Special report: Delaware retailing’s new normal

0

By Eileen Dallabrida

Less than two years ago, Jennifer Marsh and her mother Sandy Dukes opened Stubborn Soul, a trendy apparel, accessories and gift boutique in Middletown’s burgeoning downtown.

In March, when non-essential retailers were ordered to close to help stem the Covid-19 pandemic, Marsh turned out the lights, locked the doors and nimbly pivoted to selling online.

When stores were permitted to reopen, Stubborn Soul did not return to its brick-and-mortar base.

“We are actually completely online now,” Marsh said.

blankIn an era of rapid change and abundant uncertainty, retailers are looking for ways to adapt. After months of depressed sales, some merchants are adapting. Others can’t hold on any longer.

Hundreds of familiar storefronts in the First State already have gone dark or are holding going-out-of-business sales. Among the casualties are the Microsoft store at Christiana Mall, the Children’s Place at Dover Mall, Modell’s Sporting Goods near Christiana, Pier One in Christiana, North Wilmington, and Rehoboth Beach, and GNC locations in Dover, Hockessin, Newark, North Wilmington, and Wilmington. Justice, a seller of apparel and accessories for the pre-teen set, has exited Concord Mall and Dover Mall, but will keep its Christiana Mall location open.

20 tenants leave Concord Mall

More than 20 tenants have left Concord Mall, a landmark on Route 202 since the 1960s. Lane Bryant and Sprint are among the recent departures. New York & Co. is currently holding its liquidation sale.

Delaware-based Allied Properties, the long-time owner, sold the fading mall in January to Namdar Realty Group, a Long Island-based firm that specializes in distressed properties. The enclosed mall has suffered a series of setbacks, starting with the exit of the Sears anchor store, followed by the pandemic.

On a recent afternoon, Boscov’s was bustling at Concord and there was a socially distanced line outside Chick-Fil-A. Corridors were clean and well-maintained as handfuls of shoppers wearing COVID-mandated masks strolled past windows reflecting Concord’s current mix of national chains, local independent merchants and empty storefronts.

“It’s air-conditioned and a nice place to walk,” one visitor said.

The popular Tanger Outlets in Rehoboth Beach also have been dinged by corporate bankruptcies, including the parent companies of Wilsons Leather, Bass shoes and Justice.

So far this year, there have been 44 retail bankruptcy filings, according to tracking byS&P Global Market Intelligence. Before year’s end, filings are expected to eclipse the 48 filings logged in 2010 during the Great Recession.

blankStein Mart selling to the walls

The latest is Stein Mart, which announced it would close “most if not all” of its discount department stores on Aug. 12. Clearance signs immediately went up at Stein Mart’s location at Concord Square on Route 202, where managers are selling down to the walls and taking offers on fixtures.To minimize vacancies, the largest, most powerful landlords are making deals to resuscitate valuable tenants.

Steinmart’s Concord Pike store.

Simon, owner of Dover Mall, and Brookfield Properties, owner of Christiana Mall, are part of a group exploring acquiring JCPenney, which is in bankruptcy and an anchor at many malls. The strategy has succeeded before, when Simon and General Growth Properties, Brookfield’s predecessor, turned a handsome profit after bringing youth-oriented apparel seller Aeropostale out of bankruptcy in 2016. Simon also is partnering with Authentic Brands to buy Brooks Brothers.

With more spaces remaining dark in malls, Simon is in talks with Amazon to lease empty square footage as fulfillment centers for the retail giant. Analysts predict the move won’t be popular with neighboring retailers because the centers won’t attract foot traffic, the lifeblood of the mall concept.

The mall owner also is in Delaware Chancery Court, suing Gap for $107 million in back rent. Gap stopped paying rent in April, suspending payments for the duration of COVID-mandated closures.

blankTanger Outlets’ rendering prior to a major makeover

Here are other trends to watch:

  • Bellbottom blues: The pandemic has unraveled denim sales as the sheltering-in-place set focuses on comfort. True Religion, Lucky Brand, G-Star RAW and the parent company of Joe’s Jeans and Hudson Jeans have all filed for bankruptcy since COVID-19 sent millions of workers to their home offices. Meanwhile, “athleisure” retailers like Lululemon are getting a leg up from leggings sales, while Gap, which owns Athleta, is reporting higher sales for joggers, leggings and men’s sweatpants.
  • Dress-down Friday, seven days a week: With fewer men putting on ties and jackets, sales of business apparel have plummeted. Brooks Brothers, which has been suiting up men for 200 years, and Tailored Brands, parent of Men’s Wearhouse and Jos A. Bank, have filed bankruptcy.
  • From curbside pickup to drive-through convenience: Target, Walmart and other retailers will continue curbside pickup, which allows customers to collect their purchases without entering the store. Wawa is taking it a step further, piloting drive-through convenience stores, in which customers pull up to a window and place an order with a retail worker, who then safely hands them their purchases.

Christiana Mall reopened on June 3, nearly three weeks before malls in neighboring Maryland, Pennsylvania and New Jersey. That provided the regional powerhouse with an initial burst of out-of-state patrons eager to shop, said Steve Chambliss, the mall’s general manager.

Fewer consumers are crossing state lines these days as the pandemic drags on. And the decision by several school districts to continue classes remotely is taking some of the air out of back-to-school shopping.

blank

Wait-and-see mode for Christiana Mall

“The traffic is down from last year but not much,” Chambliss said. “Right now we are in wait-and-see mode.”

Volunteers staffing Savvy Resale, a fashion boutique in Talleyville operated by the Delaware Breast Cancer Coalition, were elated when DBCC reversed its decision to remain closed after retail operations got Gov. John Carney’s green light to reopen.

“Donations are pouring in and our shoppers are coming back,” said one longtime volunteer.

In downtown Newark, merchants found a silver lining in the pandemic cloud when workers were able to finish a massive construction project on Main Street ahead of schedule. But new concerns emerged when the University of Delaware announced that the fall semester would be held remotely, meaning throngs of students and staff would not be on campus to patronize local shops and restaurants.

Newark Camera sees quieter Main Street

At Newark Camera Shop on East Main Street, Michael Romagnoli would typically be gearing up for the back-to-school crush, taking passport and student ID photos and supplying students with film and vintage cameras.

“The pandemic and the lack of students is having a significant impact on the business district,” he said.

Founded in 1935 as Newark Camera and Sporting Goods, the business has been in Romagnoli’s family since 1957. The shop has survived World War Two, the Great Recession and a digital revolution.

To cope with this latest challenge, Romagnoli is marketing niche services, such as the shop’s in-house service converting VHS tapes to digital.

“We have done more online and networking and reaching out to the community more, participating in online conversations, and making certain photographers and the community are aware of our services,” he said. “It’s also much easier to find a parking place.”

Eileen Smith Dallabrida is a writer and editor whose work has appeared in USA Today, National Geographic Traveler and the Christian Science Monitor. She is a national runner-up for the Investigative Reporters and Editors award.

Facebook Comments