Report: FAO Schwarz looks to extend Fifth Avenue lease
New York City — FAO Schwarz is seeking to extend the lease for its flagship store in Manhattan, almost three years after the landlord Boston Properties said the retailer would likely have to leave, Bloomberg reported. The store is located in the General Motors Building, on Fifth Avenue at the corner of 58th Street.
Toys “R” Us, parent of FAO Schwarz, in January exercised a five-year option in its lease, according to Bloomberg, that enables the tenant to extend the lease at fair-market value for five years. It had been set to expire in 2012. The two parties are now in arbitration over the rent for the store.
The article noted that the extension would save Toys “R” Us from looking for an alternative Manhattan location at a time when retailers are paying record prices for the city’s most-trafficked areas. But it also means that Boston Properties would lose the change to market approximately 60,000 sq. ft. of prime space in the world’s most expensive shopping district.
Boston-based Boston Properties, which bought the 59-story GM Building in 2008 for $2.8 billion, declined to comment in the report.
The three-level FAO store is across the street from Central Park and the Plaza Hotel. It is located on a stretch of Fifth Avenue that has an average asking rent of $1,850 per square foot, exceeding Hong Kong’s Causeway Bay shopping district’s $1,664 per square foot as the world’s most expensive, according to a September report by Cushman & Wakefield.
Golf Town in U.S. debut with five stores in greater Boston
Toronto — Canadian golf retailer Golf Town said Thursday it has opened its first five stores in the United States, all located in the greater Boston area.
The $25 million U.S. market expansion includes stores in Avon, Bellingham, Reading, Seekonk and Watertown, Mass., all of which opened on March 24 and total about 100,000 sq. ft. A sixth store is slated to open in Northborough, Mass. in the fall.
Golf Town sells golf apparel and equipment in an interactive environment that features simulators, putting greens and on-site pro shops. It is Canada’s largest golf retailer, operating 52 superstores, averaging 18,000 sq. ft. each, throughout the country.
Small format competition heats up
Walmart’s small format desires certainly haven’t gone unnoticed by the folks at Dollar General, a company that appears bent on saturating the marketplace with small discount stores. Last year, Dollar General opened 600 new stores and remodeled or relocated 504 other stores to end its fiscal year with 9,372 stores. This year, more of the same is planned with the expansion figure getting a bump to 625 new units, while the number of remodels and relocations expands to 550 units. If new store growth unfolds as planned by this time next year Dollar General will have roughly 10,000 stores in 35 states and even greater overlap with Walmart.
As the company noted in its press release announcing record annual sales of $13 billion no retailer in America has more store locations. The company also clearly states that it sells products from America’s most-trusted manufacturers such as Procter & Gamble, Kimberly-Clark, Unilever, Kellogg’s, General Mills, Nabisco, Hanes, PepsiCo and Coca-Cola. If the strategy behind Walmart’s small-format initiative in rural areas is to combat the likes of Dollar General it’s got some catching up to do and Dollar General isn’t sitting still.