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R.I.P. Dunlaps Dept. Stores (1890 -- 2007)

DJM Realty Charged With Disposing of 38-Store Portolio
June 12, 2007
From 1890 to 2007: Historic Dunlaps Department Store Chain Closing its Doors
From 1890 to 2007: Historic Dunlaps Department Store Chain Closing its Doors
Earlier today, DJM Realty co-president Emilio Amendola confirmed to CoStar that Dunlaps, a 117-year-old department store chain based in Fort Worth, is closing its doors for good as part of a company-wide liquidation.

One of the last remaining "home-grown" department store chains, Dunlaps was founded as a general store in 1890 by H.G. Dunlap who, with his three sons, grew the company into a 20-store Oklahoma chain. In 1921, the Dunlaps decided to move to California and start over. But while the original Dunlaps never did get back into the business, one of their general managers, Retha Martin, took over the chain and, capitalizing on the Texas oil boom, set up headquarters in Lubbock and began acquiring store sites. By 1943 there were 14 Dunlaps open in West Texas and New Mexico. Dunlaps is still owned by the Martin family. But now, more than six decades later, they have decided to close the discount department chain after several years of declining sales and an unsuccessful attempt to find a buyer.

The retailer has enlisted Melville, NY-based DJM Realty to negotiate lease terminations and arrange subleases of its 38 stores; while DJM's parent company, Boston-based Gordon Brothers, has been retained to facilitate asset and inventory liquidation.

Amendola said that he expects DJM will be successful in deploying 35% to 50% of the stores to one group, with the remainder completed in one-off transactions, and confirmed that DJM is "already working on more than a few deals" for the Dunlap portfolio. "Sometimes the easiest way to get into a market is to buy a market. There's no better way to expand presence than with one acquisition."

Dunlaps stores average 32,000 square feet, although its largest store in Beaumont, TX is 50,000 square feet. The stores are located in third and fourth-tier markets and reside primarily at community and neighborhood shopping centers, although seven stores are located in regional malls.

Texas stands to see the biggest impact from Dunlaps closures. A total of 22 stores are located in the state. Others include AK (4),CO (3), NM (3), AL(2), AZ (2), KS (2), and OK (2). Amendola told CoStar that the company's best-performing store is a 42,000-square-foot location on 50th Street in Lubbock.

Dunlaps stores are available entirely through subleasing or lease assignment. The average lease rate of the portfolio is $6.00-per-square-foot, although properties are available for $1.50 to $9.00-per-square-foot.

DJM Realty is a national retail disposition firm that has been successful in mass store dispositions before; last year it sold 120 Casual Corner and Petite Sophisticate stores to Charming Shoppes and assigned or terminated the leases of the chain's remaining 980 doors. In addition, it facilitated the sale of 126 former Kids 'R Us stores to Office Depot a couple years ago. Large disposition clients in DJM's current portfolio include Comp USA, Discovery Stores, Big Lots, Bombay, Tweeter, Dollar General, Waldenbooks, Yum Brands and more. To read more about the national retail disposition industry, click here.
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