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Anchors away: As shopping styles shift, West Acres to replace Sears with multiple tenants

FARGO - For as long as Marge Geatz has lived here there's been a Sears at the West Acres Shopping Center. So news that the store would depart the local market came as a sad surprise to her.

West Acres mall has experienced strong holiday sales. Michael Vosburg / Forum Photo Editor
West Acres mall has experienced strong holiday sales. Michael Vosburg / Forum Photo Editor

FARGO – For as long as Marge Geatz has lived here there’s been a Sears at the West Acres Shopping Center. So news that the store would depart the local market came as a sad surprise to her.

“I think everyone will miss Sears,” Geatz said as she walked out of the store into the mall concourse Thursday, Jan. 5. “Sears have been around for so many years and it's hard to believe a city the size of Fargo would not have a Sears.”

Sears opened with West Acres nearly 45 years ago as one of two anchors. Now it will close because mall management decided not to renew its lease, the mall announced Thursday. The struggling national chain announced the night before that it would close 42 Sears stores and 108 Kmart stores by April to reduce losses.

“Part of the reason West Acres management decided to part ways with its longtime anchor was because anchors are no longer the draw they used to be,” West Acres Senior Vice President Chris Heaton said. In fact, the mall is not looking to replace Sears with another anchor but two to three smaller stores.

“The face of retail and the face of anchor stores themselves are kind of evolving,” he said. “Stores are getting smaller, they're getting more agile. There's a lot of things happening right now. The idea of an anchor store per se as it was perceived 40 years ago is a lot different than it is now.”


Heaton declined to name the stores West Acres is negotiating with but he said they would be “ smaller but still fairly decent-sized tenants.”

Once they were kings

When developers began building malls in the late 1950s, Sears and other big department stores were at the height of their popularity. They were called anchors because they were the main reason shoppers went to malls, helping the smaller specialty stores. As a result, anchors often paid less rent than other stores.

That relationship is being turned on its head today.

Specialty stores such as fashion-forward H&M and Zara and online retailers such as Amazon are gaining in popularity at the expense of department stores. Middle-of-the-road department stores, Sears among them, are also being squeezed on the low and high end by other department stores, such as Target and Nordstrom, respectively.

An April report by real-estate research firm Green Street Advisors found that per-square-foot sales dropped 24 percent at mall department stores over 10 years. It suggested Sears and JC Penney, another struggling department store chain, also in an anchor space in West Acres, would have to shed hundreds more stores to become profitable.

“Sears and J.C. Penney have similar issues,” said Ira Kalb, professor at USC Marshall School of Business. “The world of retailing has changed, and to date, neither has done a very good job of adjusting.”

Macy’s, the Green Street report said, would need to shed dozens of stores. The company said Wednesday that it was closing its Grand Forks store, though its West Acres location remains.


“In some ways, this is a generational thing,” said Leon Nicholas, an analyst at Kantar Retail. “(Department stores) failed to respond to all the specialties.”

Even Geatz, who is part of an earlier generation, said she doesn’t shop at Sears anymore than at any other store. She’s sorry to see the department store go but she won’t be going out of her way to get to one, she said.

“It’s always difficult when a well-respected business leaves a big shopping center like that, especially our own local shopping center, but I’m pretty sure that space will be filled and life will go on,” said Charley Johnson, CEO of the Fargo-Moorhead Convention and Visitors Bureau.

Johnson said it says less about the local economy than about Sears.

Reversal of fortune

Mall operators are starting to respond to the trend.

In September, Bloomberg retail columnist Shelly Banjo reported that General Growth Properties, which owns and manages 120 malls around the country, was actually negotiating to get Macy’s out of some of its malls. “Close to zero new malls are being built these days, constricting the supply of real estate. That leaves growing, healthy retailers hungry for good space.”

That sounds a lot like what Heaton is saying.


“We’ve been fortunate in the past few years that we’ve had 98, 99 percent occupancy here at the shopping center, which is fantastic, but it doesn’t give us much opportunity to change the mix, to revitalize things, and re-energize what we do with our tenant mix,” he said. “When spaces come back to us, we look at it as a great opportunity to bring positive change.”

He said mall management has planned to end their relationship with Sears for years but waited until the lease ended.

City records indicate Sears occupies 90,300 square feet of space, which is 10 percent of the whole mall.

But anchors aren’t the only ones struggling. Some specialty retailers are also. At the end of December, Aeropostale and The Limited closed at West Acres as part of a wave of closures around the country.

And there are signs that, despite West Acres’ high occupancy rate, shoppers aren’t spending as much at the mall.

Macerich, a real estate investment trust that owns a 20 percent share of West Acres, has reported declining sales per square foot since 2012 when that figure peaked at $535. In its most recent annual report, it found sales per square foot down to $501, and the mall had moved from its third-best performing malls to fourth.

West Acres could also face new pressure in the coming years, as a Fargo developer hopes to open a large outlet store complex in south Fargo.

“There’s an ebb and flow in what the consumer wants, what the consumer will spend their disposable income on,” Heaton said. “Our job here is to make sure that we’re putting out the best offerings and the best experience that we possibly can so we keep those sales volumes high.”


Rachel Uranga of The Orange County Register contributed to this story.

The website Business Insider reported that the Sears store at the West Acres Shopping Center will be closing.

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