Hilco Creates Outsource Unit for Retailers

NORTHBROOK, IL-Hilco Real Estate LLC has hired Barry Kaufman to start up and run a division that will focus on bringing retailers the tools of an outsourced real estate department. Kaufman, former president and CEO with Limited Brands Real Estate, will head up Hilco Real Estate Retail Solutions.

Kaufman tells GlobeSt.com that the new division will work with retailers to develop and execute strategic plans that optimize a company’s store positioning, sizing, occupancy costs and capital expenditure levels, thereby maximizing brand productivity and profitability. “Retail companies have recognized that they can’t operate reactively and be driven entirely by new store openings anymore,” he says. “Now, retailers need a strategic, well-thought-out model that can ensure alignment of targeted real estate activities.”

The times have changed, Kaufman says. A thousand malls were created in the 1960s-80s, and another 1,000 power centers were created in the 1990s, he says, allowing the big boxes to grow their brands. But there’s not much new ground to tread, he says. “The cornfields have been developed, and suburban areas pretty much developed out. There really aren’t any market gaps or voids,” Kaufman says.

Now, it’s a different game, with a more mature shopping industry, he says. “While there are some new stores, most are mature, and the older stores have two pieces of bad news: They no longer have the ability to develop top and bottom-line growth, and new store growth will no longer mask operating issues in the company. You have to be really sure you have exactly the right number of stores in the right locations, in the right size and configuration, at exactly the sales productivity and targeted occupancy levels.”

He says the new Hilco division will help retailer executives communicate their real estate needs better. Kaufman divides the proposed services into three categories: Benchmarking and analytical work, real estate strategy and transaction targeting and transactional work. The division will offer full-service or piecemeal tools, he says.