Retail space opens up as big chains shrink

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Many big chain stores are expected to keep downsizing, letting other retailers grab the vacant spots in malls and big-box buildings more cheaply.

Janss Marketplace in Thousand Oaks includes a vacant department store once occupied by Mervyns, which failed in October 2008. (Mel Melcon / Los Angeles Times / December 30, 2009)

By Roger Vincent

Surges of large-scale retail bankruptcies such as Circuit City electronics and Mervyns department stores altered the shopping landscape in 2009 -- and experts say 2010 is likely to bring even more changes.

Amid a still-tepid economic recovery, big retail chains are expected to continue closing their less productive stores and retrenching on expansion plans. But at the same time, others will be hurtling into the breach to take advantage of falling rents and vacancies in neighborhoods they couldn't get into a few years ago.

"The prediction for next year is more re-sizing and relocating of retailers," said real estate broker Richard Rizika of CB Richard Ellis.

There are almost 100 empty big-box retail stores in Los Angeles County, according to a study by Rizika. They have a combined total of 4.5 million square feet, or about 78 football fields' worth of vacant space for rent or sale. Most of that came from liquidated businesses Circuit City Inc., Mervyns and home furnishings chain Linens 'n Things Inc.

Neighborhood and community shopping centers in Los Angeles experienced falling rents and rising vacancies in the third quarter, according to real estate data provider Reis Inc. About 5.7% of the space is empty, a slight increase from a year earlier.

Taking advantage of bargain rents, big-box retailers PetSmart Inc. and Staples Inc. are introducing smaller stores that will enable them to fit into more expensive or more urban locations where space is at a premium, Rizika said.

Bargain-chic women's clothier Forever 21 Inc., once a chain of small boutiques, is upping the ante by moving into full-size department stores abandoned by Mervyns.

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PetSmart Inc. and Staples Inc. are introducing smaller stores that will enable them to fit into more expensive or more urban locations where space is at a premium

This is not a new trend, as anyone who actually shops in an urban area can tell you.

[Richard90027 1]

I hate going to those big stores anyway, would rather shop online to get better deals and avoid taxes when possible

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and avoid taxes when possible

So you pay them at the end of the year... right?