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Clint Engel

Closings spell opportunity

Kmart, Sears sites could work for furniture

PLAINVIEW, N.Y. - Sears Holdings Corp.'s recently announced plan to close as many as 120 Sears and Kmart locations across the country spells opportunity for expansion-minded furniture retailers, according to an industry real estate expert.
     Julius Feinblum, president of Julius M. Feinblum Real Estate here, said several of the closing locations - both the Sears and Kmarts - lend themselves to the furniture industry and that his firm already is evaluating sites in about eight markets for various retailer clients. He declined to name the markets or the retailers looking to expand.
     "It's very exciting for the furniture industry," Feinblum said of the real estate hitting the market.
     The closings represent about 3% of the company's 3,500 stores. Furniture/Today estimates that Sears and Kmart together had about $500 million in furniture and bedding sales in 2010, so the closing stores could account for about $15 million in sales in the categories.
     Feinblum has a history working with Sears Holdings and the chains' former owners, analyzing and brokering deals for furniture players. Years ago when the HomeLife furniture stores - once part of Sears - folded, Feinblum was involved in leasing many of the locations back to the industry. He has also worked to fill former Kmarts with furniture tenants.
     The Sears sites will be more difficult to work with because they tend to be larger - up to 200,000 square-feet - and on two levels and in malls, but landlords could opt to split up the spaces, said Fred Feinblum, Feinblum's chief operating officer. The Kmart stores, typically about 100,000 square feet, would work for some furniture retailers, but could also be subdivided, possibly to create home furnishings centers with separate rug, carpet and lighting stores, he added.
     Asked if the closing stores are among the worst locations for Sears, Fred Feinblum said it's unfair to make such a blanket statement, noting that previous closed Kmarts have worked fine for the industry - as will the 102,000-square-foot store in Florence, Ky., that Morris Home Furnishings announced it would be taking for a new location late last year. That store is along a major home furnishings shopping strip, he said.
     "There are a lot of smart (retailers) out there kicking the tires," Fred Feinblum said. "They've seen an up tick in business, and they're trying to take advantage of the still-depressed real estate."

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