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Shopping Centers Today -> October 2003
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GREAT INDOORS REPORT SURPRISES MALL EXECUTIVES
BY IAN RITTER
Sears, Roebuck and Co.’s decision to close some of its Great Indoors home furnishings stores, citing disappointing sales in a second-quarter financial report, has surprised some shopping center executives.
Landlords and others said they had no idea the concept was struggling.
“You go to the store in the weekend, and you can’t get in the parking lot,” said Cindy L. Ciura, SCMD, vice president of marketing at Southfield, Mich.-based Schostak Bros. & Co., which manages PLC Commercial’s Fountain Walk, Novi, Mich. “Most of the time when retail isn’t doing well you can point a finger, but this is one time where it’s puzzling.”
Said Rick Ferrell, vice president of retail property at Forest City Ratner, which has a Great Indoors in its Woodbridge (N.J.) Crossing: “Everything about the store that I’ve seen, I give high marks to. I hope that Sears comes forward with a little more information.”
At press time, Sears was saying little more than that the 21-store chain was not generating satisfactory revenues.
“To date, the financial performance of The Great Indoors stores has not met the expectations of the company,” it said in the report. “As a result, the company has initiated a review to determine actions that would improve the profitability and productivity of the format.”
That review, which Sears says it expects to complete by the end of the year, could result in “restructuring of The Great Indoors’ format and/or store closures,” the retailer said. At press time it announced the closure of units in Arlington, Texas, outside Dallas; Houston; and Springdale, Ohio, outside Cincinnati. Sears is converting another store, in Shelby Township, Mich., into the first Great Indoors outlet unit.
Great Indoors, a concept launched in 1998, anchors a number of major shopping centers; it also is freestanding at other locations. Sears did not break out its financial performance in the report, but its specialty stores division, which includes that chain, National Tire & Battery stores and others, saw sales drop to $1.36 billion for the quarter, from $1.44 billion for the same quarter last year. During the second quarter, Sears’ same-store sales for all chains combined decreased by 5.1 percent from the same quarter the previous year.
“It means, ‘We have a problem here, and we need to find a solution for it,’ ” George Whalin, a retail analyst at San Marco, Calif.-based Retail Management Consultants told SCT. Whalin predicts that Sears will close or sell the chain.
Other chains have experienced similar problems with noncore stores, Whalin says, citing The Home Depot’s Expo concept, and even Target’s Marshall Field’s and Mervyn’s brands. “Unless you figure out who you are and what you’re trying to do, you’re going to have a difficult time with it,” he said.
Great Indoors is an anchor at Glimcher Realty Trust’s Polaris Fashion Place, Columbus, Ohio; Koll Development Co.’s FlatIron Marketplace, Broomfield, Colo.; and PLC Commercial’s Fountain Walk, Novi, Mich., among other centers.
Ciura said she hopes Sears won’t close the two-level, 152,000-square-foot store at Fountain Walk. But if it does, she says she is confident that it won’t be difficult to fill the vacancy.
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