Seeking life after Caldor

Shops: Small businesses that had large Caldor stores as neighbors are struggling to replace the lost overflow traffic.

May 23, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

At the Dollar Outlet in Catonsville Plaza, Joyce Branch has taped helium balloons to a corner of her plate-glass window for a reason. That way, the shop owner can gaze at the festive display -- and block the view of a vast, empty parking lot that separates her small store from a vacant Caldor.

Branch once had a more pleasant view. Six months ago she and her husband, George, opened the shop in the plaza on U.S. 40, sharing a small strip with a dry cleaner, a drug store, a rental center and a wig shop. Branch would watch Caldor shoppers drift across the parking lot into her store in search of even greater bargains -- toys, vases and candles for $1.

But in January, Caldor Corp. announced that it would shut down for good by spring, closing its 145 discount stores throughout the Northeast -- including eight in the Baltimore area. Two others in the area had closed last year.

Caldor's demise left more than large holes in malls or shopping centers around the Baltimore Beltway. It also left dozens of small merchants uncertain about their survival, and landlords scrambling to compete for tenants to avoid lengthy vacancies, which can spell disaster for shopping centers.

"We pretty much feed off the overflow from the larger stores," George Branch said. "I don't think there's a whole lot I can do other than make the store appealing. I will survive, but I am concerned about the profit margins. I'm concerned I'm not going to be where I should be."

For now, the Branches plan to try pulling customers from a large church down the street by leaving fliers on cars.

Norwalk, Conn.-based Caldor had operated under U.S. Bankruptcy Court protection since 1995 and, analysts believe, it finally lost the struggle against larger discount rivals, especially Wal-Mart Stores Inc.

The company, which had $2.5 billion in sales and 20,000 employees, said it had tried to return to profitability by cutting costs and closing stores -- including one at Cranberry Mall in Westminster and another at Golden Ring Mall in Rosedale last year -- but failed to meet goals.

Soon the going-out-of-business sales started. Consumers found deals on socks, towels and blenders. Large retailers went shopping for leases. Kohl's, Kmart Corp., Wal-Mart, Target, Home Depot Inc., Federated Department Stores, Ames Department Stores Inc. and Bradlees acquired about 75 stores plus a Massachusetts distribution center.

But many of those retailers have bypassed Baltimore-area sites, either because they have stores nearby or because they found the asking price too high, brokers said.

The Baltimore-area Caldors occupied a range of locations, from older space that once housed retailers such as Stewart & Co. or E. J. Korvettes to newer buildings put up or renovated as part of Caldor's entrance into the Baltimore market in the 1980s.

"Those stores generated a lot of customer traffic through the centers," said Tom Maddux, a principal with Towson-based commercial real estate brokerage KLNB Inc. "Any shopping center that doesn't have an anchor is at risk, just by virtue of a diminished amount of traffic."

But long term, he said, "after the bankruptcy is resolved, this will be a positive thing -- because of the scarcity of zoned land and the availability of real estate."

Two tenants step in

So far, only two tenants have stepped in to commit to Baltimore-area Caldor leases. Kohl's, a specialty department store selling moderately priced apparel, shoes and home products, acquired the Caldor lease at Severna Park Mall in Anne Arundel County as part of a 32-store package of Caldors in metropolitan New York. And a redevelopment of Chatham Mall in Ellicott City will bring in Home Depot.

Caldor, which got its start as a discount house in 1951 in Port Chester, N.Y., also had stores at Reisterstown Road Plaza in Baltimore County, Parkway Crossing on Perring Parkway, Anneslie Shopping Center in Towson, Lutherville Station in Timonium, Catonsville Plaza on U.S. 40 and Cromwell Field Shopping Center in Glen Burnie.

Caldor is still attempting to sell leases for three of those locations -- Reisterstown Road, Anneslie and Lutherville. The company rejected the other three this month because they had rents above market value and would be too difficult to sell. That placed leases back under the control of landlords for centers in Catonsville, Glen Burnie and Perring Parkway.

"It's good that landlords have gotten these back, because they can make the rents more attractive," said Susan Anderson, a vice president of H&R Retail in the Baltimore-Washington market. "The landlord now controls the property and can have more flexibility. They can divide them or do creative rent deals or change the use."

Landlords for those centers said they hope to land deals with retailers soon.

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