Friday, July 16, 2010
ATLANTA BUSINESS CHRONICLE – BY Lisa R. Schoolcraft STAFF WRITER
Retailers are starting to grow again in metro Atlanta.
By the end of the summer, a national retailer will begin testing its new prototype store here, and by the end of the year, two high-end retailers will enter the market.
Moderate- to discount-priced retailers are adding stores to the market as well.
New York-based AnnTaylor Stores Corp. (NYSE: ANN) plans to open its new, smaller, prototype store at Lenox Square, one of just three markets to get it, while high-end retailers Fendi and Herve Leger will open their first stores in the market at the same Buckhead mall.
Discount retailer Shopper’s World just opened its first store July 1 with plans for at least two more stores, and national retailers Yankee Candle and Charming Charlie are also adding stores.
Ray Uttenhove, executive vice president and managing partner at SRS Real Estate Partners in Atlanta, said retailers are moving back into expansion mode.
“Unless they are in serious trouble – and those retailers are already pretty much gone – they are thinking of expansion or are in the process,” she said.
Retailers are expanding for two reasons, said Barbara Babbitt Kaufman, retail consultant and former owner of Chapter 11 Bookstores.
“I think these companies are probably getting very good deals right now [on rents],” she said. “And they are getting set so when the market turns they are in the right place and at the right price.”
Retailers may not be expecting “the best business they could have” as they open the new stores, Kaufman said, but “these companies are strategically setting themselves up for the future.”
Any growth in retail would be the first in some 18 months, said Dennis Kemp, manager of Perimeter Mall.
“In the last eight months, I think there has been a stabilization of the economy in general,” Kemp said. “I think there is some hopefulness.”
That’s fostering some growth in retail sales, he said. At Perimeter Mall, sales have been up “double digits” through May at comparable stores, he said.
Nationally, fiscal year-to-date retail sales posted its strongest performance since 2006, according to a recent report by the International Council of Shopping Centers Inc., a trade organization for retail centers.
The best-performing segments were luxury, up 8.8 percent, and department stores, up 5.9 percent, the organization said.
“The June performance was relatively uneven as lower prices and discounting held back the reported pace of spending,” said Michael P. Niemira, chief economist and director of research for the ICSC, in a release. “Still, the increase means that on a fiscal year-to-date basis total sales grew by 3.8 percent, marking its best performance since 2006.”
For July, the ICSC predicts the pace of sales will continue to increase within the 3 percent to 4 percent range on a year-over-year basis.
With sales picking up, store growth is around the corner. Perimeter Mall doesn’t expect new retailers in the last half of 2010, but the mall is negotiating for new retailers in 2011.
At Phipps Plaza, no new openings are expected soon, “but more announcements are on the horizon,” said Dewayne Herbert, mall manager.
For Ann Taylor, the new, smaller stores “better reflects our updated brand aesthetic,” CEO Kay Krill said during a May 21 analyst call. “We expect the new prototype to deliver a highly engaging client experience within a box that is roughly 40 percent smaller than our current average store.”
At Lenox, the Ann Taylor store will be about 4,000 square feet, half of its original store, in the former Bailey Banks & Biddle jewelry store space, said Anne Huffman, mall director of marketing and business development.
Fendi, with a new store in the market, is under construction and will open a 2,069-square-foot retail space near Bulgari in the late fall, she said.
The store will sell both men’s and women’s ready-to-wear clothing as well as jewelry, accessories, handbags, furs, luggage, shoes and more.
Likewise, Herve Leger, which sells women’s apparel, will open in the Neiman Marcus wing, with its only boutique store in Atlanta, Huffman said.
Originally founded in 1985, French designer label Herve Leger was acquired in 1998 by BCBGMAXAZRIAGROUP Inc., which also has the labels BCBGeneration, Max Azria and Max and Cleo.
In early 2007, fashion designer Max Azria relaunched the Herve Leger label with his own creations, including the bandage dress, which can sell for nearly $1,000.
The brand is carried in upscale department stores like Saks Fifth Avenue, Neiman Marcus and Nordstrom, but has boutique stores in Beverly Hills, Paris, London, New York City, Las Vegas and other cities.
In spring 2011, luxury men’s wear company Ermenegildo Zegna will open in a 3,917-square-foot space near Cartier in Lenox. The store will offer men’s clothing, accessories and shoes.
Moderate- and lower-end retailers are also expanding in metro Atlanta.
Charming Charlie, an accessories store named one of 2010’s hot retailers by the ICSC, is adding two more locations – one at Avenue West Cobb in Marietta and the other at Mall of Georgia in Buford – in metro Atlanta, while Yankee Candle is adding one more store, also at Avenue West Cobb.
New York-based discount store Shopper’s World opened its first store July 1 in the Camp Creek area with plans for at least two more locations in metro Atlanta, said Sarah Williams, an associate at SRS Real Estate Partners, who helped broker the deal.
“We have two more locations in the works, another south-side location and an east-side location,” she said. Those should open in early 2011.
“The overall plan is to get these three open and see how we do,” Williams said, with more stores possible in 2012.