Why was Belk not liquidated? In part, because most of its stores are in open air centers as opposed to enclosed malls.
Open-Air
Flat Line for Open-Air Big Box Openings & Closings /
At the end of 2020, these big box users had nearly 11,000 Florida locations totaling about 320M square feet.
Woolbright tracks the 105 brands that operate stores containing over 10,000 SF and with 15 or more locations in Florida. At the end of 2020, these big box users had nearly 11,000 Florida locations totaling about 320M square feet. The big boxes occupy 80% of the open-air GLA and as it goes for them, it goes for retail.
In 2020, the Florida the big box inventory remained unchanged with 347 openings and 341 closings. No change means there was no retail apocalypse in 2020. Sure, there were some big losers: Pier 1 closed 72 locations, Earth Fare closed 14, Lucky’s closed 21 and SteinMart closed 44; combined these groups, that liquidated their chains, shuttered about 3.0M square feet or just less than 1% of the box space in Florida.
But all the losses from the Florida’s big box closings were offset by new big box openings. Most of the 105 brands opened just a few stores each; however, there were a handful of companies that dominated the growth in 2020. Those standouts added at least 200,000 square feet of net space to their store network as shown in the table below.
Surprisingly, several notable retailers, that have historically driven the growth with new openings, did not open a single store in 2020 in Florida, those include Walmart, Costco, Home Depot, Lowes, Kohl’s, Marshall’s, and TJ Maxx. There will be more closings in 2021. One notable area to watch in 2021 is the merger of Staples and Office Depot which could result in a third of their stores closing. On the other hand, closings will be offset when the second richest guy and the 4th richest family in the world will open dozens of new grocery stores over the next few years in Florida as the grocery apocalypse begins in earnest, but that story is for another post.
Inequality in Open-air Retail Centers /
Open-air centers today are bifurcated into two worlds: centers with vacant boxes and those without any. The centers with one or more vacant boxes account for 70% of all the vacant space and they are on average 25% vacant. These are the problem centers. On the other hand, those without a vacant box are only 3-4% vacant, on average. Therefore, only about 15% of the centers are suffering right now and the remaining 85% are doing fine. Thus, inequality even plagues the land of open-air centers. To recover owners must find users to fill their empty boxes.
In my next post, I’ll discuss how many boxes opened and closed during 2020 and what lies ahead for centers with vacant boxes and whether open-air centers will drown in vacancy during 2021.