TOPSHAM — While the third announcement in a month of a store closing at Topsham Fair Mall seems to paint a dismal picture of the retail center, it may also suggest a refocusing of the mall’s role in local retailing.
On the heels of news that Bed, Bath & Beyond would be moving from Topsham Fair Mall in October came announcements that both Best Buy and Maurices clothing will close their Topsham stores Oct. 29 and Sept. 24, respectively.
While those three large, national retailers are on their way out of the mall, three businesses with stores only in Maine, or Maine and New Hampshire, moved into the mall area two years ago: Smitty’s Cinema, Lamey-Wellehan shoes and Day’s Jewelers.
“What we’ve tried to do, by and large I think fairly successfully, is (to make) a conscious effort to try to provide a home for Maine-based or Maine-owned companies,” John Larson, a local owner of the mall, said in an interview Tuesday. According to Larson, more than 70 percent of businesses at the mall fall into that category, including Hannaford Bros., which has headquarters in Scarborough.
Some shopping center owners will tend to seek national or regional businesses, “what are classified in the industry as … ‘credit tenants,’” Larson said. Banks look at such businesses as “triple A tenants …,” Larson said, “and it just makes life easier financially. Theoretically, you never have to worry about getting the rent check on time.”
“There’s nothing wrong with that,” Larson said, although in a contest for a space between a national or regional company versus a local business, “oftentimes the local firm loses out because they don’t quite have the same – in the view of many people – credit-worthiness as some of these larger national firms.”
“We made a conscious attempt to try and reach out to local businesses,” he said.
That effort paid off with stores like Reny’s, whose Topsham Fair Mall location is the 67-year-old Maine business’s most successful, Larson said.
“I think people have a certain degree of loyalty … to names that they recognize as being local businesses,” he added.
But local does not always mean long-lasting, Larson admitted, noting the greater volatility and susceptibility of smaller businesses to competition from larger, well-established competitors.
The Jo-Ann Fabric store is one exception to the rule at the part of the mall containing approximately 20 stores that Larson owns – the original 1985 piece, close to U.S. Route 196. The Best Buy plaza came later, farther down Topsham Fair Mall Road.
“We’re extremely happy to have Jo-Ann’s here; it generates a huge amount of business,” Larson said, noting that most of the other businesses fall into the locally owned or locally managed category.
“Our philosophy is not driven by thinking consciously about the fact that these companies might survive longer; we just think that it’s a nice thing to do if we have the opportunity to do it,” he said.
Noting industry trends, Larson pointed out how Borders books folded when it could not compete with Amazon and other online retailers. Electronics has been another challenge to “bricks-and-mortar” retailers; Larson cited the decision to close many Radio Shack stores, including one at the mall.
“Circuit City … fell by the wayside a number of years ago, and Best Buy survived,” Larson said. “But they’re still fighting the battle in terms of being able to withstand the increasing erosion of sales by virtue of people buying stuff on the internet.”
“It’s a different world,” he added. “It’s very hard to compete.”
Maurices may also have run into trouble at the Mall because there were no neighboring stores like it. There’s a lack of fashion retail synergy at the plaza, Larson said, adding that the store “was trying to survive pretty much as an island unto itself, and that’s a very difficult thing to do.”
“If you find one, you’ll find more,” Larson noted, referring to a McDonald’s and Burger King often being close to each other, or Texaco and Exxon gas stations facing off on opposite corners. “Once you get one or two of those, then the parade begins.”
Larson said he has talked to several fashion merchants that are uncomfortable about moving to town because of Topsham’s lack of similar stores.
“How do you break that mold?” Larson asked. “It’s sort of a Catch-22. If you don’t have one, you can’t get more.”
Maurices is closing “as a function of another deal we’re working on at the center,” Derek Miller, associate broker with CBRE The Boulos Co., said in an interview Sept. 2. He said the store “had a few rent reductions over a few years, and simply (was not) paying the market rate.
“We have been in discussions with another tenant that needs that space” and is able to pay the rent, Miller said, noting the tenant would occupy both the Maurices location and the vacant space next to it, formerly occupied by a Payless shoe store.
A Maurices employee on Sunday confirmed the Sept. 24 closure, but said the company will continue to have Maine stores in Bangor, Waterville, Presque Isle, Augusta and Auburn.
Shattuck noted both Maurices and Best Buy have been closing retail stores. “They’re down 200 or 300 units just in the last two or three years,” he said of the latter operation.
“Best Buy finished its fiscal year (2015) with 1,416 U.S. stores; its U.S. store base reached a peak of 1,503 in fiscal year 2013,” according to the article to a February article on thestreet.com.
“This is kind of where retail is going,” John Shattuck, Topsham’s economic and community development director, said last week, adding that Best Buy reduced the size of the Topsham sales floor in recent years by moving up its back wall and increasing the stock area.
While the business’ high-volume products, which includes cellular phones and audio equipment, remained in the store, “the bulk of their product is available online,” Shattuck said. “… The business model has shifted so heavily towards internet sales, even for stores that are running a bricks-and-mortar operation.”
“The whole trend across retail has been – at least for the larger, commodity type, or consumer goods – to have less units, and smaller units,” he noted.
Once it shuts its Topsham store – which has been an anchor at 105 Topsham Fair Mall Road plaza – Best Buy will still have stores in South Portland, Augusta, Auburn and Bangor.
Along with sales, several factors went into the company’s decision not to renew its lease with CBRE The Boulos Co.: lease costs, changing customer shopping patterns, and the overall strength of retail centers, Best Buy spokesman Kevin Flanagan said last week.
Miller said his company assumed this spring that Best Buy would not renew its lease. Boulos quietly marketed the space this summer, and openly since early August, when Best Buy’s option to renew expired.
Boulos has “interest from numerous national retailers at this point,” Miller said.
Bed, Bath & Beyond, at 131 Topsham Fair Mall Road, will move to Brunswick’s Merrymeeting Plaza. Shattuck said last week that the mall “lost them to competition on lease rates.”
But he noted Maine is considered a regional market.
“When you have a retailer that makes a move but stays local,” he said, “that’s less of a blow than losing the retailer all together.”
The property broker for Maurices at the Topsham Fair Mall, due to close Sept. 24, is working on a deal to have a new tenant occupy both that space, as well as the neighboring empty storefront previously occupied by Payless shoes.