Also This Week in Closures & Downsizings: Trigild Named Liquidating Trustee for $50 Million Portfolio of Retail Properties; and Facility Closures in New York involving nearly 7,000 workers
RadioShack Corp. reported an 8.4% comparable stores sales decline and a loss of $112 million for the third quarter ended Sept. 30, as it engineers a comprehensive operational turnaround driven in part by a plan to “reinvigorate the store experience” and improve operational efficiencies.
While the struggling Fort Worth, TX-based retail chain with 4,291 company-operated stores, said it has not finalized its 2014 real estate plan, it acknowledged that it is looking at its real estate footprint on a market-by-market basis.
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"We are moving forward quickly and as planned with our turnaround efforts. As we have said, we expect our work to take several quarters and during that time our results will vary quarter to quarter as we make strategic changes to improve our long-term financial performance,” said Joseph C. Magnacca, CEO of RadioShack.
"We have an aggressive plan to reinvigorate our store experience this fall in nearly all of our stores. This plan builds upon the sales improvement we've seen in three concept stores and two brand statement stores,” Magnacca continued. “By the end of the year, we will have over 100 concept and brand statement stores open.”
When pressed by analysts on the company’s earnings conference call last week, whether repositioning 100 stores this year was moving fast enough considering the size of its store portfolio, Magnacca said, “Yes.”
“I think we've been pretty aggressive in what we've been able to do this year, keeping in mind that we settled in here in mid-February and started to look at real estate specifically,” Magnacca said. “So yes, do I think 100 stores is a lot. But when you look at 4,400 as part of your chain, I can see why there would be some concern on how we move that forward. That's why I look at it and say that the benefit of those 100 stores or what we've applied to those 100 stores is really being characterized in over 2,000 locations.”
Next year, Magnacca said it would do at least base level renovations on another 2,000 locations.
“We believe that by the end of '14, we will probably have touched all but 600 locations in a meaningful way,” Magnacca said.
As for store closures, RadioShack has closed 107 stores in the first nine months of this year after deciding not to renew their leases. Magnacca said last week that it hadn’t “baked” its 2014 real estate plan yet.
“As far as closing stores, it's a market-by-market decision, but there is no plan for us to exit a large number of stores. In fact, if you kind of look at our business on a store-by-store basis, you'll see that we believe it's more of a business model opportunity than it is about closure of stores,” he said. “Sometimes the market has moved away from our location. And that's what the real estate team is working hard on right now, is to make sure that we stay current.”
Morningstar analyst Liang Feng told the Dallas Business Journal that he was “alarmed at the pace of the firm’s deterioration.
“I was pretty down on my forecast,” the Dallas Business Journal quoted Feng as saying. “But they did significantly worse.”
“When you’re generating significant operating losses, you can’t afford to have a gradual rebranding process,” Feng was reported as saying. “They need to show positive results quickly.”
Feng said last quarter he would’ve given the retailer a two- to three-year timetable to improve results. After its third-quarter results and based on the pace of losses, he cut it back to one year.
Trigild Named Liquidating Trustee for $50 Million Portfolio of Retail Properties
Trigild - a San Diego-based real estate firm specializing in property/asset management and fiduciary services, was appointed liquidating trustee for a $50 million portfolio of 37 strip centers encompassing 600,000 square feet of retail space
Following its appointment by the United States Bankruptcy Court Northern District of Indiana, South Bend Division, Trigild will now seek to sell real estate and other assets on behalf of creditors.
In June, Coldwater Portfolio Partners LLC, tapped Trigild to take over day-to-day operations - including lease administration and maintenance operations - for the properties, located in 17 states throughout the Southeast, West and Midwest, including Iowa, Colorado, Michigan, Illinois, Michigan, Louisiana, Wisconsin and Indiana.
In this next phase, Trigild will begin disposition options for the properties.
