CHICAGO, IL-Joan Woods, (top right photo) Regional Director, Specialty Leasing, MadisonMarquette, says BusinessWeek recently tackled the complex world of merchandise liquidation and suggested that liquidators are overwhelmed with the amount of product moving through the system. One byproduct of this swelled pipeline is that some liquidators are in talks to bring merchandise back to the “scene of the crime” and create specialty liquidation events in vacant space at malls and other traditional retail destinations.
Liquidators like Liquid Event Sales and AMS Liquidators (Disney Character Warehouse Liquidators) are in talks to lease space recently vacated by big boxes in order to sell off excess inventory from their ever growing list of clients.
From a center owner’s perspective, these opportunities can generate substantial cash flow while the leasing process runs its course. However, it is important to consider several factors before proceeding:
-Will liquidation stores be selling merchandise that existing retailers are selling at full price? If so, restrictions need to be put on what types of merchandise can be sold. -Does a liquidation concept harm the upscale look and feel of the center? If so, partner with a liquidator who understands how to design a temporary store that doesn’t look temporary. Despite the stereotype, there are some very sophisticated new concepts out there.
-Hosting liquidation stores should never come at the expense of traditional leasing efforts.
Liquidation services are at an all-time high because of the dismal holiday season. Retailers have responded by scaling back their inventory and no one should expect these temporary tenants to transition to long-term leases or be a viable part of a merchandising mix moving forward.
Contact: Kurt Ivey, kurt.ivey@madisonmarquette.com
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