According to a report in The New York Times, 191 big-box stores have been closed through the first five months of 2004. That pace would put this year’s closings well behind those of the last two years: 2003, when 679 stores of 75,000 square feet or more were closed; and 2002, which saw 760 big boxes close.
The statistics, from Marcus & Millichap Real Estate Investment Brokerage Co. (Encino, Calif.), a national real estate investment brokerage company, reveal that 109 Wal-Mart store closings make up the lion’s share of this year’s numbers. In 2003, the closings were led by Kmart (317), Toys “R” Us (182) and Best Buy (110). In 02, Kmart closed 283 big boxes, Service Merchandise 218 and Jo-Ann Stores 50.
The Times reported that Wal-Mart has sold or leased 50 million square feet of space over the last five years, quoting a company spokesperson. As of mid-May, the company was seeking tenants for all or part of about 300 of its former stores, said Hessam Nadji, the managing director in charge of research at Marcus & Millichap. Defunct Wal-Mart and Sam’s Club stores have been reborn as Autohaus Pompano, a Mercedes-Benz dealership in Pompano Beach, Fla.; Thomas Medical Center, an outpatient surgery and diagnostic center in Daphne, Ala.; Mercado Azteca, a Mexican-style market in Irving, Texas; ,and an APAC Customer Services call center in Corpus Christi, Texas. Other Wal-Mart stores have been transformed into churches, police headquarters or schools.
Other national big-box chains, like Lowe’s and Home Depot, might buy an abandoned superstore for its site but are likely to demolish the existing building and replace it with a prototype store designed for heavier floor loads. Home Depot recently announced plans to buy as many as 24 Kmart stores. A spokesman said some would be torn down and others would be converted to Home Depots.
While many supermarket chains willingly move into previously occupied grocery stores to avoid the cost of installing new refrigeration, The Times reported that Publix prefers to start from the ground up. “They say it’s cheaper and more cost-effective to build it exactly their own way,” said Suzanne Chen, president of the Retail Realty Group Inc. (Tampa, Fla.). But Chen said she had placed discount retailers like T. J. Maxx, Marshalls and Ross Dress for Less in second-generation spaces.