“We will facilitate the disposition via a third party broker as well as research options which will create the most value for our client,” said Brian Morelan, managing director of commercial real estate
The retail centers range from 9,000 to 37,000 square feet, consist of two to seven tenants and are shadow-anchored by a Wal-Mart Super Store.
The property locations are as follows.
· 1100 North Barlow Rd., Fort Morgan, CO
· 1867-1896 US Hwy 82, Tifton, GA
· 3005 Wiles Blvd., Cedar Rapids, IA
· 1319 Holton Dr., Le Mars, IA
· 12547 State Route 143, Highland, IL
· 504-503 S. Dunlap Road, Savoy, IL
· 1220 N 200 West, Angola, IN
· 1220 & 1400 North Wayne St., Angola, IN
· 2020-2040 North Main St., Bluffton, IN
· 2216-2224 Cassopolis, Elkhart, IN
· 350-354 Hoke St., Frankfort, IN
· 2474-2488 E. Wabash, Frankfort, IN
· 1748-1752 Indianapolis, Greencastle, IN
· 1110 West Broadway, Monticello, IN
· 1625-1633 N. Michigan Rd., Plymouth, IN
· 3697 Portage Rd., Southbend, IN
· 2520-2572 Walton Blvd., Warsaw, IN
· 102-106 Peter Pan Rd., Independence, KS
· 200 Production Dr., Lafayette, LA
· 355 S. Willowbrook Rd., Coldwater, MI
· 354 E. Chicago St., Coldwater, MI
· 114 Centerville Rd., Sturgis, MI
· 1350-1358 Centerville Rd., Sturgis, MI
· 1651-1659 Highway 10 West, Detroit Lakes, MN
· 1151 Ryans Rd., Worthington, MN
· 1212-1314 Independence St., Republic, MO
· 3530 & 3450 W. Sunshine St., Springfield, MO
· 3202 Belt Highway, St. Joseph, MO
· 1633 & 1749 Main St., Billings, MT
· 201 E. Leota St., North Platte, NE
· 3410 & 3506 Ave I, Scottbluff, NE
· 621-627 12th Ave., Norman, OK
· 5615-5623 E. Arrowhead Pkwy., Sioux Falls, SD
· 173 Tovera Rd., Alvin, TX
· 12950 Willow Centre Dr., Houston, TX
· 1322 South Providence Center Dr., Cedar City, UT
· 224-231 West McCoy St., Tomah, WI
Facility Closures & Downsizings
Overland Storage Inc.
amended the lease for its corporate headquarters at 9112 Spectrum Center Blvd. in San Diego reducing the rentable space
from 91,300 square feet to 51,065 square feet. In doing so, it reduced the monthly base rent from $165,102 to $125,000 through March 2014, and then to $62,500 through September 2014, with yearly 3.5% increases thereafter. The company also extended the expiration date from Feb. 28, 2014, to March 31, 2019, and agreed to pay common area expenses and R&D building expenses for that portion of the original space which is not occupied during a calendar year.
