IT’S CHANGING

RETAIL ISN’T

DEAD,

Retail apocalypse. ❚ Those are the words often used to de-

scribe the closing of countless stores across the country

over the past decade, especially by big chains. ❚ But what

does the trend with bricks-and-mortar stores really

mean? And how does that translate in Southwest Florida?

❚ The region has lost its share of stores and retailers, just as the nation has

waved some good-bye forever. Some of the retailers that have disap-

peared in the past decade — locally and nationally? Toys R Us, Sports

Authority and Payless Shoesource.

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Transformation brings trauma forsome and big opportunities for others

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Vacation rental companies againare seeking to block Florida cities andcounties from imposing local regula-tions on them, a move opposed bymany property owners in parts of thestate where short-term home rentalsin single-family neighborhoods canbe a noisy, disruptive nuisance.

The battle over short-term vaca-tion rentals has become an annualtug of war in Tallahassee.

Top lawmakers are sympathetic toarguments advanced by the industrythat such rentals are a vital engine forFlorida’s tourism-driven economy,and also should be protected becauseof property rights concerns.

But efforts to limit local rental reg-ulations have faced fierce opposition,particularly from beach towns thathave seen a proliferation of largerental homes in recent years. Resi-dents complain that living next to therental homes is equivalent to living

Battle overshort-termrentals beginsanew in Fla.Zac AndersonUSA TODAY NETWORK-Florida Capital Bureau

See HOME RENTALS, Page 15A

4A ❚ SUNDAY, JANUARY 19, 2020 ❚ NAPLES DAILY NEWS +

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Remember Orchard Supply Hard-ware? It’s gone too, not just in South-west Florida, but everywhere. Howabout Dress Barn? Stores closed perma-nently last year, including one in Esteroat Miromar Outlets in August.

Other large chains have gone belly upor drastically reduced their footprint,closing thousands of stores here andacross the country.

Sears shuttered its Naples store atthe Coastland Center mall in November2018, and its store at Edison Mall in FortMyers will soon go dark. Why? The mer-chant said it’s faced “a difficult retail en-vironment and other challenges.”

Closer to home, Fort Myers-basedChico’s FAS, a national women’s retail-er, announced a “retail fleet optimiza-tion plan” a little over a year ago that willshutter 250 of its stores across the coun-try by 2022.

Pier 1 Imports and Macy’s are some ofthe latest retailers to announce plans forclosures. It appears their locations inSouthwest Florida will be spared — fornow — seen as a good sign for this mar-ket.

Some retailers are shutting stores inSouthwest Florida to change locations,such as Chico’s FAS, which will relocateits Chico’s, White House Black Marketand Soma boutiques from Bell TowerShops to Daniels Parkway in Fort Myers,at the end of the month.

“We look forward to joining the othergreat retailers in the plaza and welcom-ing our customers to our new location,while delivering the most amazing per-sonal service that we’re known for,” saidPashen Black, the company’s director ofcorporate public relations and socialmarketing, via email.

In 2019, American retailers an-nounced more than 9,300 store clos-ings, up nearly 60% from 2018, accord-ing to Coresight Research. That’s the

highest number since the global re-search firm began tracking the data in2012.

So is physical retail dying? Local andnational experts say that’s not the case— especially not in growing, affluentmarkets, such as Southwest Florida,where there’s plenty of purchasing pow-er — driven by residents and touristsalike.

Based on U.S. Census data, CollierCounty — or the Naples-Marco Islandarea — has consistently ranked as one ofthe top areas in the country for personalincome, which includes income from all

sources, from wages to investments togovernment benefits. Per capita — or av-erage income — in the county stood at$87,829 in 2017, according to a statewidereport.

The retail industry remains one ofthe top drivers of the local economy, asone of the leading employment sectors.

“There is a misconception that retailis dying. And that’s not true. Retail ischanging,” said Stan Stouder, a found-ing partner of CRE Consultants inSouthwest Florida.

Case in point? Go to any Costco,Stouder said, and “they’re all mobbed,”

especially on the weekend.“You can hardly get a parking space,”

he said.In fact, the Costco in Naples is ex-

panding, with plans to add at least 9,632square feet, according to county rec-ords.

Not ‘cataclysmic’

When Stouder sees big box stores go-ing dark, he doesn’t view it as “cataclys-mic,” he said.

ShoppingContinued from Page 1A

Continued on next page

A crew works Aug. 27 on demolishing a building that Sears had occupied at the Coastland Center mall in Naples. ALEX DRIEHAUS/NAPLES DAILY NEWS

Retail renewal

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“When I see a box go empty, I don’tcorrelate it to dynamics within a specificmarket, like Southwest Florida,” he said.“It’s a national chain. It’s a nationallybased decision based on how we as con-sumers are changing our habits.”

