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UPDATE - Uptons closings stun center owners

By Jon Springer

Shopping center owners in the Southeast states were left stunned -- and anchorless -- after the Uptons department store chain abruptly announced it would close in late July.

The 75-store chain, based in Norcross, Ga., and operated by New York's American Retail Group (ARG), cited an inability to finance expansion as its reason for closing its stores, located mainly in community centers in Georgia and Florida. Stores began going-out-of-business sales immediately after the announcement. ARG is controlled by the Brenninkmeyer family of the Netherlands.

The closing of Norcross, Ga.-based Uptons took center owners by surprise.

Uptons was to anchor two mall projects set to open in Georgia later this year. Its location at the Mall of Georgia Crossings, the power center wing of the Mall of Georgia set to open Aug. 13 in Buford, Ga., would not open as planned, said Myles Minton, vice president of community center development for Indianapolis-based Simon Property Group, which is developing the project with Atlanta's Ben Carter Properties. It appeared at press time that the 80,000-square-foot location set to open in CBL & Associates' new Arbor Place mall also will not open as planned. Arbor Place is set for an October opening.

"I was surprised at the abruptness and the completeness of the closures," Minton said. "Uptons has been in the market for decades. Many people in Georgia practically grew up with it."

Some community center owners affected by Uptons closing were hoping to get the stores back and explore opportunities to lease to new retailers. But they weren't immediately certain whether that would be possible. Newmark Restructuring, a New York-based consulting firm for ARG, was handling the closings.

"We're not sure what's going to happen," said Loren Pollack, president of Stuart S. Golding Co., a Clearwater, Fla.-based manager of Gateway Market Center, a 400,000-square-foot community center in St. Petersburg, Fla., anchored by an Uptons. "We don't know whether they want to sublease the stores themselves, or declare bankruptcy."

A number of retailers, notably Kohl's, took similar advantage of Northeast locations this spring by buying leases from the bankrupt Caldor chain. Other retailers should be interested, Minton said, because "Uptons has very good real estate."

ARG closed the stores because the chain was unable to get financing for an expansion. An upside to the closings could be in the mall sector, where ARG said it will focus on expanding its other retail concepts, including Eastern Mountain Sports, Maurices, Millers Outpost and Levi's and Docker's Outlets. Most are mall-based specialty stores.

In a rare interview with Women's Wear Daily, ARG Chairman Louis Brenninkmeyer said the Uptons chain would be closed because the company could not raise enough capital to fund further growth of the chain. Instead, the company will focus on expanding Millers Outpost, a casual men's and women's clothing chain, and Juxtapose, a junior apparel chain. It will also unveil an upscale prototype for the 500-unit Maurices apparel chain, which targets men and women in their 20s.