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CoStar's Retail News Roundup Jan. 27 to Feb. 2, 2008

CoStar Reports on Retail Expansion Plans, New Developments, Acquisitions/Mergers/Sales, Closings or Bankruptcies, Personnel, Sustainability and more…
January 28, 2008
This week in the Retail Roundup, CoStar reports on expansions and new concepts at Robeks, Abercrombie, IPic, Ethan Allen, Captain D's and Del Taco ; new retail developments in NJ, WA, TX, and OK; acquisition, merger, or sale activity at Inland American, Cedar and Retail Ventures; store closings at Buffet Holdings, Cost Plus and Sprint Nextel; sustainability at Wal-Mart; personnel announcements at Shea Properties; Sears reorganization and replacement of its CEO, and more.

Did you miss last week's CoStar Advisor retail story, 2007 Retail Real Estate Results Paint Bleak Picture for 2008? If so, follow this link to read the story.

Deloitte Touche Names World's Largest Retailers
Deloitte Touche has released its 2008 Global Powers of Retail report, which identifies the worlds largest retailers based on 2006 figures (in order); Wal-Mart, Carrefour, Home Depot, Tesco, Metro, Kroger, Target, Costco, Sears, and Schwarz Unternehmens Treuhand KG.

Forbes Releases World's Largest Malls List
Forbes released its annual list of the world's largest shopping malls, and none of them are in the U.S. (in order); South China Mall in Dongguan, China is 7.1 million sq. ft.; Golden Resources Shopping Mall in Beijing, China is 6 million sq. ft.; SM Mall of Asia in Pasay City, Phillipines is 4.2 million sq. ft.; Cevahir Istanbul in Istanbul, Turkey is 3.8 million sq. ft.; West Edmonton Mall in Alberta, Canada is 3.8 million sq. ft.; SM Megamall in Mandaluong City, Phillipines is 3.6 million sq. ft.; Berjaya Times Square in Kuala Lampur, Malaysia is 3.4 million sq. ft.; Beijing Mall in Beijing, China is 3.4 million sq. ft.; Zhengjia Plaza in Guangzhou, China is 3 million sq. ft..


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.




EXPANSIONS / NEW CONCEPTS


Robeks Aims to Add 300+ Stores Through 2012
Manhattan Beach, CA-based Robeks, a fruit smoothie and "healthy eats" franchisor, has nearly doubled its size since 2006 to have 138 stores in 16 states. Already in 2008, the company has opened five stores; four in California and one in Florida. Sheri Miksa, Robek's CEO said in a statement, "We see robust opportunities for Robeks in 2008, as we forge ahead with our rapid growth plan, which aims for 500 stores in the next four years." According to CoStar Tenant, a Robek's ranges 1,000 to 2,500 square feet and is located within a range of shopping center types.

Abercrombie Debuts New Concept in Boston
New Albany, OH-based Abercrombie & Fitch, operator of 202 abercrombie stores, 444 Hollister stores and 21 Ruehl stores in the U.S., has debuted a new concept in the upscale Natick Collection in the Boston area. Gilly Hicks an underwear brand, designed to conjure up images of Australia's "Down Under".

Luxury IPic Concept Opening Locations in TX and IL
Fort Lauderdale, FL-based IPic Entertainment currently operates only one store location in the U.S.; but its new concept has garnered attention from a wide audience. The Glendale, WI location is 38,000 square feet located on the second floor of the Bayshore Town Center mall and features an upscale bowling alley, luxury movie theatre, restaurant, and bar. The concept is led by Hamid Hashemi, founder and CEO of Muvico Theaters from 1984 to 2005.

The retailer says it will open four to six new IPics per year. Currently under development are locations in Glorypark, TX; Plano, TX; and Schamburg, IL. As part of a new development located between Dallas and Forth Worth, the Glorypark location will be 68,000 square feet and include eight movie screens, 18 bowling lanes, a 250-seat restaurant and bar, and a 350-seat live entertainment facility. Located at Lincoln Property's Village 121 development, the Plano location will be 55,000 square feet and include the same components minus the live entertainment facility and two bowling lanes. Located in a suburb of Chicago, the Schamburg location will be 55,000 square feet and include the same components as the Plano facility. The Texas sites will open in 2009 while the Chicago sites will open in 2008.

Ethan Allen Announces 10 New Stores Following 12 Closed Stores
CoStar recently informed readers that Ethan Allen was closing 12 design centers and two service centers over the next six months, as part of a consolidation effort into Ethan Allen's "Styles Studio", a 2,500 to 3,000-square-foot design center concept.

However, its not all bad at the furniture chain. In its recent second quarter report, the company delivered a 2.4% increase in net sales, 10.1% increase in retail division sales and .2% increase in design center sales.

