Business

On Topic: Gray skies are gonna clear up

Retailers remain an optimistic bunch, despite some troubling signs

Stephen Mally/The Gazette

A Gander Mountain spokesman says the chain still plans to move into this under-construction 52,000-square-foot anchor store on Blairs Ferry Road NE in Cedar Rapids.
Stephen Mally/The Gazette A Gander Mountain spokesman says the chain still plans to move into this under-construction 52,000-square-foot anchor store on Blairs Ferry Road NE in Cedar Rapids.

There’s this joke I like about this guy who telephones his brother who now lives in another state, and he says, “Hey, Billy, our family cat, the one you grew up with, died last night.”

And the brother gets upset and replies, “What’s wrong with you? Don’t just break bad news to me like that. Lead up to it gradually, a bit at a time. You know, sort of like, ‘Hey, Billy, I wanted to tell you, our cat is stuck up on the roof.’ Something like that.’”

The first brother says, “Gee, you’re right, I’m sorry. I’ll keep that mind.”

A couple weeks later, the guy calls his brother again, and he says, “Hey, Billy, I wanted to tell you, grandma’s stuck up on the roof . ”

Retail in Eastern Iowa and across the country isn’t exactly stuck up on a roof. But in some cases, it looks pretty close.

In just the past few weeks alone, I’ve scoured the websites and reached out to corporate communications people to get local updates for business stories for The Gazette on what’s happening with Gordmans, Staples, Gander Mountain and J.C. Penney.

All those chains have operations here in the Corridor and all have announced they’ll be shutting down locations. Each time, I’ve asked pretty much the same question: What’s happening with your stores here?

Sometimes, the corporate answer was, We’ll let you know when we know.

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Staples early this month said it would close 70 of its stores in North America. Right now it operate brick-and-mortar locations in Cedar Rapids and Iowa City in our neck of the woods.

The Framingham, Mass., chain’s hard times got harder when the feds stymied its plan to merge with Office Depot, citing antitrust reasons — to the surprise of some given the declining foot traffic for buying office supplies.

On March 6, Omaha, Neb.-based Gordmans said that part of its chapter 11 bankruptcy, it would close all 106 stores, including its venues in Cedar Rapids, Coralville and Waterloo.

And then there’s Gander Mountain of St. Paul, Minn., which on March 10 — after national news wire services reported it was getting ready to file for chapter 11 — announced it would turn out the lights on 32 “underperforming” stores. A spokesman told me none of the venues of the chopping block were in Iowa. And it still plans to move into the under-construction 52,000-square-foot anchor store on Blairs Ferry Road NE.

On March 17, Plano, Texas-headquartered J.C. Penney finally put out a list of the 138 stores it will be shutting down over the next several months. Four will be in Iowa, but none in the Corridor. Those marked for darkness are in Decorah, Fort Dodge, Oskaloosa and Ottumwa.

For each vacated building, that’s another big chunk of commercial real estate not paying property taxes.

A number of industry observers have suggested in recent months that grocery stores can be the answer for luring shoppers to ailing malls — enclosed and strip alike. That’s not an always-winning solution, though — while Lucky’s Market moved into part of Von Maur’s former location in the strip mall once known as Sycamore in Iowa City, the 24,000-square-foot space that housed Fresh Market on Blairs Ferry, on Cedar Rapids’s northeast side, remains silent.

All is not lost in the retail world, though. Market Watch columnist Philip Van Doorn listed 10 chains that are doing reasonably OK these days, including Lowe’s, Foot Locker, O’Reilly Automotive, Dollar Tree and, of course, Wal-Mart.

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And then there’s this: The CIT Retail Outlook survey, put together by the Harris Poll people and released in November 2016, characterized its respondents’ confidence level as “bullish.”

While they admitted that “brand strength and popularity of prominent retailers is steadily eroding … many may not exist three years from now.”

And yet, many of them at that time believed they’d have a merry Christmas, sales-wise — which they didn’t, as it turned out.

Moreover, “They also have plans to continue that growth for the next three years and to increase hiring for next year, especially in the internet/mobile category,” the survey found.

That’s the thing about retailers, and why we cannot count them out so easily or early. They are an optimistic bunch.

For them, the sun’ll always come out tomorrow.

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— Our Iowa Ideas symposia continue to roll out. This coming Tuesday, The Gazette will bring the conversation to the University of Northern Iowa’s Maucker Union. The two topics will be agriculture and higher education.

— Two weeks later we’ll be in Sioux City, at the Stoney Creek Hotel and Conference Center. Our guests will talk about ag as well energy and environmental issues key to Iowa.

Join us, won’t you? Go to thegazette.com/iowaideas to sign up.

— And on April 30, the second edition of “Iowa Ideas” magazine will be out. If you don’t receive a copy with your Gazette subscription, you can sign up to have one mailed to you, free, at thegazette.com/iowaideas.

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Michael Chevy Castranova is business editor of The Gazette; (319) 398-5873; michaelchevy.castranova@thegazette.com

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