Retail isn’t just about selling prod-ucts anymore. There’s been a shift to-ward what’s been dubbed “retailtain-ment,” as customers demand bettershopping experiences, from wine tast-ings to educational talks.

Stouder points to Dave & Busters — arestaurant and video arcade — as an ex-ample of the trend. Since replacing theformer Saks Fifth Avenue store at theBell Tower Shops, the family-friendlychain has offered a new experiencethat’s made the open-air shopping cen-ter more popular, bringing in new cus-tomers and generating more repeat traf-fic, he said.

Dave & Busters is just one example ofmajor chains that are expanding nation-ally — locating in prime locations leftbehind by other retailers, such as SaksFifth Avenue and Sears.

While more people shop online thesedays, it doesn’t mean they don’t want togo to shopping centers anymore, Stoud-er said.

“People starve for community,” hesaid. “A shopping experience is not justa shopping mission. It’s a way to be im-mersed in society.”

While a dizzying number of storeshave closed in Southwest Florida, manyothers have opened in their place.

Some more recent examples?❚ In July 2018, El Dorado Furniture

opened in place of the Sports Authorityin Naples, at the northeast corner of Air-port-Pulling and Pine Ridge roads. An ElDorado outlet also opened in a formerSports Authority location in Fort Myers.

❚ About a year ago, Ollie’s BargainOutlet replaced the former Sports Au-thority in Fort Myers on Ben C. PrattParkway in Colonial Square.

❚ In September, a JoAnn Fabric &Craft store took the spot of the old WorldMarket at Coconut Point in Estero.

❚ About a month later, a Ross Dressfor Less store opened in the Tarpon BayPlaza between Panera Bread and WorldMarket in North Naples, replacing Sta-ples.

At Granada Shoppes, sitting at thecorner of U.S. 41 and Immokalee Road inNorth Naples, two empty spots willsoon fill up, with the addition of JerseyMikes Subs and Sports Clips.

The former home of Orchard Supplyis still under lease and it’s being market-ed for sublease, said Rod Castan, presi-dent of leasing and management ser-vices at Courtelis Co., the shopping cen-ter’s developer.

“The center continues to performwell,” he said in an email.

In some cases, stores are getting de-molished to make way for new uses.That’s what happened with Sears atCoastland Center, where a new upscaletheater is rising called CMX Cinebistro.

Some of the empty retail space in theregion has been converted to medicaland professional offices, as well ashousing.

While there are still some largespaces sitting empty in Southwest Flori-da, most have been backfilled, evi-denced by the low vacancy rate for retailin the region.

“I find that there are new names onold buildings,” Stouder said.

Vacancy rates low

In Southwest Florida, retail vacancyrates have been in the single digits since

the Great Recession ended, despite theexit of major retailers and the additionof new neighborhood shopping centerstoo numerous to count.

The rental rate stood at 5.1% at theend of last year for Lee, Collier andCharlotte counties — up a half a percentfrom 2018, but still signaling a healthymarket, Stouder said.

Retail rents declined 2.5% in 2019, hesaid, but that shouldn’t trigger any con-cern.

“If it went down 10%, that would because for some digging,” Stouder said.

Rental rates are a key factor for retail-ers, as it’s typically one of the highestcosts of doing business, said NelsonTaylor, a veteran appraiser and marketresearch director with LSI Cos. in FortMyers.

With the exit of long-time retailers,he said, the market is seeing tenantstake their place that don’t have as muchof a history in Southwest Florida — andthey’re paying higher rents becausethey come with more risk, which couldweaken their staying power.

“They may not be able to stay as longas a typical tenant, which is about afive-year lease term,” Taylor said.“They’re meeting today’s consumer-ships, but will it be the same three orfours years from now?”

In this day and age, retailers need tobe more nimble to stay alive, so long-term leases are no longer as attractive,or common, said Justin Thibaut, LSI’spresident.

Southwest Florida remains an attrac-tive market for retail shops, he said, be-cause it continues to add “rooftops,” ormore homes, at a rapid rate and to lurein new residents thanks in big part toFlorida’s business- and tax-friendly en-vironment. For those reasons, some big-box retailers are keeping stores openhere, while pulling the plug on themelsewhere.

