Shopping Centers Today

MAY 2012

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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them in the contraction mode, like the Gap." Among the department stores, Brown says he expects Nordstrom will add three stores plus 18 Nordstrom Rack discount outlets, and that Target could open 21 stores. As is always the case, the retail real estate industry is keeping a close eye on Wal-Mart Stores' expansion plans, particularly for the Neighborhood Mar- ket grocery concept. Wal-Mart already operates 167 of those, which gener- ally measure about 40,000 square feet and include a pharmacy, and has plans to double their number by next year. Given their smaller, more flexible for- mat, Neighborhood Market units are being targeted toward urban areas, often taking over existing space. Wal-Mart is making a concerted effort to launch the concept in California, where 13 of the stores are in the planning. The push into California is drawing special scrutiny. Albertsons, Ralphs and Vons, the biggest supermarket chains in that state, have already seen challenge from Trader Joe's, and even from Tar- get, which is selling an expanded line of produce, meat and baked goods at some 200 stores in California. Neighborhood Market, pitched as offering both conve- nience and low prices, is expected to raise the stakes even more. The Neighborhood Europe sees slow, solid retailer expansion in 2012 As the drumbeat of troubling economic news finally begins to fade, retail- ers are dusting off their expansion plans for Europe. "By historical standards there are fewer retailers looking to expand than there were five years ago, but there is a solid group of generally major players who are looking to expand, in some cases quite aggressively," said Nev- ille Moss, head of retail research for Europe, the Middle East and Africa at CB Richard Ellis. "They are tak- ing advantage of available prime space in some markets — albeit that's increasingly rare just about everywhere. Some are looking at emerging markets where there have been new developments over the past year, and others are looking to cross borders into new regions." CB Richard Ellis says that roughly 70 percent of the international retail- ers it surveyed plan to open more than five stores in Europe by the end of this year. Of those, some 20 percent expect to open 40 or more stores. The firm declined to identify any of these surveyed retailers, but the most optimistic sector were the "value and denim" retailers, which as a group plan to open an average of 36 stores, followed by houseware and department stores, with an average of 32.2 stores. The sector planning the least amount of ex- pansion was consumer electronics, with an average of 9.7 new stores. Italy is the hottest location, followed by Germany, Russia, Spain and France. Moscow continues to lure new retailers — Debenhams an- nounced the opening of its first store there, and the U.K. retailer says it plans to open seven more across Russia over the next five years. Others headed to Moscow are British toy chain Hamleys, Krispy Kreme and Seattle's Best Coffee. In a reverse commute, Russian sports- apparel retailer Bosco opened its first outside-Russia store in March, at the Westfield Stratford City cen- ter, in London. Bosco has plans for more stores in London, and also in Madrid and Barcelona. Cushman & Wakefield notes strong retail sales growth in parts of Eastern Eu- rope, especially Russia and Poland, as well as improvement in Turkey. Greece and Spain, though, con- tinue to flounder, the firm said in its report. Among the international retailers that have been expanding on the Continent are Abercrombie & Fitch, Forever 21 and the U.K.'s Primark and T.K. Maxx. Entering Europe from Asia are Bosideng, Le Bunny Bleu, Muji and Uniqlo. "We expect to see the trend of both value and luxury retailers performing well to continue," the Cushman & Wakefield report said. "Frugal spending and a focus on value by consumers have benefited value retailers and discounters such as Lidl, Aldi, Primark and H&M; whom are expanding their portfolios." One expansion-minded firm, Apple, hired John Browett, chief executive of British electronics chain Dixons Retail, to head Apple's retail operations and expansion. That announcement spurred talk that Apple would soon increase its ex- pansion efforts in Europe, where Browett's expertise is greatest. Indeed, among the approximately 40 stores Apple expects to open this year are four in Germany, one in Spain, and one in the Burgundy region of France. In short, though this year will offer noth- ing like the dizzying growth of a few years back, "there will be a cautious level of expansion," said Moss. That is a welcome change from the days of debt-crisis paralysis. — CH 134 SCT / MAY 2012

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