximately 200 sq. ft., they are driving “higher sales per square foot than at traditional mall stores,” Build-A-Bear CEO Sharon Price John said in an earnings call with analysts Thursday.

Despite these gains, the company had a net loss of $1.5 million, or $0.10 per share for the second quarter ended July 1. This was compared to a net loss of $4.3 million, or $0.28 per share, in the fiscal 2016 second quarter. The adjusted net loss was $2.3 million, or $0.15 per share, compared to an adjusted net loss of $3.7 million, or $0.24 per share, in the fiscal 2016 second quarter.

Total revenues were $77.2 million, an increase of 2.8%, compared to $75.1 million in the fiscal 2016 second quarter. Consolidated comparable sales declined 0.9%. This included a 1.5% decrease in North America, and a 2.2% increase in Europe. Consolidated comparable e-commerce sales increased 13.3%, following an 11.7% increase in the fiscal 2016 second quarter.

During the second quarter, the company opened 23 new stores, closed six locations and remodeled or reformatted 16 stores. The company also added 17 concourse locations in the second quarter. As of July 1, the company operated 353 company-owned stores — including 93 Discovery format stores — with 293 locations in North America, 59 in Europe and 1 in China. The company’s international franchisees ended the period with 88 stores in 11 countries.

“We are pleased to report top line growth as well as expansion in merchandise margin and gross profit margin enabling us to narrow the pre-tax loss in this year’s second quarter,” Price John said.

“While we had a marginal decline in consolidated comparable sales, primarily due to continuing retail traffic challenges, this was more than offset through the successful implementation of our diversification strategies, including the positive impact of the opening of more productive Discovery format stores and a new, innovative concourse shop model, as well as revenue from alternative sources, including experiential wholesale, international franchising and outbound licensing,” she added. “We expect the continued disciplined execution of our stated strategies to move us toward our long term goal of sustainable profitable growth.”

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