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Survival of the fittest: shopping center turnovers reinforce retailing tenet that only strong survive.

A SPATE OF RETAIL CLOsures in The Colonnade and Rock Creek Square shopping centers underscores the volatile nature of retailing, especially in the growing, highly competitive west Little Rock market.

The most recent retail departure was the abrupt closing of Expressions Custom Furniture, the anchor tenant in The Colonnade at 315 N. Bowman Road. In a move that caught both customers and fellow retailers by surprise, owner Joe Bass quietly shut his doors and voluntarily relinquished the custom furniture and home accessories store to the U.S. Small Business Administration.

Linda Rice, public information officer for the SBA in Little Rock, says the agency cannot reveal specifics about the status of Expressions' account. However, Rice could say Bass received a $150,000 loan from the agency in June 1989 and that the 10-year loan at 11.5 percent required monthly payments of $2,140.

The SBA plans to liquidate Expressions' inventory, valued at about $400,000, in a store auction at 10 a.m. Friday, July 16.

Before Expressions' surprise closure, The Colonnade, a 22,900-SF shopping center with 10 storefronts, had nearly achieved 100 percent occupancy. That followed several years in which numerous stores came and went, including one short-lived T-shirt store that recently was emptied during the night.

"It's no secret among the real estate leasing community that it's very difficult to attract good, sophisticated tenants who have the ability to stay in business over the long term," says John Grillo, general partner in The Colonnade.

He says The Colonnade is no exception, having had its share of ups and downs.

Neighboring Rock Creek Square, just a quarter-mile away at Markham Street and Bowman Road, has experienced the same cycles and recently lost four of 13 tenants. Heavenly Ham was the most recent departure, preceded by CompuAdd Superstores (a computer retailer), Paul Truett Shoes and an oriental rug store.

Many Reasons

The closings are attributed to a gamut of reasons: personal considerations, flat sales or, in one case, a trial-lease arrangement that wasn't continued. CompuAdd, which by all accounts thrived in Rock Creek, fell victim to the troubles of its parent company, which filed for bankruptcy.

Don Woodbury, a general partner in Rock Creek whose DWC Commercial Properties LLC manages the center, says the circumstances behind the store closings were all individual and "not related to the business climate in Little Rock." It's "a fluke that they came at once," he says.

Real estate observers seem unfazed by the flux, recognizing it as the only constant in the fickle world of retailing. One reason cited for heavy turnover is that entrepreneurs, many of them first-time business owners, comprise most of the tenant pool in new strip shopping centers such as those in west Little Rock. And with inexperience often comes failure.

Independents also must compete with the ever-increasing number of national chain discounters, who easily suck dollars away from all but the most astute, diligent entrepreneurs.

Though developers are reluctant to acknowledge it, some real estate observers say there's just too much competition for a finite amount of expendable dollars. A proliferation of new restaurants in west Little Rock is intensifying that competition.

Some retailers such as Darrow Jones, owner of Jones & Son Fine Jewelry in Rock Creek Square, are changing locations in hopes of finding one they believe is better suited to their business.

After four years, he says, Rock Creek hasn't reached his expectations as an upscale retail center. The impending vacancy will be Rock Creek's fifth.

Jones, whose home store is in The Market Place on Rodney Parham Road, says he's hoping to relocate his second store on Chenal Parkway in the next year.

Woodbury says he believes Rock Creek Square's quality is "probably superior to most" and as upscale as others.

Rock Creek's two main draws are Hastings Books, Music & Video, one of the center's longest tenants, and Wal-Mart, which sits adjacent to the center. But Wal-Mart will vacate that space in '94 to combine with Sam's Warehouse at a larger site at Bowman and Chenal.

Wait and See

Some small merchandisers and prospective retailers are reportedly anxious to find out who will replace Wal-Mart and how the new tenant will affect the retail mix in the area, particularly in Rock Creek Square.

Woodbury acknowledges that big chain discounters are creating a problem for small retailers nationwide but says, "At the corner of Markham and Bowman, that seems to be a pretty good small-tenant market right now."

Across from The Colonnade is the Bowman Curve center, sitting in the heart of the same-named street. For the first time, it has managed a delicate balance of 100 percent occupancy for roughly the past six months, says John Bailey of the Bailey Corp., which manages the center.

Bailey says interest in retail space along the curve and West Markham remains unflagging despite retail turnover. The influx of more planned retail and commercial development will stimulate rather than inhibit continued activity among small retailers, he says.

Others wonder if, even after a sixth-month firming up period, there still aren't too many retail slots for the number of would-be entrepreneurs willing to try the risky world of retailing with its inherent demands of time and money.

At The Colonnade, Grillo says that ideally he would like to find another home furnishings tenant to assume Expressions' space.

He says the departure of his main tenant caught even him by surprise, and he has not been able to locate Bass to glean anything more about the store's closing.

"We're always talking to people in hopes a good quality retailer will materialize," Grillo says of efforts to replace Expressions.

With the only predictable aspect of retailing being its tendency to evolve and change, Grillo and other center owners may have time and the American dream on their side.
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Author:Walters, Dixie
Publication:Arkansas Business
Date:Jul 12, 1993
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