QuoteAffluent residents draw retailers to stable, well-situated Northeast Florida, even near older properties, and long-term prospects prompt them to locate in places whose base of shoppers is likely to grow with the population.
By LIZ FLAISIG, The Times-Union
Since mid-April, news from the retail industry hasn't been encouraging.
Store closings, scaled-back expansion plans and even bankruptcy protection are becoming more common as national retailers grapple with less credit to buy merchandise and lackluster consumer spending.
The International Council of Shopping Centers estimated up to 6,000 stores nationwide could be shuttered by the end of this year, though retailers won't comment on which locations.
This news must sound contradictory to Jacksonville shoppers.
Unlike other parts of the country, they have heard this year will bring a market entry by Saks Fifth Avenue Off 5th at the Prime Outlets St. Augustine, an expansion of Ann Taylor and a new Ann Taylor Loft at The Avenues and the ongoing hint via television commercials that Macy's will finally arrive.
While retail analysts aren't using the adjective "strong" as often these days, some familiar with or working in Northeast Florida's retail market have described it as stable, well-situated and even hot.
"It's less likely to get store closings because it's in a hot area," said Howard Davidowitz, chairman of Davidowitz & Associates Inc. in New York City.
That's because stores in Jacksonville are probably better performing than in the Midwest and have concentrations of affluent residents, Davidowitz said.
Those affluent residents in areas such as Ponte Vedra Beach have pushed Jacksonville into the luxury realm of Louis Vuitton and allowed other retailers to locate in populated spots such as the intersections on Beach and Atlantic boulevards, not far from the Intracoastal Waterway bridges.
Even operating near older properties, such as Regency Square mall, has become desirable for national retailers.
The lure of the Jacksonville area begins with retailers taking a long-term perspective on locations, said Bart Weitz, executive director of the Center for Retailing Education and Research at the University of Florida.
In addition to the Midwest, Weitz said, the Rust Belt (the Great Lakes and Ohio River region) is more likely to lose stores than cities with warmer weather and growing populations.
"In the Sun Belt they say, we'll weather the storm," Weitz said. "But when the economy recovers they want to have stores in places that will grow. ... That's why Jacksonville and Florida are less likely to see the impact of store closings."
And it doesn't hurt that Northeast Florida has a reputation for being value-conscious.
Retailers JC Penney, Kohl's and Target have become firmly rooted here, as have Ross Dress for Less and Wal-Mart.
Retailers offering consumers a good buy on apparel - the industry's hardest hit category - are attracted to an area with savvy shoppers.
They're also attracted to areas whose base of shoppers will grow.
In CB Richard Ellis' Jacksonville market report for the first quarter, the Mitsui O.S.K. Lines and Hanjin Shipping projects are noted for creating up to 9,000 jobs.
These employees and their families offer assurance of a future growth spurt, even though the report calls the retail outlook for the rest of this year "unclear."
That lack of clarity isn't easily answered.
Simon Properties spokesman Les Morris said retailers would have to answer whether they might close any stores in Jacksonville. Simon Property Group owns Orange Park Mall, has 25 percent interest in The Avenues and 50 percent interest in St. Johns Town Center.
As landlords with retail spaces of more than 3 million square feet in Jacksonville alone, Morris said it's "a matter of business" to talk with tenants nearly every day.
Even so, he declined to comment on potential closings in Jacksonville by ailing retailers.
Instead, Morris pointed to recent openings at the properties, including Hollister and Perfumania at Orange Park Mall and Sketchers at The Avenues.
"I think these expansions and openings are, at least to me, an indication of the health of the market in Jacksonville."
http://www.jacksonville.com/tu-online/stories/051208/bus_277494278.shtml
http://www.sun-sentinel.com/business/sfl-0512saks,0,2998415.story
The recent announcement of Deutsche Bank expanding operations and adding another potential 1,000 residents to the area should also help a good bit.
The retail sector seems to be doing pretty good from where I sit. Also, the military is expanding its presence with renovations and expansions at Mayport and NAS Jax as well as relocations of NAVY departments to Jax.
The port expansion should also help weather the storm.