Lowe’s Launches an Aggressive Brick-and-Mortar Expansion
Home improvement retailer Lowe’s aims to open 10 to 15 stores per year over the next several years in fast-growing U.S. markets, executive vice president of stores Joe McFarland said at the Lowe’s 2024 Analyst & Investor Conference. The big-box retailer operated 1,747 stores with 195 million square feet of sales space as of Nov. 1, which marked the end of the third quarter of its 2024 fiscal year. McFarland noted that Lowe’s has opened only a handful of stores since 2018. That year, the company announced it would close 51 underperforming stores in the U.S. and Canada.
JCPenney Merges With the Operator of Brooks Brothers and Eddie Bauer
Department store chain JCPenney has merged with the operator of such fashion brands as Brooks Brothers and Eddie Bauer to form a retail conglomerate with $9 billion in annual revenue. The combined company, Catalyst Brands, announced the all-equity transaction on Wednesday.
The JV — which operates 1,800 stores, including more than 650 JCPenney locations in the U.S. Catalyst Brands — has participation from shareholders Simon, Brookfield Corp., Authentic and Shein. Aside from Brooks Brothers and Eddie Bauer, brands under the SPARC banner include Aeropostale, Lucky Brand and Nautica. Catalyst has sold the U.S. operations of footwear brand Reebok and is exploring strategic options for fast-fashion retailer Forever 21.
Marc Rosen, who was CEO of JCPenney, is now CEO of Catalyst. “Catalyst Brands brings together the rich heritage of six unique brands with modern energy and a new vision for success,” said Rosen. “The word ‘catalyst’ reflects our drive to accelerate innovation and energy and amplify the impact of this powerhouse portfolio.”
Michelle Wlazlo, former chief merchandising and supply chain officer at JCPenney, replaces Rosen as JCPenney’s CEO. Natalie Levy continues as CEO of Aeropostale, Lucky Brand and Nautica, while Ken Ohashi still leads Brooks Brothers and has assumed oversight of Eddie Bauer in his new role as CEO of both brands. Former Walmart executive Kevin Harper is joining Catalyst as COO.
Nordstrom Will Go Private With an Investment From a Mexican Retailer
More than 50 years after its IPO, the Nordstrom retail chain is going private again. Word spread in September that CEO Erik Nordstrom and executive vice president Pete Nordstrom wanted to take that step. The Nordstrom family and Mexican department store operator and real estate owner El Puerto de Liverpool are taking Nordstrom private in a $24.25-per-share, all-cash deal valued at $6.25 billion. After it closes in the first half of 2025, the Nordstrom family will hold a 51% stake in the retailer, and El Puerto de Liverpool will hold a 49% stake.
“Nordstrom is one of the worldwide leaders in department store retailing, and we’re thrilled to be investing in a company that has meaningfully shaped the industry for nearly 125 years,” Liverpool executive chair Graciano F. Guichard G. said. Nordstrom, which became a publicly traded company in 1971, operates more than 350 Nordstrom, Nordstrom Local and Nordstrom Rack stores. The company opened 14 Nordstrom Rack stores in 2024, and four more are set to open in spring 2025. Nordstrom posted net sales of more than $14.2 billion in fiscal year 2024, down from nearly $15.1 billion the previous year.
2 Other Department Stores Announced Store Closures Yesterday
Kohl’s will close 27 underperforming stores by April, leaving 1,123. Ten of the closures will be in California; two each in Illinois, Ohio and Virginia; and one each in Alabama, Arkansas, Colorado, Georgia, Idaho, Massachusetts, New Jersey, Oregon, Pennsylvania, Texas and Utah. The retailer also will close its e-commerce fulfillment center in San Bernardino, California, when that lease expires in May after 14 years. Kohl’s said efficiencies at its newer e-commerce fulfillment centers — 14 will remain — and fulfillment-from-store capabilities combine to enable that closure.
And Macy’s Inc. will close 66 more stores, it announced yesterday, part of a previously announced plan to close about 150 “unproductive” stories over three years through fiscal year 2026 while investing in 350 “go-forward” stores. Macy’s Inc. said the pilot investments in the first 50 go-forward stores have boosted sales for three consecutive quarters. The retailer also said digital channels will contribute to an enhanced customer experience at its store fleet.
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Albertsons Still Will Chase Costco and Walmart Market Share
An Albertsons Market Street store in Meridian, Idaho. Photo courtesy of Albertsons Companies
After calling off its $24.6 billion marriage with grocery chain Kroger in what would have been the largest supermarket merger ever, Albertsons Cos. still will chase fast-growing retail giants Walmart and Costco’s market share. During Albertsons’ third-quarter 2024 earnings call on Wednesday, CEO Vivek Sankaran emphasized his company’s need to accelerate growth “to compete with the very, very best in the industry.”