Also over the next six months, Ethan Allen plans to open 8-10 full size design centers in the metropolitan areas of Denver, Philadelphia, Birmingham, Richmond, Sacramento, Clearwater, Sarasota and Austin. In addition, a flagship Ethan Allen will open on Third Ave and 60th Street in Manhattan.

Captain D's and Del Taco Adding 91 Restaurants
Lake Forest, CA-based Sagittarius Brands, parent company of the Captain D's and Del Taco restaurant chains, added 37 new restaurants in 2007, including its 500th Del Taco restaurant. As of the close of the year, the company has deals signed for 91 new restaurants to open over the next several years. The typical Del Taco is a 2,260-square-foot building with drive-thru on a half acre outparcel. The typical Captain D's is a 2,700-square-foot building with drive-thru on a three-quarter-acre outparcel.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.





NEW SUPPLY


Tucker Development to Invest $1.5B in NJ Retail and Mixed-Use
Tucker Development, shopping center and mixed-use developer with properties in IL, WI, MI, PA and NJ, plans to invest as much as $1.5 billion to develop retail, mixed-use and transit-oriented projects in New Jersey.

A bold move after the company's recent opening of a Newark office. Best known for its work in the Midwest, Tucker's 12 years in business has resulted in the development and acquisition of a portfolio exceeding 4 million square feet.

TDC President & CEO Richard H. Tucker said, "We view New Jersey as offering tremendous growth prospects in urban, transit oriented and smart growth development and redevelopment..our patient capital (is) designed to invest in new development and acquisition opportunities, we expect strong deal flow in the state."

Lee Peyser of TDC added, "In the current market, where liquidity continues to dry up and many real estate developments have slowed or have come to a complete halt, we will consider strategic partnership opportunities."

Kimco to Move Forward on De-Malling of Factoria in Bellevue
Kimco Redevelopment Group has received approval to turn the 500,000-square-foot Factoria Mall in Bellevue, WA into a mixed-use lifestyle center. Kimco acquired the property in December 2004 from World Co. for $99.8 million in partnership with Schottenstein Management, specifically with de-malling in mind.

Aside from converting the interior common areas and creating and outdoor dining setting with pedestrian plazas, Kimco will add 151,000 square feet of retail space and more than 400 apartment units.

The project will commence with the demolitition of a vacant Mervyn's department store box in the middle of this year. Full completion for the new Marketplace at Factoria is scheduled for 2011.

Tenants at Factoria include Safeway, Rite Aid, Nordstrom Rack, DSW Shoe, TJ Maxx, Old Country Buffet, Old Navy, Petco, Target, Old Navy, Big 5 Sporting Goods, and more.

Ainbinder Breaks Ground on 550,000-SF Plano Lifestyle Center
Houston-based Ainbinder Company, developer of more than 2 million square feet of shopping center space, has commenced construction on High Street at Stonebriar, a 550,000-square-foot mixed-use lifestyle center development located on 35 acres bordering Hwy 121 and Parkwood Blvd in Plano, just north of Dallas.

While lease negotiations are underway to secure upscale restaurants and retailers for the project's first phase, Ainbinder has secured The Container Store as its first tenant, which will be opening this June. The company plans to lease 60% to 70% of the retail space to national retailers, with the remainder being occupied by local and regional shops and restaurants.

Stonebriar's second phase will consist of 250,000 square feet of retail space and 100,000 square feet of office space. A boutique hotel is also in the works.

UCR Urban, the specialty retail division of United Commercial Realty, serves as leasing agent on the project.

Resource Development to Start 625,000-SF Tulsa Project
Resource Development has been chosen by the city of Claremore, OK (near Tulsa) to develop Oklahoma Plaza, an $110 million mixed-use lifestyle center to be constructed on 129 acres just off State Hwy 66. The plan is to create a 625,000-square-foot retail, office and residential project.

Scheduled to start clearing soon and breaking ground in early summer, an 100-room Wyndham hotel and a 14-screen movie theatre have been secured. Completion of the Plaza's first phase is mid-2009.

The residential portion will eventually include 225 single family homes, 100 apartments and 30 luxury residences. In addition to multiple ponds and water features, the project will include an outdoor amphitheatre and an 1-mile linear park.

Although Resource Development has $1 billion in retail projects in its pipeline, this one will be its largest and will result in a significant expansion of the company's staff.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.





ACQUISITIONS / MERGERS / SALES


Inland American Looking to Acquire Cedar Shopping Centers
Cedar Shopping Centers, Retail REIT with a portfolio of 118 primarily grocery-anchored shopping centers totaling more than 12 million square feet, has become the apple of Inland American's Eye. Inland American Real Estate Trust already owns a 9.8% share in Cedar stock, but said last week that it is interested in acquiring the company, or at least gaining representation on Cedar's board.

