Dallas-based J.C. Penney has long been known primarily as a mall anchor. But of the 28 stores the company plans to open this year, 23 will go up in open-air centers. Twelve of the 19 that opened last year were open air.
Plus, the company's 22 existing open-air stores take in $200 per sf versus the portfolio average of $153 per sf. One strategy the retailer has employed is to take over the spaces vacated by such retailers as Kmart, Wal-Mart and ShopKo, said Paul Freddo, company VP and director of real estate. "There are opportunities that are falling in our lap right now," he said.
Redmond, WA-based Eddie Bauer is also mainly an enclosed-mall retailer, as only 13% of its 425 stores are in open-air centers. But that total is up from 5% five years ago, and by 2008, about 25% of its stores will be in outdoor centers, said Mark Borison, the retailer's VP of real estate. Eddie Bauer open-air stores have 15% higher average sales than its mall units, some of which take in $7 million per year, he said.
However, Abercrombie & Fitch, based in New Albany, OH, is not changing its real estate plan any time soon. The 930-unit chain does best in enclosed malls because that's where its teenage customer base prefers to shop, said Jeffrey Sinkey, SVP of real estate. "At the end of the day, we're still going to be a regional mall player," he said. "The mall is where we produce."
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