Shopping Centers Today

DEC 2016

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

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48 S C T / D E C E M B E R 2 0 1 6 A éropostale's new owners will reinvest in the chain's stores instead of launching a wave of closures, according to David Simon, chairman and CEO of Simon. The firm, along with Authentic Brands Group,General Growth Properties, Hilco and Gordon Bros., agreed earlier this year to buy the beleaguered, 805-store teen- apparel chain for about $243 million. Hilco and Gordon Bros. are spending about $188 million on inventory, while the other partners shoulder the rest. The partners envision Aéropostale as a chain of 500 stores ultimately — all of them profitable, says Simon. They had originally planned to trim the store count to 229, but after a closer look revealed how many Aéropostale units are actually profitable, the partners decided to resist investor pressure to shut stores. "The fact of the matter is, there is a really healthy physical store environment and mall environment," Simon said. "And I think all of us can't lose sight of that. That's where we should be investing." Authentic Brands is running Teen chain Aéropostale has a bright future, say its new landlord owners By Brannon Boswell Mall owners go vertical with Aéropostale STORE OPENINGS Amazon.com intends to open 2,000 Amazon fresh grocery stores across the U.S. within the next 10 years, according to internal documents released to Business Insider. New York City–based fragrance brand Bond No. 9 opened its sixth unit and first store outside of the city, a unit at The Grand Canal Shoppes, in The Venetian resort in Las Vegas. The retailer wants to open 20 stores over the next five years. Drive-through super-market concept Farm Stores plans to open three units in the Houston market by next year. The Miami-based chain already operates 70 stores across South Florida and is growing in New Jersey as well. Ross Stores opened 25 Ross Dress for Less and nine DD's Discounts units across 16 states in September and October. The company plans to add about 90 locations early 2017. Department store chain Boscov's opened its 45th store, at Sanger- town Square, in New Hartford, N.Y. the day-to-day operations, while Simon provides strategic help, including information technology and legal advice on licensing. Simon's deal to buy one of its tenants is a logical extension of the landlord business, according to Simon, like AT&T;'s proposed acquisition of Time Warner. "Amazon makes vertical investments; the cable industry makes vertical investments," he said. Simon made its first vertical investments a couple of years ago by franchising Starbucks stores in some of its centers, he notes. Simon also operates a Pinky's Hot Dogs unit at its Del Amo Fashion Center, in Torrance, Calif. "We're getting a lens at a much more granular level on retail," said Simon. "So it's very interesting. There are five or six things that really make a retailer click: sourcing, rent expense, store expense, merchandising, packaging — all the stuff that at the end of the day are going to make us better real estate owners." Simon says the Aéropostale deal is a model he would be interested in replicating in the future. n S T O R E F R O N T S

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