Dallas-Area Retailers Step In to Make Large Vacated Stores Their Own. - Knight Ridder/Tribune Business News

By Steve Brown, The Dallas Morning News Knight Ridder/Tribune Business News

Aug. 2--This week's announcement that department store Lord & Taylor is closing its two stores is all too familiar to the Dallas retail market.

Big national retailers have closed dozens of stores in North Texas in the last few years. But so far the market has successfully recycled these empty retail boxes.

Of the 21 Kmart stores that were shuttered in 2002 and 2003, only a handful languish, according to a study by Weitzman Group.

'If you count up how many of the Kmarts have been released or sold, it's amazing,' said Weitzman broker Jill Tiernan. 'They've done very well.'

Most of the vacant discount stores have gone to other retailers.

For instance, the Kmart at 6000 Skillman in Northeast Dallas is now a Home Depot. And Lowe's tapped the store at 3500 West Airport Freeway in Irving.

J.C. Penney is negotiating to occupy a store in Burleson, and Wal-Mart took two locations u one in Arlington and one in Fort Worth. Both of those buildings are owned by Kimco Realty Corp., which had to find tenants for 11 empty Kmarts in Texas and Oklahoma.

'Almost all of mine have gone to other retailers,' said Jennifer Reynolds, regional director. Kimco's only empty Kmart that's still waiting for a new tenant or buyer is on Skyline Drive in Duncanville.

Ms. Tiernan of Weitzman Group is hunting a deal to take that one off the market.

The solution might include multiple tenants or a nonretail use, she said.

'When they are built, the buildings are designed for recycling and splitting up for several tenants,' she said.

A steady stream of empty stores have come on the market in the area. Along with Kmart, Montgomery Ward, Service Merchandise, MJDesigns, Homeplace, Wickes Furniture, Sears Home Life and others have shuttered stores. At the same time, some retailers still in the market u including Target, Wal-Mart and Home Depot u have opted to build larger stores, leaving their old boxes behind.

The empty locations create opportunities for retailers that want to expand.

Filene's Basement, an off-price merchant, is negotiating to take the empty Kmart in Plano. And stores including Academy Sports & Outdoors, Dollar Tree and Hemisphere have taken over other vacant Kmarts in the area.

'There are some retailers that build their strategy around taking over other people's empty boxes,' said Jack Thompson in the Dallas office of Ernst & Young LLP.

The empty stores also allow fledgling retailers a chance to occupy a high-profile location.

A mercado-style Hispanic market took over the empty Kmart at Interstate 30 and Buckner Boulevard in Far East Dallas. And a bazaar leased the location on Broadway Boulevard in Garland.

'None of our locations was converted to alternative uses,' said Ms. Reynolds.

'But that's a viable option for some of these properties.'

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(c) 2003, The Dallas Morning News. Distributed by Knight Ridder/Tribune Business News.

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