business closures:

At shopping plazas, anchors aweigh

Most every plaza has an ‘anchor,’ or a large store that draws traffic to smaller ones nearby. Across the city, shopkeepers are feeling the drag of big closures

Chris Morris

By Brian Eckhouse (contact)

Wednesday, Jan. 28, 2009 | 2 a.m.

Winterwood Pavilion

Archive of Sun business stories

Valley’s four Circuit City stores among 567 to close (1-16-2009)
Struggling to hang on (11-24-2008)
Slowdown not sparing many Vegas locales (6-2-2008)

The Winterwood Pavilion at Nellis Boulevard and Sahara Avenue seemed to be doing just fine until, on Christmas Eve 2007, the Vons supermarket closed.

Since then, three stores to the right of the old Vons and four to the left have closed. Among the remaining tenants, a jewelry store won’t renew its lease in June and the manager of a smoke shop says revenue has plummeted 75 percent.

At the Spring Valley Town Center on Rainbow Boulevard at Flamingo Road, where a drugstore and an Albertsons supermarket closed, seven storefronts in a row stand empty.

And at the Rainbow Dunes Centre up the road, where a discount retailer closed a few years ago, 10 of the other 12 stores are vacant.

For reasons ranging from marketing decisions to the recession, shopping center anchors are closing valleywide, leaving gaping retail holes and triggering a wave of commercial blight and stripping smaller businesses of their customers. Some mall owners, struggling to fill vacancies, are offering unprecedented deals fill empty storefronts and stave off their own foreclosures.

Once an anchor closes, the retail blight spreads.

Boulder Market Place

At Henderson’s Boulder Market Place at Boulder Highway and Major Avenue, Albertsons was the first to leave. Since then, a drugstore, a video store and three smaller stores have closed. Phil Dunning, a commercial real estate salesman with MDL Group, says he’s fighting the perception that the Boulder Market Place is a “dead center.”

Customers usually are drawn to specific shopping centers because of their proximity or loyalty to a supermarket or other major store — and once they’ve parked, they patronize the smaller stores, says Debra March, the executive director of the Lied Institute for Real Estate Studies Program. If an anchor closes, shoppers may forsake the center’s smaller stores and take all of their business elsewhere.

Applied Analysis, the local market research firm, says 17 anchor stores around the valley are closed. CB Richard Ellis estimates that more than 30 anchors in excess of 20,000 square feet are empty.

“We haven’t witnessed this level of retail closures in our history,” says Brian Gordon, a principal at Applied Analysis.

And it’s only going to worsen.

Circuit City plans to close its stores nationwide in March, including four here. On Feb. 4, The Great Indoors, a home decor outlet under the Sears umbrella, will close a handful of its locations nationwide, including its Las Vegas store. Other closures include Linens N Things, Wickes furniture, Sports Authority, Levitz and Mervyns.

Two more Albertsons are closing in February, as well as four Lucky grocery stores. An Albertsons spokeswoman attributed the closings to stores not meeting their sales goals.

Paco Underhill of the international market research firm Envirosell predicts a 20 percent vacancy rate among all retail stores nationwide, and potentially higher in Las Vegas. And some analysts worry that contractual codependency, where one store’s departure allows others in a marketplace to leave, could deepen the crisis.

Commercial advisers are suggesting different uses for the anchor locations, including divvying the spaces for offices – perhaps a medical clinic that could boost foot traffic in sluggish strip malls. As an example of innovative planning, Underhill points to a once underperforming shopping plaza in Texas that was redesigned successfully as a Hispanic-themed marketplace with frequent live music.

Some market-themed changes are taking root in the Las Vegas Valley. Hispanic grocery Liborios Markets recently opened its second valley location, at an aging strip mall at Las Vegas Boulevard and Cheyenne Avenue in North Las Vegas, and is opening another one, at Charleston and Lamb boulevards, in about three months.

But Hispanic groceries won’t fill all anchor vacancies, and for the first time in decades, there’s little demand for these spaces. At the height of the boom, three or four anchor stores around the valley might have been vacant, Moore notes.

With no quick turnaround in sight, the small retailers are pleading for discounted rents.

Marty Mediate, manager of Cigarettes Cheaper! at the Boulder Market Place, says revenue has fallen 40 percent after Albertsons closed more than a year ago. He’s still selling cigarettes but it’s the people who used to buy his novelties – the bongs, baseball caps and gift items — who have stopped poking their head in the door because they’ve stopped coming to the mall altogether. Mediate appears to have no out: The lease expires in about four years, and he isn’t sure whether he can convince his landlord to reduce his rent.

At Winterwood Pavilion, Dougherty’s Fine Jewelry will close in June after more than 10 years there, when its lease expires. The reason is simple: revenues are off 50 percent since Vons closed. The store would have closed by now, were it not for loyal customers who prefer custom work and an unusual stipulation inserted into jeweler Margaret Garcia’s lease long ago: If Vons closes and isn’t replaced within three months, her rent is halved.

Discussion: 7 comments so far…

By bdover

1/28/09 at 12:52 p.m.

Suggest removal

Part of the problem is what store is an anchor. Albertsons is an expensive grocery store, and Boulder Highway isn't upscale in any way. A party supply store on Horizon Ridge lasted one year and was gone because the anchor tenant is a high dollar Vons grocery store that doesn't look too busy. Yet the party store on Marks has been there for a good number of years, primarily because it's in a Wal Mart Super Center area. I built several Mervyn's stores in the 80's, and could never figure out how they survived with their mainly clothing offerings in malls filled with similar retailers. Now they're gone. RIP....
By jfnance32

1/28/09 at 1:29 p.m.

Suggest removal

We should increase taxes to help with this store closing problem.

Business hire more people and expand their business whenever they are taxed more.
By lv2gen

1/28/09 at 4:46 p.m.

Suggest removal

Or maybe we could cut the business tax to zero and the benevolent corporations would give that money to the poor! Yeah, that would happen too.
By azsk8fan

1/29/09 at 5:36 a.m.

Suggest removal

Ya, I really want to hang out around Nellis and Sahara. I can't think of an 'anchor' store that would be special enough to draw me in. Maybe it's not the passing of the anchor stores - maybe it's the area in general.
By johnevegas

1/29/09 at 5:56 a.m.

Suggest removal

I saw this in the early 80's in the Bay Area. All over there were huge buildings with huge "For Lease" signs on them. By 1985, the same spaces were at a premium.

This is a huge reset, which was needed. But the rebound will come and may be coming already.

If I were to extrapolate my personal reality onto the greater financial situation, I would be hopeful. After months and months of dismal business and cash flow, we have seen a marked improvement in the last few weeks. Yes, prices are lower, but more customers are buying and planning to buy. And...many are paying with cash!
By perry161492

1/29/09 at 8:30 p.m.

Suggest removal

only way to fill up empty space make prostituion legal have strip club next to them. i see more and more empty space it get depressing looking at that stuff this town is no more boom town. school starting to suck. empty housing every place. only thing i can hope is that people start moving out of the stater yippee
By trixie

1/30/09 at 9:06 a.m.

Suggest removal

Sports Authority is NOT closing... this article is incorrect and needs a retraction.. this error has disturbed the employees of TSA.

Its more like Sports Chalet, if you noticed they are doing commercials.. they are hurting so bad that they hired a big advertising company to help them.. my opinion.. they need better customer service.

TSA doesn't need to do commercials..