In order for Inland to accomplish a higher level of ownership in the company, it has requested that Cedar waive its rule that no one person or group may own more than a 9.8% share in the company. Analysts say if Inland makes an offer, the expected share price would be at least $13-per share; a more than 20% premium over the company's current stock price.

Cedar recently released 2008 guidance, saying it expects to maintain portfolio occupancy of 96%, no rent growth, same store revenue growth of 1.4%, and to complete the development/ redevelopment of $350 million in projects.

Retail Ventures Sells 81% Share in Value City Chain
Columbus, OH-based Retail Ventures operates 113 Value City Department Stores in the Midwest, mid-Atlantic and southeastern U.S., 36 Filene's Basement stores in the Northeast and Midwest and 259 DSW stores across the country.

Last October, CoStar informed readers that RVI is selling 24 Value City stores, scheduled to close by March 2008, to Burlington Coat Factory as part of an ongoing effort to explore strategic alternatives for its Value City chain.

RVI last week announced the disposition of 81% of its ownership interest in Value City to VCHI Acquisition Corp., a new company formed by VCDS Acquisition Holdings, LLC, Emerald Capital Management LLC and Crystal Value, LLC. Under terms of the transactions, Retail Ventures receives no proceeds and instead pays a $500,000 fee to VCHI; who will purchase 150,000 common shares at $10.00 per share.

In its recent third quarter report, RVI showed a 12.5% decrease in total sales and 13.4% decrease in comparable store sales at the Value City chain.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.





CLOSINGS/CUTBACKS/BANKRUPTCIES


Buffet Holdings Sorting Out Underperformers Amongst 626-Unit Fleet in Chapter 11
Eagan, MN-based Buffet Holdings, a subsidiary of Buffets, Inc., has filed for Chapter 11 reorganization. The company operates approximately 626 restaurants in 39 states under banners Old Country Buffet, Country Buffet, Hometown Buffet, Ryan's Grill Buffet & Bakery, Fire Mountain Grill, and Tahoe Joe's, The restaurateur reported $1.15 billion in debt and $936 million in assets.

The company commented on the external factors it blamed for its recent decline in operating performance, "The leading factor has been a significant decline in discretionary spending among its core customers. Higher gasoline and energy costs, increased debt service loads due to rate increases on adjustable rate mortgages, lower consumer confidence and the general economic downturn have been the greatest consumer strains. The disappearance of readily available credit has compounded their burden, caused by the collapse of the sub-prime mortgage market, stagnant home valuations, and lower available home equity due to previous consumer refinancing efforts. Additionally, the increases in labor costs due to increases in minimum wage rates, food costs and energy expenses have materially increased the Company’s costs."

A group of the company's existing lenders, including Credit Suisse, have provided it with a $385 million credit facility; $85 million of which it will use to finance the reorganization and $300 million it will use in post-bankruptcy.

Buffet Holdings employs approximately 37,000 and said that although it will keep its restaurants open through the reorganization process, it will evaluate its portfolio to identify underperforming locations that may not make sense to keep in the long-term. A typical restaurant is 9,500 to 11,000 square feet and located in-line or end-cap in a big-box anchored shopping center.

Private equity company Caxton-Iseman Capital took Buffet Holdings private in 2000 and in 2006, the company acquired the 340-unit Ryan's Restaurant Group for $835 million; a deal some say was more debt than the restaurateur could handle.

Sprint Nextel Closing 125 Company Stores, 4,000 Distribution Points
After losing more than 880,000 net users during fourth quarter, Sprint Nextel (NYSE: S) announced a plan to streamline its business in anticipation of "continued downward pressure on subscriber trends, revenues, and profitability in 2008." The company will be eliminating 4,000 employees, eliminating 4,000 third-party distributors, and closing 125 company-owned retail stores; the latter of which amounts to 8% of its 1,400-store company owned fleet. As a result of these moves, Sprint says it will save $700-$800 million in labor costs.

Cost Plus Closing 18 Stores, Exiting 8 Markets
Oakland, CA-based Cost Plus, Inc. (Nasdaq: CPWM), operator of 298 "casual home living and entertaining" stores in 34 states, last week confirmed 2008 will produce no net new stores for the retailer.

The company will be exiting eight markets via the closing of eighteen more stores this year (it already closed one store in January); but will be adding 17 new stores in states it already operates. Additionally, Cost Plus is cutting back its workforce by 10% through "consolidation of functions and automation."

