Downturn takes toll on retailers, just as Utah was becoming home to expansions
This is an archived article that was published on sltrib.com in 2009, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

When hip apparel chain Steve & Barry's opened its first store in Utah in Murray, bargain shoppers rushed to snap up an array of budget-minded merchandise inspired by celebrities. Company officials said the store, if successful, could lead to a number of others along the Wasatch Front.

What a difference a year of economic crisis makes. The company is closing its only Utah location today as part of a nationwide plan to survive in difficult economic times.

Steve & Barry's joins a growing list of retailers closing locations along the Wasatch Front, an area that came of age just a few years ago as a hot-growth spot for retailers such as furniture giant IKEA and outdoors-oriented powerhouse Cabela's. Back then, scores of merchants of all sizes were expanding into Utah with their first stores.

As 2009 begins, it's the number of vacant storefronts that are proliferating as anxious consumers have slammed their pocketbooks shut.

"Clearly we're having an unprecedented down cycle in retail," said John Owens, a retail specialist with Commerce CRG. "I don't know how many store closings we're going to see in Utah this year, but we are going to see more of them."

Although some retailers actually are expanding their Utah operations, others, such as Steve & Barry's, are or will exit the state altogether and live on in other states deemed more profitable operating areas.

In other cases, such as with Mervyns and Linens 'n' Things, retailers will truly go out of business, closing all locations everywhere, including those in Utah. The Harold's apparel chain, for example, has closed all of its stores in 18 states, including one in the Trolley Square shopping center.

More common than total companywide liquidations, however, are instances in which an established retailer remains in business but pares down its network of outlets. Sears Holding Corp. is liquidating the inventory of its Sears Grand store in American Fork, one of 22 "underperforming" stores nationwide being closed during the first quarter.

It doesn't matter how recently a store opened. Just two years ago, Sears made a substantial investment to convert the American Fork outlet, originally a Kmart location, to the more expansive and flashy Sears Grand concept.

Nationally, a number of retailers, such as troubled electronics seller Circuit City, arts and crafts chain Michaels and video-rental chain Blockbuster are closely examining the performance of all their stores, said Daniel Butt of commercial brokerage NAI Utah. Whether Utah will be affected remains uncertain.

"They will pick and choose the top performing stores and they'll close some of the ones that aren't doing very well," he said.

Retailers that already have decided to close some locations in Utah include Office Depot, which is closing locations in downtown Salt Lake and in Murray, and Starbucks.

Three Starbucks stores -- in Ogden, Syracuse and Riverton -- are set to close early this year, the company has announced, although on Tuesday employees said they have not been notified of a closing date.

The spate of closures along the Wasatch Front has pushed retail vacancies higher, so tenants now have the upper hand, and rents are softening.

The good news for the retail sector in Utah is that it may be much less affected than counterparts in other areas of the country, where there is more economic suffering, including job losses and home foreclosures. Utah, although affected by the national downturn, so far remains economically healthier than many other states.

Some retailers, bullish on Utah's strong population growth and comparative strength, are adding locations here. Kohl's plans to open store in Clinton in March, employing 150 people.

Kohl's also is set to expand in at least one now-vacated Mervyns store in Utah, in the Brickyard Plaza shopping center in Salt Lake City.

Trendy apparel chain Forever 21, which has a small store in The Gateway shopping center, has announced it will expand with a larger store in South Towne Center in Sandy in space formerly occupied by Mervyns. Mall spokeswoman Natalie Watson said no opening date has been set.

"Shoppers are excited about the Forever 21 concept" coming to the mall, she said. "It's something different."

Stores opening their first location in Utah will be harder to come by this year, but there still may be a few. Commerce CRG said grocery chain WinCo Foods, for example, is set to expand with multiple locations.

Compared with other states, Utah is expected to recover its economic health more quickly, which eventually could help stem the tide of store closures and lead once again to retail expansion.

But Utah's economy does have some suffering to do, and more stores will close here. "I think we're going to have a lean year or two, for sure," said John Owens of Commerce CRG.

lesley@sltrib.com

Retail closures

-- Office Depot. The office-supply retailer is liquidating two stores in the Salt Lake area, in The Gateway shopping center in downtown and one on State Street in Murray as part of a nationwide plan to close 112 stores early this year.

-- Linens 'n' Things. Closed Murray, Sandy and Park City locations as part of a nationwide liquidation.

-- Sears Grand, American Fork. Closing set for late February.

-- Mervyns. The Stores along the Wasatch Front have closed after several months of liquidation sales.

-- Starbucks is set to close locations in Ogden, Riverton and Syracuse. No set closing date is available.

-- Steve & Barry's, Murray. Will close its only Utah location today.

After opening in Utah to much fanfare a little more than a year ago, Steve & Barry's is closing down its Wasatch Front operation.

Sears Holding Corp. is liquidating its Sears Grand store in American Fork, one of 22 "underperforming" U.S. stores being closed in the first quarter.

Despite other retail closings, trendy apparel chain Forever 21 is expanding with a larger store in South Towne Center in Sandy in space formerly occupied by Mervyns.

Closings » Some merchants are adding stores, many are in retreat
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