Yesterday, the Spiegel Group announced plans to close 13 percent of its Eddie Bauer stores as part of the company’s Chapter 11 restructuring efforts. Twenty eight of the 60 stores to be closed are located in high-end southern trophy malls owned by major REITs, says Thomas Wiesel Partners analyst Paul Morgan. He says the retailer’s cold-climate goods were a wash with consumers in warm areas. Non-Southern closings include Eddie Bauer stores at Simon’s The Shops at Mission Viejo in Los Angeles and General Growth’s Ala Moana in Honolulu.
"Given the high-end slant of so many of the store closings, retenanting the affected locations shouldn’t be a major problem for major mall REIT landlords, " Morgan says. But in light of bebe and Charlotte Russe’s recent announcement to curb 2004 expansion, he says a further, possibly larger, round of Eddie Bauer closings would not be so easy to absorb.