Newspaper article THE JOURNAL RECORD

Realtors Believe U.S. Market Remains Overbuilt

Newspaper article THE JOURNAL RECORD

Realtors Believe U.S. Market Remains Overbuilt

Article excerpt

NEW YORK _ America has too many stores.

Despite major consolidations and liquidations in recent years, the U.S. retail industry remains grossly overbuilt and the situation will claim the lives of scores more stores and manufacturers during the coming decade.

That was the gloomy scenario sketched by several leading executives at Sunday's kickoff of the 84th annual convention of the National Retail Federation.

"I thought the industry was overstored in 1976, but this is ridiculous," said Bud Konheim, the plain-talking chief executive of Nicole Miller Ltd., the New York apparel maker and retailer. "There's a sea of merchandise out there. Even despite the consolidations, the actual amount of space has increased."

It is estimated that there is about 18 square feet of selling space for every man, woman and child in the United States today _ double the amount 20 years ago.

Last month, Merry-Go-Round Enterprises, the hip Maryland clothing chain operating in Chapter 11 bankruptcy, announced it will close 200 stores by the end of February, on top of 200 branches shuttered last year.

What will be left? Try 1,030 stores.

Take the Gap, Konheim says. "The only place they don't have a store is in my living room. There's a Gap on almost every street corner. And is it affecting them? Sure it is."

Indeed, San Francisco-based Gap, which operates 1,300 stores, recently reported flat December sales at stores open at least a year _ the key performance measure.

The market saturation stems from ambitious growth strategies hatched in the 1980s. Working in tandem, retailers and real-estate developers went on an unprecedented expansion binge.

In 1980, the country had 22,000 shopping centers. Ten years later there were nearly 37,000. Specialty retailers such as Gap, Limited, Williams-Sonoma, Nature Company and many others blitzed the market with new stores. …

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