Retail’s Newest Pros
Aunique collaboration between a professional retail association and a major university may move lease administrators further into the real estate industry spotlight.
The National Retail Tenants Association (NRTA) and Boston University (BU) have announced the expansion of the college’s real estate certificate program to include lease-administration classes. The first of these courses, which launched on April 12, is entitled “Methods and Techniques of Commercial Lease Abstracting” and is being taught by Rick Burke, president of Marblehead, Mass.-based Lease Administration Solutions and a founding member of the NRTA.
According to executive director Paul Kinney, the alliance between NRTA and Boston University is one that will have long-term ramifications for current and future lease administrators.
“For years the NRTA has discussed creating a lease-administration certification program,” said Kinney. “Certifying lease administrators will not only allow real estate professionals to advance their knowledge in the area—and have those advancements be measured and certified—but also will further raise the credibility of the profession as a whole.”
Lease administration didn’t get much attention before the NRTA was formed 12 years ago. Thanks to the dedicated efforts of the association to develop interest in the field, deliver as much learning as is possible in an annual conference and regional meetings, and keep its membership current on the latest technological advancements, practitioners have begun earning much-deserved recognition within retail.
And now BU has recognized lease administrators, as well. According to Ruth Anne Murray, director of the BU Center for Professional Education, the university took notice of the profession because of its impact on retail and other industries, and also because it was wide open in terms of advanced education.
“We like to be trailblazers,” said Murray. “One of the main criteria before launching a new program is that the need is not being addressed by someone else.” BU’s current real estate certificate program encompasses commercial real estate, finance and facilities management. Lease administration will be an adjunct to those courses.
The NRTA is charged with creating the curriculum, which will consist of approximately six courses of 20 hours each (at a cost per course of $595), under the guidance of BU. Both groups expect that the first year will be spent firming up the courses—“Commercial Lease Administration Fundamentals” will launch this September, followed by classes on lease auditing and due-diligence procedures. Simultaneous with the creation of the various courses, the NRTA will outline the certification program. While the details haven’t yet been decided, the plan is to hold the final exam in conjunction with the NRTA’s conference each year.
“My vision is that, by next year or the year after, we will offer the exam on either the day before the conference or the day after,” said Kinney. “Our hope, too, is that once someone earns certification, one of the ways that certificate will remain valid is by attending the NRTA conference at least every two years.”
The NRTA’s vision transcends certification. The ultimate goal is to offer the courses online, making advanced studies available potentially worldwide—and not just to those who can attend classes at BU once a week.
Because BU currently offers online course work, the path to online lease-administration certification isn’t expected to be a difficult one. “Step one is to measure how well the first courses are received,” said BU’s Murray. “Step two will be rolling out the entire certificate. Based upon the reaction to that, we will start talking about online.
“If a year from now we have developed the program—and it’s very successful—bringing it online will be very easy.”
For more information about the BU lease-administration certificate program, visit www.retailtenants.org.
Weekly Retail Fix
THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT
BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions. —
“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.
THE FIX: Differentiation would better help Sam’s
Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.
Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.
That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.
Weekly Retail Fix
THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%
WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers. —
Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.
Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.
THE FIX: Improved shopper experience ups comps
Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.
Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.
Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.
Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”
He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.
“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”