X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LOS ANGELES-Though markets in other parts of the US could suffer as a result of the pending closure of 302 Heilig-Meyers furniture stores, owners of retail projects in California and other parts of the West shouldn’t be too worried, brokers and real estate analysts tell GlobeSt.com.

The Richmond, VA-based chain announced last week that it would shutter the stores and lay off 4,400 workers across the nation as part of a Chapter 11 bankruptcy filing. That’s bad news for many relatively small towns in the Midwest and South, where the typical Heilig-Meyers store of 15,000 to 20,000 sf is considered fairly large.

But it’s a different story out West, experts say. Though the chain plans to close 81 stores in California and a few dozen more in neighboring states, the West Coast retail market has been strong and owners of retail property shouldn’t have much trouble replacing Heilig-Meyers with one or more new tenants.

Though the chain has been around for decades, it didn’t start expanding into the West until the mid-1990s, says H-M spokesman Barry Brockwell. And even after the closures, the 87-year-old company will still have 596 stores and 12,900 employees in 29 states.

Howard Wong, a broker and vice president of broker Jones Lang LaSalle’s Retail Group in Downtown LA, says the closures will have a minimal effect on the Southland’s retail market because Heilig-Meyers stores are not free-standing ones in prime home-furnishing locations.

In Southern California, the chain has stores in Montebello, Culver City, San Fernando, North Hollywood, Canoga Park, Redondo Beach and many Inland Empire and Central Valley cities, Wong notes. Heilig-Meyers customers are typically middle-income people with mid-level tastes when it comes to furniture, he adds.

“The vacated stores, typically with 15,000 to 25,000 sf, will be rented sooner or later, depending on the market and location,” Wong tells GlobeSt.com. “There’s always demand for space of this kind for discount stores, appliance stores, etc. The furniture business has experienced ups and downs as tastes change, with stores like IKEA appealing to many of today’s trend-seekers.”

Jack Kyser, chief economist of the nonprofit Los Angeles Economic Development Corp., says the Heilig-Meyers closing announcement was not surprising, in that the chain never really made its presence felt in the West.

“Like many companies, they didn’t realize what a competitive market California is,” says Kyser, whose LA-based group supplies research and plays a key role in attracting and maintaining businesses. “Wal-Mart, Target and IKEA compete strongly for young furniture buyers,” he adds, which makes it hard for newcomers to succeed.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.