Payless bankruptcy could close Trumbull stores
Retailers can’t get a break in 2019.
The list of chain stores crumbling in the e-commerce era is increasing again as Payless ShoeSource prepares to file for bankruptcy this month. The company has two stories in Trumbull, at the Westfield Trumbull and Hawley Lane malls.
Friday reports by Reuters said that Payless was unsuccessful in finding a buyer for the company, prompting the Topeka, Kan.-based company to prepare for liquidation.
The discount shoe retailer is the latest in a series of companies to suffer a similar fate, including Charlotte Russe, Gymboree, Sears and Toys R’ Us, which have all left holes in malls and shopping centers and along commercial corridors.
Payless will shut down roughly 2,300 stores nationwide and get rid of its online platform. With dozens of store locations statewide, Connecticut will see even more vacancies brought on by an onslaught of retail chains calling it quits over the past year.
Industry observers say that the shifting consumer trends to "online shopping isn’t solely to blame for chain retailers faltering.
Failure to adapt to the shifting retail industry has also played a role, according to Professor Jose Mendoza of Sacred Heart University. Stores like Claire’s and Payless are suffering from big box stores closing, he said.
“When you have the anchors like Macy’s and Sears closing, then the foot traffic in the shopping malls gets reduced and these stores get effected,” Mendoza said. “It’s collateral damage from the big stores closing.”
Many of the companies also failed to leverage their online presence properly, he said. Most of the retailers have websites, but the majority of their business had been from foot traffic in shopping malls.
Given the current wave of brands shuttering their stores, Mendoza said he expects more to come.
Some shopping malls in southwestern Connecticut have also felt the sting of brand loss because they are left with vacant storefronts.
The fall of Sears last year dealt the Connecticut Post Mall in Milford its second major loss of a major retailer in the past couple years, behind JCPenney’s departure. The latter was , fortunately, "replaced by Boscov’s, but finding a retailer of that size to step in is rare, experts say.
The Stamford Town Center has had five retailers that have either left or will leave in coming months, leaving vacancies. Mall officials and retail experts did not appear as concerned as some economic forecasters would expect.
“It’s a lot easier to backfill the spaces in a Class A mall than in a Class B mall,” said Garrick Brown, vice president of Americas retail research for commercial real estate firm Cushman and Wakefield in and interview with Hearst Connecticut Media.
That has been evident in regional shopping malls, which have managed to sustain and reinvent themselves with new attractions like movie theaters, gyms and more.
Property owner challenges
The continuing loss of staples like Payless certainly pose a concern for the property owners, according to broker Bruce Wettenstein of Vidal/Wettenstein in Westport.
“There are not many new retail type businesses that are coming into the area,” he said, which means finding replacement tenants for vacant retail spaces may prove to be a tough task.
The challenge, Wettenstein said, will be on the owner’s shoulders as they have to get imaginative with marketing their spaces, including lowering rents to attract new businesses.
The size of the space could make a difference in finding new tenants, too.
Buildings that once accommodated standalone Toy’s R Us and Sears stores are large enough and more apt to be repositioned for new business models, Wettenstein said.
Smaller storefronts, like Payless, could be tougher to fill, depending on the market.
“As more retail is affected by the e-commerce business and the somewhat slowdown in the brick and mortar, there may be more stores in the future that will become vacant,” Wettenstein said. “The retail tenants are not as prevalent as a lot of the industrial companies and the office market, which is picking up a little. The retail sector is still suffering.”
Contributions by Paul Schott.