President and CEO Barry Feld commented, "The workforce reduction and the closure of underperforming stores are necessary to complete the turnaround in the midst of a challenging retail and economic climate.”

Although Cost Plus' holiday performance was its best since fiscal 2004; the retailer reported a slight decline in net sales and 3.4% decline in same store sales for the nine-week period of holiday 2007. The company's third quarter results were reported in early December and included year-to-date flat net sales, a 6.7% decrease in same store sales and $43 million net loss.

The average Cost Plus World Market is 15,700 square feet and serves as a junior anchor in a power shopping center.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.





SUSTAINABILITY/ GREENING


Wal-Mart CEO Pledges for Supplier Energy Efficiency within 3 Years
At an annual manager's meeting last week, Wal-Mart pledged to take a leadership role in the industry on issues of international trade, climate change, water shortages, social and economic inequities, infrastructure and foreign oil.

Wal-Mart says it will require its suppliers to meet specific environmental, social and quality standards and it will make compliance with those standards part of its contracts. The goal is to work with suppliers to make the most energy-intensive products in Wal-Mart stores 25% more energy-efficient within three years.

Wal-Mart Completes First Solar Power Roof Project
Wal-Mart Stores, Inc. (NYSE:WMT) and SunPower Corporation (NASDAQ:SPWR) today announced the completion of a 390-kilowatt solar power system on top of a Sam's Club store roof in Chino, CA. The store is the first of 22 Wal-Mart and Sam's Club stores and distribution center in California and Hawaii slated to receive such systems; via SunPower or other solar providers. "By Wal-Mart's estimates, installing the solar power systems will help reduce greenhouse gas emissions by 8,000-10,000 metric tons per year," said David Ozment, director of energy for Wal-Mart.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.





PERSONNEL CHANGES


Sears Reorganizes, Replacing CEO
Sears Holdings last week revealed a reorganization into five business units; operating businesses, support, brands, online and real estate. Each unit will have separate leadership advised by Sears executives and will report separate profit and loss statements.

And today, Sears announced current president and CEO, Aylwin B. Lewis, is leaving the company effective Feb. 2nd (the end of Sears' fiscal year) and is being replaced by interim CEO Bruce Johnson, who currently serves as EVP of supply chain and operations.

Chairman Ed Lampert commented, "We are entering a new phase in Sears' evolution as a multi-channel retailer, as reflected by the new operational structure we recently announced, and the board has determined that now is the right time to put in place new leadership to take the company forward. As we realign Sears into five different types of focused business units, we will be redefining how our leaders operate by giving them greater autonomy and accountability for their businesses. We intend to put in place an operating model that allows managers to act with the flexibility and speed required in today's dynamic and highly competitive marketplace."

Sears holiday 2007 results included a 2.8% decline in same store sales at Sears stores and 4.2% decline at Kmart stores. The company's third quarter results, reported at the end of November, included a 4.2% decline in Sears comparable store sales and 5% decline in Kmart comparable store sales, and net income of only $2 million in comparison to $196 million in net income third quarter 2006.

Prevailing speculation is that the reorganization may result in the sell-off of a substantial amount of Sears real estate; at perhaps one of the most inopportune times.

Shea Properties Appoints VP of Construction
Alison Viejo, CA-based Shea Properties, real estate investment company with a portfolio of office, industrial and retail property totaling 5 million square feet, and another 5 million square feet in the pipeline, has hired Jeff Cunningham as senior vice president of construction management.

Cunningham will oversee the construction of all of Shea's projects throughout California, which includes the 400-acre Dunes on Monterey Bay; the 820-acre Legacy Park at the former Tustin Marin Corp Air Station, and the Collection at RiverPark mixed-use community in Oxnard, CA.

Cunningham's 30 years of experience in engineering, project management and construction management includes leading construction on projects including The Block at Orange in Orange, CA; Downtown Disney in Anaheim, CA; Fashion Island in Newport Beach, CA; Fashion Valley in San Diego, CA; and Otay Ranch Town Center in Chula Vista, CA.

Vice president / division manager of the California Division of Bayley Construction was Cunningam's most recent post; he served at the company for approximately 30 years.


(Editor's Note: To keep up on happenings and trends in retail real estate, subscribe to CoStar's Retail News Roundup, a weekly column covering retailer expansions and new concepts, store closings, bankruptcies, cutbacks, acquisition, mergers, sales. new shopping centers, personnel changes, and sustainability. Follow this link for access to back issues of the roundup. In addition to appearing every week in the national news and retail news sections of our web site, you may also receive the Retail News Roundup for free via email by requesting to be added to the distribution list by contacting senior editor, Sasha Pardy at spardy@CoStar.com Also, click here to subscribe to CoStar's dedicated Retail RSS Feed.



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