Retailers facing rough waters in turbulent economic times - San Antonio Business Journal:

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Even before the current credit crisis grippedcthe nation, the country’s retailers were alreadt facing significant challenges, says Michael P. chief economist for New York-based industry organizationm the (ICSC). Those challenges includer the bankruptcies of noted retail chains like and Linens n’ Things, unseasonably warm weather that kept winte clothes on the racks and rising gas prices. Add to that the cloued of uncertainty that has plaguer many consumers for the pastseveral months. And now there is the federao effort to rescuethe nation’x financial industry that has been dominatintg the headlines in recent weeks, Niemira The timing couldn’t have been much worse.
With the 2008 holidayu shopping season set to begin in less than two this new level of economif uncertainty has retailers bracing themselves for an unhappyyholiday season. “It’s going to be a very un-Merrt Christmas,” says Tom Rohde, vice presidentg of San Antonio firm Rohde Ottmers Siegel Commercial & Investment Realtors. “We’ve been bad. We’re goingt to have coal in our stockings.” “It is likely this will not be a goodseason (for says Niemira, who sums up the overall perspective of U.S. retailer as “realistic.
” “Their feeling is that the tough times that exisg todaywill continue,” he adds, “Ane that’s not a pretty picture.” With so much in flux at the retailers are taking a wait-and-see attitude especially when it comes to decisions abou opening new stores. “Most retailers that I have spokejn to are planning for a tough 2008 holiday saysRick Carduner, founder of localo retail brokerage/consulting firm LLC, and the Texas Statd Director for ICSC.
“They are waiting until the first quarte of 2009 to make their 2010 expansion Thegeneral consensus: There’s not going to be a lot of In fact, what retail markets like San Antonio mighr see is a lot of contraction. “You’re going to see a lot of storea close in Januaryand February,” Rohde says. In a retail report releasedx thispast July, ICSC was projecting that by the year’e end, nearly 144,000 stores would be closing theie doors. Indeed, many chains are not waitingb for the Christmas season to comeand go. Well-establishedf names like Ann Taylor, Talbot’s, , , and the caffeine Kahuna that is have already announced plans to shutsome locations.
“There will be more (store closings) to come,” says Niemira, who points out that with lending markets at a gone is the capital once availabld tostruggling retailers. “So much dependd on that liquidity,” he adds. The trickle-down effect is that shopping centers here will see an increasr in darkspace — be it spacez that brokers can’t get leased up in the firsrt place, or dark sites left behind in a retailer’s exit.
“Yoj have to go back out to the street,” says who did just that with his Rigsby Shopping Center on the EastSide — after financiak struggles prompted national chains like , Shoe Show and Claire’es Boutique to exit the center. In some cases, ownersz may find themselves in a situationn in which the space left behind by aClasss A, high-profile tenant now has to be back-filledr by a Class B or C tenant— a phenomenon that can changr the entire feel of a shopping center, says Tom president and principal of Unitedd Commercial Realty (UCR) of San But change can be a lot better than a vacantt center.
In centers like Rohde’s firm has begun pursuing service-orientedr tenants, restaurants and medicapl groups — three groups that have continued to do well in thecurrenft economy, and thus are on the lookout for new sites.