Kohl’s, Forever 21 Eye Growth

Apparel retailers and department stores are two of the retail categories hit hardest by the pullback in consumer spending. Perhaps less obvious is that some retailers also view the economic downturn as a time for growth, even as familiar brands like Circuit City, Mervyns and Linens ’n Things shut their doors for good.The closing of Mervyns, a department store mainstay in the West, is opening doors for the bold expansion plans of other retailers. Kohl’s Corp. and Forever 21 Inc. are each preparing to open 11 new stores this year in former Mervyns sites. The department store and the apparel chain teamed up last December to win an auction for 22 of the 41 Mervyns locations acquired by Macerich.The locations fit into each retailer’s strategy differently, explained Macerich executive vice president for real estate Randy Brant. The sites provide Kohl’s an opportunity to expand a portfolio that stood at 1,004 stores nationwide at the end of last year. All told, the retailer plans to open 55 new stores this year and remodel another 51, according to a recent financial report. Meanwhile, Forever 21 is using the Mervyns’ sites to ramp up the size of its stores from in-line to anchor. In the next month or so, the value apparel chain will open 11 new stores in Arizona, California, Texas and Utah. Its prototype for the large-scale format is a 40,000-square-foot store at Old Town Pasadena, which opened in 2006. The demographics of the trade areas for the retailer’s new locations are remarkably diverse, but Brant suggested that Forever 21 wanted densely populated urban and suburban locations that could support a value apparel retailer.Forever 21’s bold expansion program looks like a risky gamble at a time when clothing store sales keep declining. But Brant pointed out that value retail brands are in the best position to bring in today’s price-obsessed consumers. That advantage is apparently encouraging the chain’s plans to move forward in a forbidding climate. “They look at this as a perfect time to take advantage of great real estate opportunities with a format that will get stronger in time,” Brant said of Forever 21.