Sears wasn’t good fit for State Street scene
By: Ellen Jean Hirst
State Street increasingly caters to a young hipster crowd. H&M sits across from the Gap and Claire’s. Forever 21 just replaced Charlotte Russe, and Express replaced New York & Co.
Carson Pirie Scott was out in 2007. And now, so is Sears.
“Sears as a store does not fit the retail cotenancy of State Street. … The market will applaud this,” said John Vance, vice president at Stone Real Estate Corp., which collects data on the performance of Loop retail.
The Sears store has been losing millions of dollars since it opened in 2001, a company spokesman said. But other stores nearby, targeting a younger demographic, have been thriving.
In 2012, the most recent year for which Stone Real Estate had available data, retail vacancies in the Loop were down 1.7 percentage points, to 11.9 percent, from 2011. Rental prices on State Street in that year ranged from $95 to $125 per square foot, compared with $60 in 2007. First-floor retail space especially demanded “three digits,” Vance said.
During lunchtime Wednesday, bundled-up shoppers buzzed in and out of stores, carrying H&M and American Apparel bags. A few dozen shoppers looked at clearance racks on the first floor of Sears, which mostly showcased women’s clothing and accessories, fragrances and fashion jewelry. Its second and third floors have men’s clothing and large items like strollers and treadmills. Marta Melkowska was one of the few shoppers at the basement level.
Melkowska, who is planning a trip, was looking for a piece of luggage she saw advertised at competitive price. “But it wasn’t good quality,” the River West neighborhood resident said. Instead, she was inspecting a pan in a kitchenware aisle.
“This is a perfect location (for a store) because there are so many people around here,” said Melkowska, who works downtown as a property accountant. “(But) the merchandise isn’t really for working people. Who’s going to buy these big items? There’s no parking to put it in your car . … I’m not going to be taking huge bags back with me to work.”
Jim Kolenda, a regular Sears shopper who bought some winter fleece on the first floor, said he usually doesn’t buy big items at the store because there’s no way to get them home to the Wicker Park neighborhood.
Kolenda works at an insurance company on North Michigan Avenue and browses Sears for sale items about once a week. He sometimes buys his shoes at Sears and has his watch repaired there.
“Generations shopped here,” Kolenda said. “Everyone went to Sears to have their DieHard battery changed. … But you’ve got to keep up with the change.”
Sears first established itself on State Street in 1932 at Van Buren Street, and it left a half-century later. After an 18-year absence when it followed its consumer base to the suburbs, Sears returned to State Street in 2001, though farther north, at Madison Street.
Sears plans to pull out of the downtown market by April, starting its liquidation sale Sunday. But it will maintain its presence on the fourth floor, where about 150 employees work on Sears’ websites, mobile apps and other technology-based initiatives.
Vance said other large retailers will likely jump at the opportunity to lease Sears’ prime corner location. Whether the first-floor space is leased as one unit or is divided and leased to several retailers will depend on the market and landlord, he said. The former Forever 21 location, he said, also is available.
But one nonretail entity is planning to move its headquarters into space Sears once occupied. Chicago Public Schools plans to occupy the second and third floors and basement, and part of the first and ninth floors, according to a deal its board approved last month.
During the first four years of the 15-year lease, CPS will pay $31 per square foot for floors 1, 2, 3 and 9 — a total of 122,064 square feet — and $23.50 per square foot for the basement level.
The lower level consists of 60,270 square feet, but CPS will receive 20,000 square feet rent-free, according to a Board of Education document.
Meyer Chetrit with the Chetrit Group, a managing member of the property, could not be reached for comment Wednesday.
Vance said he expects the extra foot traffic from CPS to be a plus in attracting retailers to the available first-floor space.
“This is a large amount of space that’s available, well located,” Vance said, “and now you have prospective retailers looking on the street saying … that’s what I’ve been waiting for.”