Executive Briefings

Some Retailers Are Handing Over Part of Their Store to Others

Sears is carving out about 15 percent of the square footage its Costa Mesa, California store to house the much trendier retailer Forever 21. Target will have 1,450 Radio Shack-run mobile phone shops in its stores by the end of June. And Wal-Mart Realty says it has almost 400 in-store leases ready for some well-matched retailer.  Wal-Mart has a lot of competition, as Sears Holdings offers thousands more such sub-lease opportunities within its own Sears and Kmart stores.

Many large U.S. chains are making similar arrangements. All are drawn to the idea that partnering with specialized retailers and manufacturers can help them fill holes in their product offerings and help them profit from hot trends more quickly. A number of these retail chains are moving beyond just letting the other company build and sometimes staff a space within their stores; in search of a more stable revenue source during these trying times, they are becoming something of a mall -- leasing the square footage to their partners as well.

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Sears is carving out about 15 percent of the square footage its Costa Mesa, California store to house the much trendier retailer Forever 21. Target will have 1,450 Radio Shack-run mobile phone shops in its stores by the end of June. And Wal-Mart Realty says it has almost 400 in-store leases ready for some well-matched retailer.  Wal-Mart has a lot of competition, as Sears Holdings offers thousands more such sub-lease opportunities within its own Sears and Kmart stores.

Many large U.S. chains are making similar arrangements. All are drawn to the idea that partnering with specialized retailers and manufacturers can help them fill holes in their product offerings and help them profit from hot trends more quickly. A number of these retail chains are moving beyond just letting the other company build and sometimes staff a space within their stores; in search of a more stable revenue source during these trying times, they are becoming something of a mall -- leasing the square footage to their partners as well.

Read Full Article