A glut of empty stores usually is the byproduct when major retailers merge, downsize or go out of business.
Pittsburgh-area retail centers were stung when chains such as Phar-Mor and Ames disappeared and Kmart closed stores because of financial problems. Those store chains alone, in fact, left more than 40 vacant retail spaces in the area.
Late this month, Kmart Corp. plans to acquire Sears Roebuck & Co. The giant Federated Department Stores, the Cincinnati-based parent to Macy's and Bloomingdale's, this week announced plans for a $17 billion merger with St. Louis-based May Co., parent to Kaufmann's.
That's leading to more speculation about what will happen to those companies' local stores, but real estate experts say the region has been fairly successful so far in attracting other retailers to large, empty storefronts.
Erik A. Fry of Grubb & Ellis Co., a Downtown-based commercial real estate firm, said other empty "big box" stores found new uses even before the collapse of Phar-Mor and Ames. So finding tenants to "fill the empty spaces for malls or commercial areas where the retail corridor is strong was not difficult," he said.
Still, a look at the old Phar-Mor and Ames locations shows a mixed picture.
Two years after the last 16 Phar-Mors in the Pittsburgh area closed, 14 of them have new tenants, an informal survey shows. New stores occupy 14 locations that Ames closed in 2002, but at least four remain vacant. And retailers are operating in at least two of four local stores that Kmart closed in 2002 and 2003.
"Every situation is different," said Donald Martin, director of property management for First City Co., which manages 15 shopping centers in Western Pennsylvania -- including the Penn Hills Shopping Center, where an Aldi Foods and Dollar Tree occupy a former Phar-Mor but an Ames location remains vacant.
Elsewhere, the stores have seen new incarnations as food markets, furniture or discount stores, or as expansions of nearby large retailers.
Demand for retail space is relatively strong in the Pittsburgh area. Vacancies were near 10 percent in early 2003, but were below 8 percent at the end of 2004, a Grubb & Ellis study found. "Healthy retailers will continue to expand and reposition to capitalize on regional locations," the study said, and this will free up spaces in neighborhood strip centers for other retailers -- most likely discounters.
Local and national chains also have seized space at closed stores.
Giant Eagle Inc. bought the leases of 10 of the 27 Phar-Mor stores in Western Pennsylvania and eastern Ohio when the discount chain went out of business. Now, its supermarkets have expanded into Phar-Mor space at Village Square in Bethel Park and on Tarentum Bridge Road in New Kensington. The site of another Phar-Mor on Saw Mill Run Boulevard in Brentwood is to become a Giant Eagle GetGo gasoline station.
In Westmoreland County, Target plans to demolish a former Ames at J.J. Gumberg Co.'s North Huntingdon Square shopping center, to make way for one of its stores. And Lawrenceville, Va.-based Peebles already has opened one of its department stores at a former Ames in Countryside Plaza, East Huntingdon.
There already has been much discussion about what impact the just-announced Federated-May combination might have on Kaufmann's and Lazarus-Macy's locations, with most expecting the Kaufmann's nameplate -- although not necessarily its stores -- to eventually disappear in the area.
Federated is scheduled to convert the four local Lazarus-Macy's stores -- at the Monroeville, Ross Park and South Hills Village malls, and in Natrona Heights -- to Macy's on Sunday. May Co. operates 10 existing Kaufmann's stores in this area, and is scheduled to open a store in July at the Pittsburgh Mills complex in Frazer.
In the meantime, analysts have been divided as to the potential effect of the Kmart-Sears merger on existing stores, including in this area, where Kmart has 17 locations and Sears 10.
"If there is an overlap of some stores, a number of them may be closed," said Matt Shaefer, associate broker at the Hendrickson Retail Group in Collier. But because all four chains have specific "tiers of stores" catering to different tastes, this could lessen the impact of consolidation, he said.
Sears recently announced plans to convert 25 former Kmart and/or Wal-Mart stores across the country into a new brand, Sears Essentials, although none of these stores will be local. The company plans to open its first area Sears Grand store -- touted as the answer to top competitors Wal-Mart and Target -- this summer at the new Pittsburgh Mills.
What's in store
Phar-Mor stores, and current uses
Former Kmarts, current uses
Former Ames stores, current uses
