Landlords find ways to help independent tenants succeed
Landlords are always on the lookout for independent retailers who show both passion and commitment. But the next Gaps and J. Crews of the world need to be just as careful about the landlords they choose to work with, said experts at SCT Live’s “Independent Chains Need a Hand” event, in Atlanta last week.
If the landlord is laser-focused on rent and seems uninterested in the prospective tenant’s business model or target customer, it is a huge red flag, said Christopher M. Conlan, executive vice president and COO of Acadia Realty Trust. “You have to know if the landlord is too rent-driven,” he said. “It is incumbent upon tenants to do this investigation.”
And that’s because in today’s post-recession environment, the landlord might well need to go the extra mile to support the retailer in a variety of ways, said Lyle E.T. Darnall, managing director of the Southeast for Columbia, S.C.-based Edens. Darnall described how his firm works extensively with newcomer tenants to help them find signage vendors, say, or design and merchandise their storefronts. “You’ve got to make sure the space is right for them,” he said. “They lack build-out expertise.”
Why not simply stick with the low-risk credit and universal brand-recognition of national chains? These retailers are critical, of course, but locally owned shops can help the center forge deeper connections with shoppers, said Andrea Kenney, vice president of retail agency leasing at Jones Lang LaSalle. “Each property has its own personality, and independents understand that personality,” she said. “They’re a recognizable face in the community.”
The panel included entrepreneurs Cici Coffee, founder of Natural Body Spa (nine locations in Atlanta and 14 in the Southeast); Amanda Hair of Bob Steele Salon (three salons in metro Atlanta), and Kathryn Poe, owner of the Mary Mojo Boutique in Mt. Pleasant, S.C. They each described challenges and lessons learned as independent retailers. An English major in college with no formal business experience, Poe recalled starting out in 2006 with a boutique space that was both too large and too expensive. “I didn’t even know you could negotiate the lease,” she said, laughing.
Coffee emphasized the importance of looking beyond the demographic data on the page to truly understand the psychographics of prospective sites. Noting the stiff competition of the discounters, Hair described how her salon now focuses exclusively on products not sold by the likes of Walmart or Target. All the experts on the panel emphasized the importance of personalized service in today’s marketplace. “There’s no substitute for unique customer service,” Conlan said, “and independent retailers are the best at it.”
Source: ICSC September 27th, 2013