Woodbury Common agrees to drop New York trade restrictions
Simon Property Group has agreed to a settlement with the office of New York State Attorney General Eric T. Schneiderman that will have it loosening its stranglehold on the outlet business in Metropolitan New York.
Schneiderman maintained that Simon’s Woodbury Common outlet center in the Hudson River Valley owned a virtual monopoly in the region — including New York City — by virtue of a clause in tenant leases that forbid the opening other outlet stores within a 60-mile radius.
“No business should be allowed to stifle an entire industry at the expense of the consumer, but for years, that's exactly what Simon Property Group did to New Yorkers,” Schneiderman said. “Simon's anticompetitive conduct blocked competition and drove up prices for New York consumers.”
Simon will pay New York State $945,000, revise existing leases to remove the radius restrictions, and cease employing radius restrictions or other exclusionary tactics that might deter Woodbury tenants from opening additional outlet stores.
The settlement is welcome news for Staten Island developer Joseph Ferrara and his BFC partners, whose Empire Outlets NYC are under construction and set to bring luxury outlet stores to New York City in 2018. Brands signed to lease space at the 1.1 million-sq.-ft. development near the Staten Island Ferry terminal include Nordstrom Rack, Banana Republic, Francesca’s Collection, and Columbia Sporting Goods. But this week’s news should quickly add more names to the list, according to Casandra Properties’ James Prendanamo, who directs leasing for Empire Outlets.
Asked if the settlement expanded the prospective tenant pool, Prendamo replied, “We were looking at a tenant pool that was 10 Olympic-sized pools, then it shrunk to four, and now it’s back to 10 again.”
In a statement, Simon Premium Outlets argued that the radius restriction was lawful, having been in use since 1985, long before Simon acquired the center from Chelsea Property Group. The company decided to settle, however, since Schneiderman’s investigation had become “an unnecessary distraction.”
“Simon has never sought to limit competition. It regularly granted exceptions to radius provisions and understands the importance of competition and consumer choice in the market,” Simons stated. “While we do not agree with the suggested findings, the settlement has favorable terms for Woodbury Common and will permit Woodbury Common to focus on providing tenants and shoppers the type of premium experience they seek.”
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Survey: Parents in no hurry to finish up back-to-school shopping
Retailers still have time to capitalize on their second biggest selling season of the year.
Only 45% of households with children in grades K-12 had completed their shopping as of early August, according to the National Retail Federation’s annual survey conducted by Prosper Insights & Analytics. That’s down from 52% at the same time in 2013 and 48% last year.
Of parents surveyed August 1-9, only 13% had completed all their shopping, and 23% had not started at all. The results come even though the number of parents who planned to start shopping at least two months before the beginning of school was up this year at 27%, compared with 22% last year.
NRF has forecast that families will spend $83.6 billion on back-to-school this year, including $29.5 billion on K-12 and $54.1 billion on college. To wrap up their buying, 55% planned to head to department stores, 49% to discount stores, 39% to clothing stores, 35% to office supply stores and 33% online.
When deciding where to shop, 41% said they are influenced by coupons, down from 48% last year and the lowest in the survey’s history. But 33% said they would leverage in-store promotions and 29% said they would be influenced by newspaper advertising inserts.
The survey found that 61% of school supply purchases were influenced by school requirements. Similarly, 41% of electronics purchases were dictated by what schools required.
“Similar to recent years, some of the big-ticket items are being significantly influenced by school requirements,” Prosper principal Analyst Pam Goodfellow said. “That is why we are seeing many parents take their time in tackling their lists so they can take advantage of any special promotions that can help them save on items such as laptops and computers.”
Overall, the results for college students were largely the same, with students and their parents saying they, too, had completed 45% of their shopping, down from 48% last year. Only 12% had completed all their shopping and 26% had not started at all.
The survey found college consumers will likely complete the rest of their shopping online (41%), at discount or department stores (38%each), college bookstores (32%) and clothing stores (31%).
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Kohl’s to reduce floor space in half of its stores by end of year
There are some major changes going on at Kohl's stores.
The department store retailer announced plans to make nearly half its locations "operationally smaller through balancing inventory and adjusting fixtures" by the end of 2017. To date, the new interior layouts have been rolled outin 300 of Kohl's 1,100 locations.
In addition, Kohl’s plans to "right-size" the physical square footage of its store in Warner Robbins, Ga., reducing it from an 89,000-sq.-ft. store to a 62,000-sq.-ft. one. The chain's store in Fort Smith, Ark., will be reduced from 87,000 sq. ft. to 62,000 sq. ft.
Kohl’s is also upping its commitment to small format stores, In October, the chain will open small-format stores, averaging 35,000 sq. ft. each, in North Smithfield, Rhode Island; Blue Ash, Ohio; East Windsor, N.J.; and Montebello, Calif.
In spring 2018, Kohl’s will open a single-level 55,000-sq.-ft. store in Greenfield, Wis., which will be a relocation from its current two-level 85,000 sq. ft. store in nearby Southridge Mall. Earlier this year, Kohl’s relocated its 80,000-sq.-ft. Charlotte, N.C., store to a nearby 55,000 sq.-ft. location.
“Our stores remain at the core of our omnichannel strategy and we will continue to invest in them by opening smaller formats, rightsizing and optimizing our selling space and working to ensure that shopping in our stores is an engaging and inspiring experience for our customers,” said Kevin Mansell, Kohl’s chairman, CEO and president.
Kohl’s also announced it will begin shipping from its fifth e-commerce fulfillment center in Plainfield, Ind., this month. The 937,000-sq.-ft. facility is equipped with state-of-the-art technology to maximize productivity and throughput.
“We have set a goal to be the best-in-class omnichannel retailer and opening our fifth e-commerce distribution center will support the delivery of online orders faster and more efficiently to customers nationwide," said Mansell.
When you start downsizing this amount of stores on a size of this amount it means one thing. You are losing a massive amount of money. You are going to lay off thousands. The leases are killing you. The next recession breaking point that will kill the country will be the retail collapse