Mason Asset Management Archives

Sears to close Concord Mall store; last in Delaware

Jacob Owens February 5, 2020

WILMINGTON – Sears will close its last remaining department store in Delaware in the next two months, hastening the decline of the Concord Mall where it has served as an […]

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🔒 🔒 N.Y. firm acquired Concord Mall before foreclosure

Jacob Owens January 27, 2020

WILMINGTON – While reports about the Concord Mall’s change in ownership earlier this month painted a picture of “business as usual,” the reality is a bit bleaker, according to a […]

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Sears has confirmed that it will close its Concord Mall location, the brand's last department store in Delaware. | DBT PHOTO BY JACOB OWENS[/caption] WILMINGTON – Sears will close its last remaining department store in Delaware in the next two months, hastening the decline of the Concord Mall where it has served as an anchor store for nearly 30 years. Larry Costello, public relations director for Sears' parent company, TransformCo, confirmed the Concord Mall store's closure after a Delaware Business Times inquiry late Wednesday, Feb. 5. "After careful review, we have made the difficult but necessary decision to close the Sears store in Wilmington, Delaware. The liquidation sale will begin later this week and the store is planned to close in mid-April. We encourage customers to continue shopping on Sears.com for all their product needs," the company said in a statement to DBT, declining further comment on the closure. In the past, TransformCo, which owns and operates the Sears and Kmart brands after buying them a year ago in a $5.2 billion deal out of bankruptcy, has made public announcements about sweeping closures across the country, such as its November announcement of 96 store closures that included Delaware's last remaining Kmart in Rehoboth Beach. A spate of closings this month is occurring much more quietly, however, with reports this week of TransformCo also closing its Sears stores in Annapolis, White Marsh and Waldorf, Maryland; and Moorestown and Woodbridge, N.J.; as well as Kmarts in West Long Branch, N.J., and Outer Banks, N.C. On Thursday morning, the Concord Mall store was advertising liquidation sales of up to 40% on all of its merchandise, ranging from clothing to hardware to mattresses. Employees said that they were informed of the location's closing on Monday. The closing of the Concord Mall's Sears marks the end of the First State tenure of what was once one of the most profitable American department store brands. Ten years ago, Sears' parent company operated 3,500 Sears and Kmart stores with sales of $43 billion. Now, there are 180 or fewer scheduled to be in operation nationwide. [caption id="attachment_172717" align="alignleft" width="207"]

The Concord Mall Sears department store, the last of the brand in Delaware, is already holding liquidation sales. | DBT PHOTO BY JACOB OWENS[/caption] Sears had operated three full-scale department stores in Delaware: one in Prices Corner that opened in 1963, one at the Dover Mall that opened in 1982, and the Concord Mall location, which opened in 1992. Both the Dover and Prices Corner locations closed in 2018, with the latter set to become a Target location through redevelopment. The Sears name will now only live on in the state through some smaller spinoff stores, like Sears Hometown, which are independently owned and operated hardware and appliance retailers with Sears brand products, and Sears Outlets, which carry unboxed or slightly damaged merchandise at discount. The news of the Concord Mall store's closure comes on the heels of the recent change in mall ownership, which was first detailed in a DBT story last month. Namdar Realty Group, a quickly growing commercial real estate investment firm based in Long Island, N.Y., took ownership of the mall after purchasing the mall's mortgage in August 2019 and its previous owner, an entity affiliated with Delaware-based Allied Properties, was at risk of foreclosure. Instead of proceeding into that public process, Allied simply turned over the keys to the property. The prospect of losing their anchor tenant in Sears clearly weighed on Allied, as it filed notices in the 2018 New York bankruptcy case of Sears' former owner, Sears Holding Corp., seeking more info on the plans of the parent company to close stores. The mall was already showing signs of distress when two stores – longtime tenant AB Sports, a sports memorabilia store, and RetroFitness, a gym leasing 13,000 square feet in the rear of the mall – announced their closures last month. Those closures meant that more than 30% of total storefronts and 10.6% of total square feet at the mall are vacant, more than the already troubling national statistics. According to a January report from REIS Moody Analytics, U.S. mall vacancies are at their highest levels in 20 years of study at 9.7% of total square feet. If the Sears anchor store's 174,172 square feet is added into the vacancy rate, the Concord Mall will be more than 32% vacant in terms of square footage. Elliot Nassim, president of Mason Asset Management, the Concord Mall's new management company, told DBT in an emailed statement last month that "our decision to move forward with the purchase was a direct reflection of our evaluation of the property's potential." "We look forward to bolstering the tenancy in place with new opportunities, and it is our goal to continue to add value by further leasing and developing the site. As it relates to the specifics for those plans, we are still exploring all our options," he said. "It is our goal to bring in new and alternative tenants "“ repositioning the property and allowing the surrounding neighborhood to benefit. As a company, we always strive to create efficient retail hubs that generate revenue and reinvigorate the communities within which we operate." It's not clear whether Namdar and Mason were aware of the potential pending loss of one of the mall's three anchor stores when they sought to acquire it. Remaining are a Boscov's and Macy's, although the latter brand also announced plans this week to close about 100 more stores nationwide over the next three years. Macy's hasn't yet publicly said which locations would be affected, but Delaware's three stores "“ at the Concord Mall, Christiana Mall and Dover Mall "“ were not among 29 "low-tier" locations targeted in closures announced last month. By Jacob Owens jowens@delawarebusinesstimes.com

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