Talking Real Estate With Corey Bialow
Bialow Real Estate is a full-service real estate consulting firm dedicated to servicing the needs of retailers — local, regional and national retailers. Bialow provides all of the traditional functions of an internal real estate department including strategic planning, market analysis, site selection, lease negotiations and coordination of the fit out or construction process on through to store opening.
“We have our own network of about 50 different brokers in each major MSA in the country,” said Corey Bialow, the company’s CEO. “We connect the brokers with our clients and work as the master broker. An advantage to this is cost savings. When you hire us as your real estate team, the broker pays us when deals are signed. Retailers get our services basically for free.”
Chain Store Age recently asked Corey Bialow to talk about the retail real estate trends he sees from his vantage point today. Here’s what he had to say.
What consulting services are your retail clients asking from you today?
Before the recession, retailers were focused on growth. For the past few years since the recession, retailers want our help in repositioning existing store portfolios by right-sizing store portfolios and store square footages. They have edited their merchandise selections and remerchandised their stores.
A number of retailers are using the Internet to do this. If you once had a 10,000-sq.-ft. prototype, today, you might be more efficient with a 5,000-sq.-ft. prototype plus a warehouse that fulfills Internet orders.
When growth does return, do you think that today’s powerful site analysis and selection technologies will produce better performing stores?
I don’t think you can replace boots on the ground with technology. Don’t get me wrong, I want as much data as I can get. But technology and data are tools and not decision makers.
Where the technology is great is the macro level. Suppose you want to roll out your stores to cover the Baltimore metropolitan market. Technology can show you on a macro level where your customers are.
But I think there are too many variables to trust sales volume models. You might find through modeling that a particular location should produce a million dollar store. But the model doesn’t take the site’s physical characteristics into consideration. Poor parking will ruin an otherwise good location. What if a competitor opens a store down the block? There are lots of variables. To find them, you have to walk the site and evaluate it yourself.
What advice can you give to retailers trying to expand in today’s increasingly expensive landlord’s market?
It is a landlord’s market in the good retail corridors, and retailers need to understand how strong the competition for good space is. We recently put in an offer at the asking rent for a prime end-cap space in a prime retail corridor. The landlord received 10 offers. That’s how much demand for space outweighs the available supply today. In this kind of market, if you find a good space, don’t over-analyze it. Take it. Many of our clients are opening a store every week. There is no time to negotiate for every last nickel. In this landlord’s market, rents are at an all time high, and if you don’t move fast, you’ll lose deals to those who do move fast.
While the recession is over, many retailers continue to struggle. When will this turn around?
I don’t think that struggling retailers are the story anymore. I don’t think the story is that RadioShack is closing stores or that Sears isn’t doing well. The real story — what we often don’t hear about in the media — is that some retail segments are growing very aggressively. Fast-casual food service is on fire, for instance. So are health spas. The mobile phone businesses are opening lots of stores. CVS and Walgreens are growing rapidly with their urgent care concepts. These are the kinds of stories we should be hearing about. Some segments are seeing tremendous growth.
Caché looks on the bright side following tough first quarter
A shrinking net loss was the only positive result from the tough first quarter fiscal 2014 numbers posted by Caché. Net loss shrank to $10.8 million from $17.8 million in the same quarter a year earlier.
Caché’s net sales dropped 11% to $47.4 million, from $53.5 million. Same-store sales declined 8.9%, with the shift in Easter contributing. Jay Margolis, Caché’s chairman and CEO, tried to strike an encouraging tone.
“We had a disappointing start to the year with strength across our dress assortments more than offset by too narrow of an assortment in key casual bottoms, and the decision not to move forward with certain casual and accessories offerings that were inconsistent with our brand positioning,” said Margolis. “This, along with lower mall traffic throughout the quarter, store closings as a result of winter snowstorms and the later Easter holiday impacted our sales and profitability. To this end, we were pleased with the response to our dress assortments in long, short, day and evening categories. At quarter end, dresses represented 55% of our total sales compared to 44% a year ago.”
Michaels jumps in to e-commerce waters
Michaels has enhanced its online presence with the launch of its new site that enables shoppers to make online purchases from any computer, tablet or smartphone.
The new site goes beyond the typical online shopping experience, according to the company, with project ideas and one-click shopping lists for projects all in one place. It also features "Favorite Pins" — projects and products that are trending on Pinterest from Michaels.com.
"Our customers have been asking us for years when we’re going to offer online shopping, and now we’ve created a site that truly is ‘Where Creativity Happens,’" said CEO Chuck Rubin. "We’ve simplified the online shopping experience so that when visitors find a project they love, they can just click on it and fill their cart with everything they need instead of going to page after page."
During the launch period, Michaels.com will feature 21 days of hourly, daily and weekly online specials. Customers are encouraged to share their Michaels craft haul with hashtag #MichaelsDelivers.
Michaels online shopping is currently available to U.S. residents. Online shoppers can take advantage of in-store promotional offers, and the site offers free shipping to any U.S. store, in-store returns and free shipping on orders greater than $50.