Experts say workers should easily find other jobs, while vacant stores present opportunities.
The closing of all Toys R Us and Babies R Us stores nationwide and four local Southeastern Grocers locations due to bankruptcy reorganization will mean more available retail space in the Jacksonville area.
It also will potentially put hundreds of their employees out of work.
The 70-year-old Toys R Us announced last week it will close its more than 700 U.S. locations, resulting in the loss of 33,000 jobs.
Then late Thursday, Southeastern Grocers announced it will close 94 stores, including two Northeast Florida Winn-Dixie stores and two Harveys Supermarkets as part of a prepackaged Chapter 11 bankruptcy filing.
Industry experts suggest the actions by Southeastern Grocers may have a larger impact locally than Toys R Us, in that the latter affects fewer workers and no local corporate positions.
“The retail market, especially in Jacksonville, is so hot that every store seems to be hiring,” said CareerSource Northeast Florida Vice President of Communications Candace Moody of Toys R Us workers who will be displaced.
“The employees will almost certainly be snapped up by another store very quickly,” she said
With an average of 40 employees per store — most of them part-time — Moody said the market easily can absorb the displaced workers.
Those affected by the Southeastern Grocers bankruptcy, though, are greater in numbers. The company has not said how many jobs are affected.
“These stores are larger, so more employees will be impacted,” Moody said. “And the uncertainty of the bankruptcy will mean that some workers not affected, especially in headquarters and administrative positions, will begin to look elsewhere.
“It makes it harder for the company to recruit and retain top talent, but the affected workers will find plenty of other retail opportunities,” she said.
Closing are Winn-Dixie stores at 9866 Baymeadows Road in Jacksonville and at 248 Blanding Blvd. in Orange Park and the Harveys Supermarkets at 1012 Edgewood Ave. N. and 3000 Dunn Ave. The stores will close on or before April 30.
In May 2016, Southeastern Grocers rolled out the city’s first new-concept Harveys, the Edgewood location, to much fanfare, with President and CEO Ian MacLeod hinting at the continued expansion of the brand here, duplicating the new prototype.
The four Southeastern Grocers locations represent approximately 224,900 square feet of combined space.
The liquidation of the Toys R Us — it is $5 billion in debt from a leveraged buyout and is being squeezed out of the marketplace by online retailers — will bring the closure of four area locations.
Already closed is a 37,500-square-foot Babies R Us store in the Argyle Village Shopping Center.
Remaining is a 41,251-square-foot store at 1972 Wells Road in Orange Park, a 74,018-square-foot combined Toys/Babies R Us at The Markets at Town Center and a smaller location at the St. Augustine Outlets.
The closure will leave a large hole at The Markets at Town Center, where Toys R Us and Babies R Us are next to a former Best Buy space.
Hines, landlord for The Markets at Town Center, lost the electronics retailer last year to The Strand at Town Center across the street.
Representatives for Hines did not respond to interview requests.
Colliers International Executive Vice President Jason Ryals, said the closings can be turned into an opportunity.
When the vacant stores are combined, they give Hines more than 100,000 contiguous square feet to market.
“If it’s just Best Buy that’s available, it becomes a Staples or a Michaels,” Ryals said. “Now they have 100,000 square feet and they can go after a special retailer with that type of vacancy.”
“There aren’t a lot of 100,000-square-foot boxes in Florida that are in that good of a location,” he said.
“That opens it up to a special type of retailer that is not in the state looking for that special opportunity to get into Florida,” Ryals said.
“I think you will see Toys R Us and Best Buy backfilled with a name that isn’t here yet, and soon enough people will forget they were ever there,” Ryals said.
Rather than a harbinger of a negative trend for brick-and- mortar retail, Ryals said the closing of Toys R Us is part of the natural cycle of the industry.
He previously brokered the sale of two other former Toys R Us locations in Jacksonville, one on Philips Highway that is the entertainment complex Main Event. The other, in Regency, is a car dealership.
He sees similar promise for Orange Park.
“There is a real opportunity there for something better,” Ryals said. “Toys R Us in Orange Park didn’t move the needle for most folks in that area. I think most of them just drove past it and didn’t give it a second thought.”
Alexander Evans, regional leasing director for Weingarten Real Estate, said the Orange Park vacancy will be short-lived.
“We have anticipated Toys R Us filing for bankruptcy, and we have been in talks with several prospects over the past six to eight months to backfill the space,” he said. “We cannot announce any new retailers at this time.”
Despite continued threats from online retail giants such as Amazon.com, Ryals said traditional retail will endure.
“I think that the retail apocalypse, or whatever you want to call it, is really kind of typical of our society in that we blow things out of proportion,” Ryals said.
“If you look at the last 60 years, you’ve seen cycles. Pick a date and you will find some retailer that has died. Montgomery Ward died in the 1980s and nobody misses it.”
No market concerns
The closing of the Winn-Dixie and Harveys stores did not send shock waves through the local market, said Carrie Smith, managing director of commercial real estate broker Franklin Street.
She said owners of the soon-vacant larger boxes should have little problem backfilling them.
“If I were involved in the leasing, I would not be discouraged at all,” Smith said. “Probably the low-hanging fruit is going to be another grocer. How they fit into the boxes I don’t know, but you have an opportunity for somebody in the organics space, particularly at the Baymeadows and Blanding sites. The other two sites you could backfill with discount grocers, like Sav-A-Lot.”
Smith said the Dunn Avenue and Edgewood locations could also be candidates for dividing the space for junior anchors such as Five Below and Dollar Tree.
“I wasn’t discouraged at all about this being some issue in the industry,” Smith said. “I think it opens up more opportunities than anything. I was talking to one of the Winn-Dixie (location) owners this morning and he already has a backup plan.”
Smith said retail center owners tend to be proactive, particularly when they have tenants experiencing financial difficulties. Even though the announced closing of six big-box retail locations within a few days is out of the ordinary, she’s confident the local market can absorb the space.
“I think it’s unusual for that much inventory to hit the market in one week, but it really is not a shock to anyone in our industry,” Smith said.
“If you are a potential tenant you are already in conversations with the owners to backfill that space,” she said.
Evans said retail will continue to evolve as the industry grapples with rapidly changing market conditions.
“There certainly are challenges ahead of us as the consumer buying preferences continue to evolve, but our merchants can and will adapt to the changing climate,” Alexander said. “A physical presence will play a significant role in their ongoing success.”
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