“We are different in that we continue

See SHOPPING, Page 6A

Continued from previous page

El Dorado Furniture replaced Sports Authority at Airport-Pulling and Pine Ridgeroads in North Naples. The store has a purple glow at night, as seen in this phototaken Jan. 15. LAURA LAYDEN/NAPLES DAILY NEWS

Retail renewal

6A ❚ SUNDAY, JANUARY 19, 2020 ❚ NAPLES DAILY NEWS +

Retail renewal

to have an influx of new buyers enteringour market at an exponential rate,” Thi-baut said. “Without that we wouldprobably be looking at a different sto-ry.”

The in-store experience remainscrucial and some retailers have madebig strides in that direction. A good ex-ample of an experience-driven shift,Thibaut said, is the revamp of Com-cast’s Xfinity stores, which offer amuch more inviting and interactiveway to discover and optimize its TV,phone and internet services, allowingcustomers to touch and feel the prod-ucts before making a choices.

Scott Shalley, president of the Flori-da Retail Federation, couldn’t agreemore. In an emailed statement, he saidthe state’s retail industry is thriving be-cause retailers are “adapting to meetthe needs and demands of consumers.”

“What we’re seeing among success-ful retailers in Florida is that they’reblurring the lines of their businesses,”he said. “No longer are retailers divid-ing food and drink and shopping intoseparate silos. They don’t consider in-store and online shopping to be differ-ent platforms.”

The retailers that are succeeding are“breaking down the barriers betweenproducts and services to make shop-ping a more engaging experience forthe consumer,” Shalley said.

One of the ways retailers are blurringthe lines of their business? More are of-fering the ability for customers to buyitems online and pick them up in thestore, often within an hour. Curbsideservice is also growing, taking conve-nience to a whole new level.

In grocery stores, customers can sipa cocktail while they shop, offeringthem a more relaxing experience.

Strong momentum

While there are winners and loses inthe market, there’s still strong momen-tum in the retail industry overall.

Retailers saw a healthy holiday sea-son with sales growing 4.1% nationallyto more than $730 billion in 2019, com-pared with 2018, according to the Na-tional Retail Federation. Those num-bers include online and other salesmade outside of stores, which in-creased 14.6% over the year — growingto nearly $168 billion.

“These numbers validate continuedoptimism for increased investment andopportunity in the retail industry,” saidMatthew Shay, the national federa-tion’s president and CEO, in a news re-lease Thursday.

“This is a consumer-driven econo-my, and by any measure, the consumerhas put the economy in a solid positionfor continued growth,” he said.

Other winners in retail? Discountmerchants, including more affordablegrocery stores. Consumers remainhungry for bargains — and for good,healthy food.

Speaking of food, Southwest Floridahas seen a grocery store boom, withniche players such as Sprouts, Aldi andLucky’s Market entering the marketand expanding at a rapid clip across theregion. Some stores are opening in newlocations, while others are snatchingup vacant spots left behind by other re-tailers.

Discount grocer Aldi recently closedon the purchase of 2.33 acres at thenortheast corner of Six Mile CrossingBoulevard and Six Mile Cypress High-way in Fort Myers, claiming the two re-maining outparcels at the Springs atSix Mile Cypress. Many of the commer-cial development’s concepts are — orwill be — new to the Southwest Florida,including Tiger Woods’ forthcoming“PopStroke” entertainment complex.

This year construction crews are ex-pected to break ground on Topgolf, an-other golf-centered entertainmentvenue, on land off Colonial Boulevardnear Interstate 75 in Fort Myers.

The changing landscape of retailshopping has transformed the look ofPine Island Road in Cape Coral, nearPondella Road.

The North Point shopping center lostan A.C. Moore and a Circuit City, but ithas since picked up a Bed, Bath & Be-yond, a Five Below and an Aldi. Nearby,at the Coral Walk shopping center, Bur-

lington moved into the former SportsAuthority spot in 2018.

Southwest Florida has seen a surgein the construction of a different kind ofretailer — gas stations. Wawa, knownmore for its high-quality, inexpensivefood and freshly brewed coffee than itsgas, made company history in Octoberwhen it opened Collier County’s secondstore — its 200th in Florida.

Following a national trend, South-west Florida has seen the opening ofmore discount stores such as Five Be-low, Dollar Tree and Dollar General overthe past few years. These stores havecontinued to thrive, despite the grow-ing might of e-commerce.

Last year, e-commerce behemothAmazon surpassed Walmart as theworld’s largest retailer, topping Wal-mart on Forbes’ Global 2000 list of thebiggest public companies.

Still, most sales in the U.S. happen inactual stores. In fact, Amazon con-tinues to expand upon its own bricks-and-mortar presence after taking aleap in that direction with the acquisi-tion of Whole Foods, one of the nation’sleading natural and organic foods su-permarkets, in 2017.

