The news just keeps getting brighter!
Now Regis Corp., the parent of Supercuts and other salon chains, says it plans to close about 160 stores, most of them in malls. Granted, the company operates 8,500 units around the world, but this still can’t bode well for the industry.
We’re sure that Supercuts and similar concepts don’t take up a whole lot of space in a shopping center, but all of these small-store closures have to be adding up for landlords.
Are there ways a shopping-center owner can combat a situation when stores like this go dark, or are vacancy rates just bound to rise? Or are we just making too big a deal of this?
Counter Culture 
Makes sense — people aren’t spending money like they used to, even for grooming. Like when a salesperson approaches most people in a store, the customer-to-be demurrs and says, “…no thanks, just looking….”. The customer doesn’t want to make a commitment to talk for 10 seconds, never mind buy something!
People are going to malls this summer for the same reason they found to go to a movie, any movie, in the summer in the 50’s — to cool off in the “free” air conditioning.
Current reduced (and non-purchasing) foot-traffic can’t support the SuperCuts in stressed or de-stressed locales. Pardon the obvious pun, the chain is “cutting” their losses.
Losing a few Supercuts is not a big loss. There are other chains, as well as independent salons who would gladly absorb the business. I think people losing their closest Starbucks will be more panicked than people losing their economy hair-cutting store.
However, in general, I do think that an increase if dark retail space is going to put strain, not only on shopping center owners, but on other retailers whose rents might rise to make up for the vacancies….it all rolls down hill.
If a business closes due to bad managment, its understandable. If a business closes due to becoming obsolete (horsewhips, buggies and shoing),its understandable. If chains cutback due to over saturation, its understandable. What’s not understandable is why this is not understandable, especially since prices are going up on every product and service, taxes are going up on almost everything that can be taxed and most consumers have limited dollars to spend. Is this greed, survival or politics that’s changed the face of our economy? Can our free market economy survive these gyrations? The answer is YES, just as all of the prior recessions that we have had every 8 to 10 years for about the past 100 years.
The difference with this one is that we’re all currently living through it right now and it’s not going to end tomorrow! But uncontrolled greed, mis-managemnet and unethical practices in business, in our personal conduct, in our political leadership and in the news media reporting, will pro-long the damage. Each one of us must be accountable and take responsibility for our actions in doing the right things to get our lives and economy back on track.
Sorry, but too much is being made of this in particular. No one really goes into reasons. Retailers had a hay day and expanded quickly and realized that some RE decisions were too aggressive and store closings are in a great part due to overgrowth and so they are eliminating under performing stores. Further, to comment on SuperCuts specifically, who thinks of going to THE MALL for a hair cut. It’s a shopping destination, I don’t even see why there are nail salons and how they survive. These are services that we want to have in our neighborhoods, hence why they do well in grocery anchored strips, not regional malls. So I think…YES…too much is being made of this one instance. They realized being in a reg. mall for a quick service, in and out hair cutting makes no sense…becase…let’s face it folks…there is NOTHING convenient about going to a mall, having to park 10 miles from AN entrance and then research where the store is and the trapse around the mall trying to find it. I don’t know why they even made the decision in the first place…but this is just one broker’s opinion.
Stores don’t need to go dark, the underlying asset needs to be revalued to reflect the economic conditions/changes (ie Landlord’s need to mark down the price of the space and pass the savings on to the retailer). Especially, if gas goes up to $7 or $8 bucks per gallon. With talk of oil at $150 or $200 per barrel by year end, it’s not altogether unrealistic. No one likes to mark down assets, the first wave is the banks, the next wave is the Landlords. Get ready Landlords, you’re up. “Happy Days are here again…..” Vacancies are bound to rise.
Regis said that most of their locations they were closing were in malls, so this really doesn’t touch the Supercuts stores, since they are in strip centers. Since Regis has more than 12,000 stores worldwide, this isn’t much to be concerned about. If you’ve got that many stores, it seems like closing such a small number is just taking out the underperformers. Just one gal’s opinion.