Without identifying them by name, Sankaran had made a not-so-subtle reference to Walmart and Costco. “We have a mass retailer and a club retailer that are growing much faster than us, and no matter what anybody thinks, they are real competitors to us, OK?” the CEO said during the earnings call, Albertsons’ first such call since the merger was announced in October 2022. “And we know that to win in the marketplace, we’ve got to compete with them. And until we compete with them, we can feel comfortable about market share in certain segments of our retail but we've got to get to better performance to gain market share overall.”
As part of its growth strategy, Albertsons is eyeing both store openings and store closures, according to Sankaran. As of Nov. 30, Albertsons operated 2,273 grocery stores and drugstores under brand names like Albertsons, Safeway, Vons, Randalls and United Supermarkets. During the 12 months that ended Nov. 30, the company rang up sales of $79.9 billion.
A Big Lots Deal Will Keep as Many as 400 Stores Open
Discount retailer Big Lots has received a financial lifeline that’ll enable as many as 400 stores to remain open. On Jan. 2, it closed a sale agreement with Gordon Brothers Retail Partners, which said it would transfer the newly acquired Big Lots assets to Variety Wholesalers.
Variety Wholesalers — which owns more than 400 stores under the Roses, Roses Express, Maxway, Bill’s Dollar Stores, Super 10, Super Dollar and Bargain Town brands — plans to operate the acquired stores under the Big Lots banner. Big Lots president and CEO Bruce Thorn described the deal with Gordon Brothers and Variety Wholesalers as “a favorable and significant achievement” for the troubled retailer.
At the end of 2023, Big Lots operated 1,392 stores. It filed for Chapter 11 bankruptcy in September 2024, and going-out-of-business sales at its 869 remaining stores began in late December when it said that it expected an acquisition by Nexus Capital wouldn’t close as planned.
The Party’s Over: Party City Will Close All Its Stores
Party City, founded in 1986, is shutting down its nearly 700 stores after filing again for Chapter 11 bankruptcy, and A&G Real Estate Partners will manage the auction of all the store leases, which range from 7,000 to 46,000 square feet. The retailer said on Dec. 21 that it would wind down operations and file for bankruptcy.
After wiping out nearly $1 billion in debt, Party City emerged from Chapter 11 in October 2023, but it never bounced back from financial trouble. It wrote to vendors: “The environment has continued to be extremely challenging for us and many other retailers, particularly given inflationary pressures on costs and consumer spending, and while we worked hard to navigate these headwinds, our very best efforts were ultimately not enough to overcome these challenges.”
CenterSquare Forms a Necessity Retail JV
CenterSquare Investment Management and an unidentified state pension fund launched a joint venture seeking to buy 30 to 40 necessity-based retail centers by late 2026. CenterSquare’s current portfolio of necessity-based centers contains more than 50 properties in the U.S. The JV will target neighborhood centers in high-growth areas with tenants in sectors like food-and-beverage, fitness, beauty, health and medicine, and business services.
Herb Glimcher and Joe Cosenza Have Died
Commercial real estate veteran Herb Glimcher, an ICSC member for more than 40 years, died on Jan. 4. He would have celebrated his 98th birthday on Feb. 9. “Herb was very accomplished, having established Glimcher Realty Trust, and was also a well-known philanthropist, giving back to his community in countless ways,” said ICSC president and CEO Tom McGee. Glimcher founded The Glimcher Co. in 1959, and Glimcher Realty Trust launched with him at the helm in 1993. Washington Prime Group acquired the Glimcher retail REIT in 2015. A funeral service was held Jan. 7 in Columbus, Ohio.
And The Inland Real Estate Group of Cos. co-founder, vice chair and board member Joe Cosenza died on Dec. 25 at age 81. In his role as president of Inland Real Estate Acquisitions, Cosenza worked on more than $55 billion worth of commercial real estate purchases. “Joe is a commercial real estate icon and a legendary dealmaker who, along with the other Inland founders, transformed the alternative real estate marketplace,” said Inland president and CEO Tony Chereso. A funeral service was held Jan. 3 in Downers Grove, Illinois.
Joe Cosenza Photo courtesy of Inland
C-Suite Updates at NNN REIT and Pine Tree
NNN REIT, which specializes in net lease retail properties, hired Vincent Chao as CFO. Chao, a longtime REIT professional, joined NNN on Jan. 9 as executive vice president and will add the titles of CFO, treasurer and assistant secretary on April 1. He’ll succeed Kevin Habicht, who’s retiring from those roles effective March 31 after 32 years at the company. Habicht has been NNN’s CFO since 1993. Chao most recently was managing director of finance at RPT Realty, which Kimco Realty acquired a year ago. Before RPT, Chao led U.S. REIT research at Deutsche Bank Securities. As of Sept. 30, NNN REIT owned more than 3,500 properties with a gross leasable area of about 36.6 million square feet.
And Pine Tree has promoted Sara Kowalczyk to chief accounting officer. Kowalczyk had been Pine Tree’s executive vice president of accounting and financial reporting, according to her LinkedIn profile. Pine Tree has 17 million square feet under management, comprising $2.5 billion of necessity-based, open-air centers.
Sara Kowalczyk
By John Egan
Contributor, Commerce + Communities Today