When news came out that Sears was going to close about 100 Sears and Kmart stores across the country, commercial real estate agent Doug Brown didn’t need to see the list to know that Lawrence’s Sears store on South Iowa Street would be on it.
“Anybody who went into the Sears building could see that coming,” said Brown, a broker for McGrew Commercial Real Estate. “Most days you could shoot a cannon off in there.”
Indeed, Sears did announce its Lawrence store would close in the near future. While that didn’t create surprise, it does beg the question of whether it should create some worry.
The Sears closing marks at least the third strike against national chain retailers in Lawrence in the last year. First it was Borders in downtown Lawrence. The bookstore chain in February put Lawrence on its list of stores it would close as it tried to revamp its finances. It didn’t matter. Soon thereafter, all Borders stores collapsed like the plot of a “Twilight” novel. The building at Seventh and New Hampshire remains vacant.
In mid-December, Old Navy surprised the retail scene by confirming it would close its Lawrence store near 33rd and Iowa streets. Its last day of business will be Jan. 26.
Then Sears announced it would close its store at 2727 Iowa, the only store in Kansas that ended up on the chopping block. The closing will mark the end of at least a 45-year history of Sears having some presence in the city. It also will leave vacant an 85,000-square-foot building, one of the larger retail vacancies for Lawrence in recent years.
But the trio of announcements doesn’t seem to be sending up red flags about whether Lawrence remains an attractive place for national retailers.
“We’ve been through these types of cycles before,” said Hank Booth, acting president and CEO of the Lawrence Chamber of Commerce. “I’m hearing from many retailers, especially the ones that make a point to be active in the community, that they’re doing well right now.”
Signs of a decline
It wasn’t too long ago, though, that the health of retail in Lawrence was a major topic. In April 2010, the city appointed a task force to study retail issues and determine what — if anything — community leaders could do to help the retail scene.
In early 2010, there were signs of higher vacancy rates in downtown Lawrence, and City Hall leaders were pointing to a key statistic that showed Lawrence was losing more sales to other communities than it had in past years.
Today, the vacancy rate in downtown appears to have improved, but Lawrence still ranks in the lower third of major Kansas cities when it comes to attracting shoppers — at least according to one measurement.
The Kansas Department of Revenue calculates a “pull factor” for each major city in the state. The pull factor basically measures whether the amount of per-capita retail spending for a community is above or below the statewide average. Communities that have per-capita spending levels higher than the statewide average generally are thought to be doing a good job of either attracting outside shoppers or keeping local shoppers.
Lawrence’s most recent number found the city’s per-capita retail spending to be 2 percent higher than the statewide average. That ranked the city 19th out of 25 major cities in the state. But the number was an improvement from the 2009 reading, which showed Lawrence was slightly below the statewide average.
As recently as 2006, though, the city had per-capita spending that was 12 percent above the statewide average. If the city could return to that level, it would result in about in about another $7 million in local sales, or about another $180,000 in sales taxes collected by the city.
Mayor Aron Cromwell said that keeping Lawrence residents in town for their shopping needs is important.
“Overall, I think we have had a problem that there are several things that you just can’t buy here,” Cromwell said. “Or at least there’s not many options in some categories.”
Such concerns were a major topic of discussion of the city’s Retail Task Force. When the task force delivered its report to city commissioners in February, it included recommendations to help retailers tackle that problem.
A key recommendation was for the city to create a new database that would give local retailers access to important statistics about what type of product needs are going unmet in the market. Commissioners in February said they wanted to see a cost estimate for the database and would consider it as part of their 2012 budget.
But when the 2012 budget was approved this summer, the issue never came up. Neither did a recommendation that the city help organize a new group of stakeholders that would pool its money to do joint advertising designed to attract outside shoppers to Lawrence.
City Manager David Corliss said the items weren’t forgotten. Instead, he said, it became clear that the commission didn’t have a consensus on how active it should be in promoting retail issues.
“The commission needs to decide what role it will have in promoting retail jobs,” Corliss said. “I think it has decided to a degree. It has said that our role is to promote the primary jobs and the retail will follow.”
Cromwell said he largely agrees with that assessment.
“We have to be careful with retail,” Cromwell said. “If we encourage one type of retailer to come to town, it can hurt an existing retailer that is already here. That’s probably the biggest reason we haven’t acted real strong on the retail front.”
Space to show
Despite the recent announcements, there have been signs that the retail market is picking up. The city’s 2011 sales tax collections were up 4.3 percent, ending two years of declining tax revenues.
The city also had some new national or regional entrants come into the market. Natural Grocers opened on 23rd Street. Mattress Firm has signed lease space to open at 33rd and Iowa streets, and JoS. A. Bank quickly filled downtown space that had been occupied by Talbots.
“I think the local marketplace is starting to heal itself,” said Earl Reineman, vice president of Weaver’s Department Store.
Brown said he thinks the situation on South Iowa Street also will look better in 2012. Speculation in the retail industry is that Ross, a discount department store, is strongly interested in the Old Navy location, although the landlord for the spot has not yet confirmed that speculation. Brown also said he’ll be surprised if Old Navy stays out of the Lawrence market for long. Speculation is that Old Navy isn’t closing its Lawrence store because of low sales totals, but rather because of a leasing issue with its landlord.
As for the Sears spot, Brown said he views the 85,000-square-foot building as an opportunity for Lawrence. He said the space could be split into two or three smaller stores.
“It is easy to say shop local and buy local, but barring that, I don’t think there is anything the community needs to be doing,” Brown said. “I think they just need to be patient and not think that the sky is falling.
“I don’t think the sky is falling. It is kind of an exciting time for people like me. We have space to show. I can tell you that people are already working on making deals. I think you’ll see some activity in 2012.”