Location, location, location

Locating in the right spot — and inthe right kind of shopping center withdiverse offerings from dining and en-tertainment venues to lifestyle and fit-ness operations — is key to the successof more traditional retailers, said Bran-don Isner, a leader of market researchand insights for CBRE in Florida.

“Retailer developers have done areally great job at making these greatretail centers, especially here in Flori-da,” he said. “Shopping can be an activ-ity where you go out early and end uphaving lunch.”

The shopping centers that perform

best offer everything their customersare looking to do in one place and aunique experience that helps build asense of place, which could include ev-erything from trampoline parks to yogastudios, Isner said.

“Authenticity is a word that is get-ting used a lot lately,” he said. “Peoplewant authentic experiences.”

Top-performing retailers have foundways to deliver what customers wanton all platforms, from their bricks-and-mortar stores to their websites, Isnersaid.

“Stores have taken on a whole newrole,” he said. “They aren’t just places tobuy things anymore. Now it’s a show-room. You can go in there and you cantouch and feel what you want to buy.You can go online if they don’t haveyour size and buy it.”

Closures have hit outlet malls too.Like more traditional shopping mallsand shopping centers they continue tolure in replacement tenants in South-west Florida.

While Miromar Outlets has lost ahandful of stores in recent years, theshopping center not only continues tobring in new ones, but the departure oflarger retailers has given other tenantsroom to expand, said vice presidentJeff Staner.

“We find the retail market continuesto be strong in this area, due to the factthat Southwest Florida is a vacationdestination and shopping always ranksamong the top three things people dohere,” he said.

Traffic at Miromar Outlets has risenconsistently over the past two decades.The center saw roughly 8 million shop-pers last year, including year-roundand part-time residents from the area,as well as visitors from out of town, in-cluding international ones, Staner said.

Nearly a half a dozen retailers ex-panded at the outlet mall last year. That

includes Levi’s, Michael Kors, Sketch-ers and Under Armour.

Bath & Body Works is in the midst ofadding to its space, Staner said.

Stores that have recently opened atthe mall — or are about to — includeTravelpro, Sperry, Aerie and Salt Life.

New restaurants have come to theshopping center too, while others haveexpanded, filling empty spots.

There continues to be strong con-sumer demand for good, quality prod-ucts at a more reasonable price.

“Customers want something that isgoing to last, but they don’t want tohave to pay a lot for it,” Staner said.

The future

What will the future hold for retail inSouthwest Florida and elsewhere?

Gary Tasman, CEO of Cushman &Wakefield Commercial Property South-west Florida, has some ideas.

As for the grocery store wars, he seesthem continuing to heat up with addi-tional products and services offered totry to get ahead of the competition,such as free delivery. Tasman pointedto Amazon’s recent decision to expandits free two-hour delivery service forgroceries to all of its Prime members.

“It’s new and it’s going to change thelandscape a lot,” he said.

He expects to see more stores closeand get repurposed and for more cus-tomers to start reaching their shoppingdestinations by using ride-hailing ser-vices, such as Uber and Lyft, leadinghim to wonder what will become of thehuge parking lots that he suspects willno longer be needed in Southwest Flori-da.

“I think what you are going to see ismore product being delivered to themarket via different and more creativeways, like pop-ups,” Tasman said. “Iwould envision that wherever peopleaggregate, there will be pop-ups whenthey are there, and they will be gonewhen they are not there. That’s a bigtrend in retail.”

He sees the demand for retail spaceslowing in the not-too-distant future.

“The idea that you need ‘x’ numberof square feet per hundred people, thatnumber is going to go down,” Tasmansaid. “We just don’t need as manysquare feet of retail.”

Tasman anticipates big shifts in howretail stores draw their customers in,including offering more fun and educa-tional events and entertainment. Hesees the day when he’ll walk by a storeand glimpse a hologram of himselfshowing how he’ll look in a trendysports jacket displayed in the frontwindow.

Retailers using artificial intelligenceand other smart technology are theones that will be more likely to win theretail race, he said.

“Bricks-and-mortar will not die,”Tasman said. “There is always going tobe a place in the economy for it.”

ShoppingContinued from Page 5A

The Edison Mall in Fort Myers recently was sold for $33.4 million. AMANDA INSCORE/THE NEWS-PRESS/USA TODAY NETWORK - FLORIDA

An outside view of the new Five Below store at Carillon Place off Airport-PullingRoad in East Naples. LAURA LAYDEN/NAPLES DAILY NEWS