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Anchors Away

How Small Retailers Can Stay Afloat Even If A Big Box Sinks
By Phillip M. Perry

When a large Marshalls anchor store closed at a mall in California’s San Fernando Valley last fall, the remaining retail tenants were faced with a dilemma: How could they survive until mall management found a replacement?

One option was to do nothing. Just hunker down and accept some dismally slow customer traffic until the problem was resolved.

The retailers figured that wasn’t a solution. Instead they banded together to design and promote a soccer weekend complete with celebrity players from college and professional teams, soccer clinics and related promotions.

“The event was a tremendous success,” says Donald J. Bredberg, managing director of Stone Creek Partners, a real estate consulting firm based in Westlake Village, Calif. “It drew crowds of families.”

If you operate a retail outlet in a shopping center or mall, that California story may sound familiar. The recession has resulted in a steep pullback of consumer shopping habits and a shuttering of many big retailers including Linens ‘n Things and Circuit City. Such chains have long operated so-called anchor stores—high profile operations prized for their ability to attract crowds of shoppers that neighboring small retailers depend upon.

The failure of an anchor store can cause a shock that’s as much emotional as financial for surviving retailers.

“If you are a small retailer, the closing of an anchor store is almost like the loss of a loved one,” says Bredberg. “You cannot deny the psychological impact on you and your fellow shop owners.”

But, you can take action to mitigate the potential financial loss and improve the well-being of the surviving small retailers. Here’s how.

Create Value
The California shop owners demonstrated that aggress...