Shoppers lined up over the weekend at Pier 1 imports locations in Wilmington, where signs advertised going-out-of-business sales.
For Wilmington, the Pier 1 wind-down means large, prominent retail spaces could be available soon at Hanover Center on Oleander Drive and Mayfaire Town Center (pictured below)
off Military Cutoff Road.
At Hanover Center, the 11,000-square-foot space has already garnered some potential-tenant interest, said Randy Kelley, principal of Harbour Retail Partners, one of the center's joint venture owners.
But the Pier 1 closing announced May 19 is relatively new.
"We're still strategizing and trying to position ourselves for what's next," Kelley said. "It could be two tenant spaces. It allows us some flexibility in how we reimagine the space."
A furniture, housewares and home decor retailer founded in 1962, Pier 1 is closing all of its stores after filing for bankruptcy and exploring other options.
“This decision follows months of working to identify a buyer who would continue to operate our business going forward. Unfortunately, the challenging retail environment has been significantly compounded by the profound impact of COVID-19, hindering our ability to secure such a buyer and requiring us to wind down,” stated Robert Riesbeck, Pier 1’s CEO and CFO, in a news release May 19.
As for a timeline, the release stated, in following with bankruptcy procedures, Pier 1 "has proposed July 1, 2020 as the asset bid deadline, July 8, 2020 as the auction date
and July 15, 2020 as the sale hearing date."
The Pier 1 space at Mayfaire Town Center is 10,414 square feet.
"Our leasing team is in active discussions with a number of replacement tenants," stated Catharine Wells, senior director of marketing operations for center owner CBL Properties, in an email. "However, we are unable to share additional details until plans are finalized and leases executed. We’ll be excited to share more details as plans move forward and are finalized."
Larger spaces can be a challenge to fill, said Mark Johnson, executive vice president/sales manager of Wilmington-based Coldwell Banker Commercial Sun Coast Partners.
"When we see retail tenants in this town, so often they're looking for 1,500 to 2,000 square feet," said Johnson, who is not involved in listing the Pier 1 spaces in Wilmington. "Finding larger users is more difficult."
At Hanover Center, the space has advantages, Kelley said.
"I think it's positioned well at the light there at Floral [Parkway] and Oleander. It's got great visibility, and we think it's a great space," he said. "I think we'll continue to evaluate all options as we work through COVID and the state phased reopening strategy."
Pier 1 was one of the nation's struggling retailers long before measures were enacted to slow the spread of the coronavirus pandemic. But retail, perhaps even more than other industries, has taken another enormous hit as a result of those measures, experts say.
"After spending nearly 17 years in department store retail (corporate/ financial side) I can tell you that industry has been struggling for a very long time," Johnson stated in an email Tuesday. "The Macy’s CEO recently tried to put a positive spin on what’s happening with bankruptcies and store closings by pointing out that there’s going to be a lot of business on the table for the survivors. While that’s probably true, I don’t believe it will stop the decline -- just slow it down for some of the large players."
He said he thinks "the industry expects to see an accelerated pace in the shift to online sales that will outlast this current crisis. As CRE professionals, some of this transition will be up to us -- finding creative ways to repurpose malls, large anchor tenant spaces and free-standing big-box locations.
"Industrial/distribution properties continue on a steep upward swing everywhere we do business, reflecting this shift in shopping habits. Not to mention that we may very well see further resurgence in manufacturing/assembly here in the US as global supply chain issues illuminate our vulnerabilities in certain areas."
Johnson said the retail tenants he's concerned about are the small mom-and-pop businesses and regional stores.
"We’re seeing landlords work with many tenants to relieve some of the pressure -- but these landlords aren’t immune to the pain either. Many are not huge conglomerates that can weather the storm or flex their muscle to get debt relief. Our property management division is coming up with creative solutions to help restructure rent payments, while making the landlords whole (or close to whole) over time.
"But we’re also seeing some large, publicly traded companies try to take advantage of landlords too -- and some are doing very well in this crisis. Government help for small business -- retail specifically -- is still critical as we’re hearing many have not been successful with getting PPP money."
Jason Swain, developer with Swain & Associates, which manages The Forum on Military Cutoff Road and has shopping centers throughout the state, said small businesses can be resilient.
"If you have people who are really involved in their businesses, they've got some real ingenuity and can do some really creative things," Swain said.
He added, "We're partners with a whole lot of small business users, and it has been really important since the beginning of the pandemic for us to make sure that those people survive the economic uncertainty and come out on the other end as strong or stronger than they were."
According to the International Council of Shopping Centers, the industry experienced an estimated $8 billion in lost sales in March, with 12.2 million jobs lost in retail, restaurant and other tenant categories in March and April and more than $16 billion in lost rent in April, nearly $20 billion in May.
The ICSC shared the information in its policy recommendations
for additional COVID-19 relief.
"Our entire industry is at risk if further action to support it is not taken," the recommendations state.