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Retailers see post-Christmas gift-card rush

By the time SCT readers see this, most of the gift cards issued for holiday season 2004 will have been redeemed, according to a survey of about 800 card recipients. Dallas-based Paymentech, which processes payments for retailers, conducted the study between Dec. 26 and Dec. 28. Some 16 percent of the respondents had already redeemed their cards as of the end of that time, while an additional 41 percent said they planned to do so within two to four weeks of Christmas Day. Most of those cards were valued at between $25 and $50. Among the survey’s other findings: 48 percent said they got at least one gift card this past season, while one-third said they received three or more. Nearly a third of the respondents received department store cards, 24 percent got theirs from specialty stores, and 21 percent came from mass discounters.

Wet Seal to close 150 stores

Teen-apparel chain The Wet Seal will close about 150 underperforming stores and slash 2,000 jobs by the end of this month as part of a major restructuring plan. The Foothill Ranch, Calif.-based retailer, which operates about 424 stores, has struggled with sales for some time. Landlords have seen this coming for months, says Ryan Dobratz, a Morningstar REIT equity analyst, who adds, “they hope to get them re-leased to other tenants.”

Lightstone buys two Texas malls

The Lightstone Group had a busy 2004 — right up to the last minute. The Lakewood, N.J.-based firm’s two most recent purchases brought its total for the year to nearly $1 billion worth. The latest buys were the 445,000-square-foot Shawnee (Texas) Mall and the 697,000-square-foot Brazos Mall, Lake Jackson, Texas, for a total of $48.2 million from Irving, Texas-based Archon Group. Lightstone says Prime Retail, its factory outlet subsidiary, will manage the centers. The malls will not be converted to outlet centers or branded Prime Outlet, however. In June Lightstone bought five properties from Philadelphia-based Pennsylvania Real Estate Investment Trust for $110.7 million. The firm also paid $121 million for the 50 percent stakes it did not already own in five Prime Outlet properties it held jointly with Pearson Properties.

Pier 1 ships out Cargo Kids

By next month Pier 1 Imports will have completed renaming its CargoKids stores to Pier 1 Kids. The Fort Worth, Texas-based chain has already converted 12 of the 40-unit chain’s stores to the new name as of last year; sales rose significantly at those, without any advertising, executive vice president and CFO Cary Turner told attendees at S.G. Cowen’s Consumer Conference in New York City. Turner said Pier 1 Kids will eventually expand to about 300 stores in the U.S. and Canada.

Ultimate Electronics to reorganize

Ultimate Electronics is seeking to reorganize after filing for Chapter 11 last month and securing new financing. Wells Fargo Retail finance will provide up to $113 million in debtor-in-possession financing, and new Chairman Mark J. Wattles will provide an additional $5.6 million. (Wattles is also CEO of Hollywood Entertainment.) Ultimate Electronics, which operates 65 consumer electronics stores, saw sales plummet after saying in December that it could default on a bank loan.

Men’s Wearhouse washes too

Most people know Men’s Wearhouse for its 800 stores that sell men’s clothing. But in 2000 it began renting tuxedos, and the company wants to clean clothes, too. Men’s Wearhouse got experience in dry cleaning while washing the 900,000 tuxedoes it rented from 2000 to 2004. With its eye on the $8 billion dry-cleaning industry, Men’s Wearhouse acquired dry-cleaning businesses Nesbit’s and Craig’s Cleaners. This year the company will open several dry-cleaning units to test for a possible national rollout. No name for the concept or timeline for the rollout have been announced.

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