|Company||Address||City||State||Closure or Layoff||No. of Layoffs||Impact Date|
|Citigroup||188 King St.||Armonk||NY||Layoff||36||11/7/2013|
|Northrop Grumman Systems Corp.||600 Grumman Road West||Bethpage||NY||Layoff||143||11/12/2013|
|Abigail Kirsch II d/b/a Abigail KirschThe New York Botanical Garden||200th St. and Southern Blvd.||Bronx||NY||Closure||66||12/18/2013|
|Interfaith Medical Center||1545 Atlantic Ave.||Brooklyn||NY||Closure||1,543||TBD|
|JPMorgan Chase & Co.||4 Chase MetroTech Center||Brooklyn||NY||Closure||19||TBD|
|Niagara Ceramics Corp.||75 Hayes Place||Buffalo||NY||Closure||110||Immediately|
|Will Poultry||1075 William St.||Buffalo||NY||Closure||113||12/28/2013|
|Pan American Hotel||79-00 Queens Blvd.||Elmhurst||NY||Closure||45||1/7/2014|
|Residence Inn by Marriott||14 Schuyler Blvd||Fishkill||NY||Closure||31||1/13/2014|
|Keywell ||300 Falconer St.||Frewsburg||NY||Closure||49||Immediately|
|E.J. Noble Hospital||77 W. Barney St.||Gouverneur||NY||Closure||210||12/31/2013|
|Personal Communication Devices ||80 Arkay Drive, Suite 210||Hauppauge||NY||Closure||78||Immediately|
|QPH Inc. d/b/a Holliswood Hospital||87-37 Palermo St.||Holliswood||NY||Closure||376||TBD|
|TLC Health Network/Lake Shore Health Care Center||845 Routes 5 & 20||Irving||NY||Closure||438||1/31/2014|
|Duane Reade||55-02 55th Ave.||Maspeth||NY||Layoff||175||12/5/2013|
|Baxter Healthcare Corp.||711 Park Ave.||Medina||NY||Layoff||91||1/3/2014|
|Landauer Metropolitan||One Bradford Road||Mt. Vernon||NY||Closure||296||Immediately|
|Sound Shore Health System Inc.||16 Guion Place||New Rochelle||NY||Closure||1,993||11/5/2013|
|G4S Government Solutions||26 Federal Plaza, Room 2-130||New York||NY||Closure||255||Immediately|
|Focus Features||65 Bleecker St., Suite 2||New York||NY||Closure||42||12/31/2013|
|Bloomberg Law Unit||731 Lexington Ave.||New York||NY||Closure||95||12/31/2013|
|Atlantic & Pacific Grill Associates, c/o Fourth Wall Restaurants (Park Avenue Café)||100 E. 63rd St.||New York||NY||Closure||135||1/1/2014|
|7 East 54th St. , dba Bice Ristorante||7 East 54th St.||New York||NY||Closure||66||1/1/2014|
|Smithfield Associates -Pastis Restaurant||9 Ninth Ave.||New York||NY||Closure||200||1/1/2014|
|Friendly's Foods dba Pulino's Bar & Pizzeria||282 Bowery||New York||NY||Closure||83||1/5/2014|
|TGI Friday's||484 8th Ave.||New York||NY||Closure||77||1/19/2014|
|Wenger NA||15 Corporate Drive||Orangeburg||NY||Closure||48||1/31/2014|
|Zip-Pak||171 Route 303||Orangeburg||NY||Closure||41||TBD|
|Asteelflash US East Corp.||941 State Route 38||Owego||NY||Layoff||34||1/17/2014|
|Pfizer||401 North Middletown Road||Pearl River||NY||Layoff||70||12/17/2013|
|Bausch & Lomb Inc./Valeant Pharmaceuticals||One Bausch and & Lomb Place||Rochester||NY||Layoff||106||11/3/2013|
|Adecco Group||158 Wallace Way||Rochester||NY||Closure||75||2/1/2014|
|Pfizer||64 Maple St.||Rouses Point||NY||Closure||37||12/31/2013|
|Travelers Indemnity Co.||440 S. Warren St.||Syracuse||NY||Closure||159||9/30/2014|
|Bayer HealthCare ||555 White Plains Road||Tarrytown||NY||Closure||17||TBD|
|Xerox Business Services||501 Bleeker St.||Utica||NY||Closure||31||12/31/2013|
|Eco International||200 Stage Road||Vestal||NY||Closure||82||12/31/2013|
|Circor Flow Technologies (Spence Engineering Co.)||150 Coldenham Road||Walden||NY||Closure||55||2/28/2014|
|Legal Sea Foods ||5 Mamaroneck Ave.||White Plains||NY||Closure||41||12/22/2013|
|Allstate Insurance||425 Essjay Road, Suite 100||Williamsville||NY||Closure||48||12/16/2013|
|AmeriGas Propane||271 Merritt Ave.||Wyandanch||NY||Closure||14||Immediately|
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