By Drew FitzGerald
More small retailers will be open for business on Thanksgiving
Day--and they m not have a choice in the matter.
While most department stores set their own hours, the small
shops that line mall hallways tend to follow their landlords' lead,
industry executives say. Mall owners in turn take their cues from
"anchor" chains like J.C. Penney Co. and Macy's Inc., which have
made it clear that opening Thursday evening is the new tradition.
J.C. Penney plans to open most of its stores starting at 3 p.m. on
Thursday, while Macy's will open at 6 p.m.
Mall owners consider it "imperative for retailers and
restaurants to be open" on Thanksgiving, said Anjee Solanki,
national director of retail services for Colliers International
Group Inc., a real-estate-services firm. "This is when they can
capture as much foot [traffic] as possible and drive future
business with specials for the following month. Every tenant must
adhere to the hours for uniformity."
Stores that break mall hours can be subject to steep fines and
other consequences, retail and real-estate executives say.
"Merchants are required to open at 6:00 p.m. on Thursday,
November 26th, (Thanksgiving Day) until closing at midnight," said
one letter from the Sunvalley Shopping Center in Concord, Calif.
"All merchants have the option of remaining open midnight through
5:00 a.m. if they choose."
A spokeswoman for mall landlord Taubman Centers Inc. said eight
of its other properties will stay closed on Thanksgiving, but not
Sunvalley.
"History has shown that Sunvalley shoppers come out on
Thanksgiving so we continue to open on the holiday to please them,"
the spokeswoman, Maria Mainville, said. "We ask that all in-line
stores open so our customers have a consistent shopping
experience."
Store managers say mall owners often threaten fines for staying
closed on Thanksgiving but rarely collect on them. "Most of the
time, we can call up the mall and they'll waive it for the first
offense," said one retail executive with stores in dozens of malls.
"That's kind of what we're banking on this year."
About half of the major mall owners sent tenants letters this
month warning them that Thanksgiving hours were mandatory, this
executive said. "The request is universal," this executive said.
"The enforcement seems to be random."
About 12% of U.S. consumers plan to visit a store on
Thanksgiving Day, according to a survey of more than 1,000 people
by the International Council of Shopping Centers. That works out to
about 38 million shoppers.
The vast majority of indoor malls will have most or all of their
stores open on Thursday to meet the demand, ICSC spokesman Jesse
Tron said. Jones Lang LaSalle Inc., which manages malls and
shopping centers on property owners' behalf, said 23 of the 30
malls it manages plan to open at some point on Thursday.
Greg Maloney, chief of Americas retail at JLL, said a subset of
owners started testing Thursday hours last year and aren't likely
to pull back in the coming years.
"Thanksgiving is going to become more of a shopping day rather
than the day after," Mr. Maloney said, noting that the shift is
driven by consumers' demand for early deals. "The object of all of
us is keeping someone in the store as long as we can."
Some chains still buck the trend. Nordstrom Inc. and Barnes
& Noble Inc. plan to stay closed on Thanksgiving. Videogame
chain GameStop Inc. said it would keep all of its 4,000 U.S. stores
closed on Thursday, even in malls that have ordered stores to
open.
GameStop spokesman Joey Mooring said the company contacted mall
owners like General Growth Properties Inc. and Simon Property Group
Inc. around September and October to warn them of its decision.
"GameStop has not received any fines from our mall-owner
partners," he said. "We work closely throughout the year to offset
times like this. Meaning, throughout the year we receive requests
from our mall-owners to either open our mall-based stores early or
keep them open later due to special occasions."
Simon said it works with its malls' retailers to determine
whether to open on Thanksgiving. "If the decision is made to open,
retailer participation is totally voluntary and no one is fined if
they choose not to open," said Simon spokesman Les Morris.
General Growth declined to comment.
Some stores are exempt thanks to specific carve-outs in their
lease agreements. Fast-food chain Chick-fil-A said it hasn't faced
any pushback from landlords because its contracts stipulate that
restaurants will stay closed on Sunday and major holidays,
including Thanksgiving, from the outset.
"It's a very important part of the bargain we strike every
time," Chick-fil-A executive John Featherston said.
Other chains aren't so lucky. Most lease agreements require
their tenants to be open during "mall hours," which the property
manager can define during the course of the year. When tenants
signed leases four or five years ago, some understood that to
include Black Friday, not Thanksgiving.
Even if they get around the fines, small stores that don't have
as much leverage in lease negotiations can suffer less favorable
terms the next time their lease comes up for renewal, according to
a former Simon executive who asked not to be named.
The push for early Thanksgiving hours is simple: A half-closed
mall won't bring in as much foot traffic or business to the stores
that remain open. "No one benefits by that, except for the
employees," the former Simon executive said.
Write to Drew FitzGerald at andrew.fitzgerald@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 24, 2015 20:36 ET (01:36 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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