More from the World Retail Congress 2010
Rising internet sales is forcing large retailers around the world to re-configure their massive amounts of physical retail space on the high streets and in shopping malls in increasingly innovative ways. By Glynn Davis in Berlin
Delegates at the World Retail Congress 2010 in Germany heard from Christopher Lee, president of PDO Advisors and former executive director at US-based Forever 21, about the launch of a new concept SR3 within space in selected department stores of the Sears Roebuck chain following its recognition that it has too much square footage and needs to “right size its real estate”.
“It’s a solution to a hangover of retail space. They’ve got the best real estate in the US, they are everywhere, so let’s take a slice of this and right-size the estate with a new concept,” he explains.
The SR3 chain will be carved out of ‘excess’ space at 50 Sears’ department stores around the US and will seek to attract smaller brands to sell their goods within the new chain on a revenue-sharing basis. “Brands contract-out to us. They take some risk on the inventory and pay some rent to us,” he says.
Lee says this innovative development not only taps into the desire for younger consumers to have a store that has quickly changing cutting edge products and brands but is also a solution to Sears’ massive real estate portfolio with large outlets located in some of the US markets’ premier locations.
Such an initiative is evidence of the increasing need for alliances and collaboration in the retail marketplace – that will benefit new brands (that don’t want to be trapped in 10-year property contracts) and for large merchants that simply have too much space.
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