A Look Ahead to ICSC New York Deal-Making
As the International Council of Shopping Centers’ New York Deal-Making Conference in New York City quickly approaches, it seems appropriate to zero in on the world’s No. 1 retailing market. Chain Store Age talked with Ivan Friedman, president and CEO of New York City-based RCS Real Estate Advisors about the Dec. 5-6 conference, and the state of retail in the Big Apple and its surrounding region.
What are your thoughts on the upcoming NY ICSC show?
I think it’s going to be very robust this year. I know a lot of people who are looking forward to attending. There’s some real pent-up energy out there, making retailers eager to do deals. However, I don’t think they’ll be doing as many deals as they’d like to. For the most part, the deals that are getting done are primarily in the “A” locations, the “A” malls and high-traffic street areas. Retailers are really focused on being in the best places where they can do the most business. Right now, those are the areas with the least amount of vacancies and the highest rents.
What is the current state of retailing in the NYC area?
The hot spots today are Times Square, Soho, 34th Street, 14th Street, the Upper West Side and Madison Avenue. Retailers want to be in these areas because business is strong. But, space is very limited and rents are high on what little space is available. In fact, a recent report revealed that Fifth Avenue has the highest rents in the nation per square foot.
What is the state of retailing in the northeastern quadrant?
The major metropolitan areas are doing fairly well. Retailers have gotten good at controlling their expenses and are experiencing steady profitability. We’ve been seeing small positive comps over the last few months, so overall, things are good.
General comments/expectations for 2012?
Retailers are really paying attention to their real estate and are being proactive on fixing any underperforming locations. I think we’ll see a lot of retrenching in 2012. Retailers that are doing well and are profitable will be cautious on their expansions and will remain reserved on their optimism. For those who aren’t doing well, it’s likely they will continue to decline. I think there will be a number of out-of-court restructurings happening next year. And, retailers will remain focused on optimizing their real estate.
Hibbett Sports Q3 profit up 27%
Birmingham, Ala. — Hibbett Sports Inc. said that its third-quarter profit jumped 27%, amid strong demand for shoes and apparel. The results beat Wall Street expectations and Hibbett raised its earnings forecast for the full year.
For the quarter ended Oct. 29, the sporting-goods chain reported net income of $16 million, up from $12.6 million in the year ago period. Sales increased 11% to $185.2. Same-store sales rose 7%.
Out-of-stock drives customers out the store
CHICAGO — Heading into Black Friday weekend, retailers would be wise to make sure their shelves are fully stocked. According to a study by Harris Interactive on behalf of Galleria Retail Technology Solutions, a provider of retail and category optimization solutions, nearly 70% of U.S. adults would avoid shopping at a retail store if they encountered empty shelves.
The study, conducted between Nov. 3 and Nov. 6 2011, surveyed a random sample of 1,021 U.S. adults regarding retail store loyalty. The survey also found that women are more likely than men to avoid shopping at a particular retail store if they encounter empty shelves during their visit.
“As we approach Black Friday and the holiday shopping season, retailers need to note that making sure their shelves are fully stocked is critical when it comes to retaining loyal customers,” said Bryan Eckhoff, EVP sales and account management for North America for Galleria. "The cost of empty shelves can be extremely high. Out-of-stocks can force consumers to migrate from a particular store, risking the loss of the value of an entire shopper’s basket, not just one product. Consistent out-of-stocks may force the permanent loss of that customer.”
The survey also found that U.S. adults would avoid a store due to long check-out lines (64%), desired items being out of stock (63%) and difficulty finding desired items (62%).