ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Sunday, January 5, 1997 TAG: 9701070010
SECTION: BUSINESS PAGE: 3 EDITION: METRO
TYPE: ECONOMIC FORECAST
SOURCE: MEGAN SCHNABEL STAFF WRITER
After two years of watching sales go up and down, retailers should be prepared for yet another roller coaster ride in 1997.
"The direction of this economy is not clear," said Kenneth Gassman, a retail analyst with Davenport & Co. of Virginia in Richmond. This should be a better year than 1996, he said, but if the recently ended Christmas season - which started with strong sales, then sagged, then strengthened again, and then drooped - is any indication, 1997 won't be dull.
Expect to see more polarization in the marketplace, Gassman said, with more discounters and upper-end retailers and fewer middle-of-the-road merchants. Sales of upscale goods - clothing, housewares - will be especially strong, he said.
Despite the continuing uncertainty, many Roanoke-area merchants are upbeat, said Louise Dudley, manager of Valley View Mall in Roanoke.
"The department stores and the small tenants are all enjoying healthy sales increases," she said. With an occupancy rate of 95 percent, the mall is as full as it's been in years. And there's a good chance it could be 98 percent occupied by the end of the year, she said.
After the reshuffling of tenants that accompanied the mall's 10th anniversary last year - which marked the end of many initial leases for some merchants - the tenant mix should remain fairly stable this year, she said. Several merchants will renovate their stores, and one or two whose leases have expired will close.
The opening of the new Amerisuites hotel near Valley View, scheduled for next month, should bring additional business to the mall as well, she said.
Tanglewood Mall, at the other end of town, also anticipates a more stable year, said mall manager Judy Tullius. The mall's interior renovations are almost complete, so jackhammers and scaffolding should be a thing of the past. Tullius said the peace and quiet - and the mall's bright new interior - should bring back shoppers who may have been driven away by the construction.
Several temporary tenants, brought in for the Christmas season, will move out, leaving a few noticeable gaps. But the mall is negotiating with several retailers who are interested in moving into the former Brendle's space, vacated when the catalog merchant closed early last year, she said. Depending on who leases the space, construction could start as early as next month.
Changes also may be ahead for Leggett department stores, purchased late last year by sister retailer Belk. The new Charlotte, N.C.-based owner, which has decades-long ties to Leggett, has not announced whether it will make any changes to the Leggett stores. Belk's strong reputation, however, makes a name change possible. Expect to see Southwest Virginia Leggett stores continue to remodel and expand their stock of higher-end clothing.
Best Products Co. Inc. also announced its closing in 1996 after filing for bankruptcy for the second time in five years. While the building, which is close to the airport and Interstate 581, is prime property and likely will be leased or sold, Gassman predicted that no new retailer will emerge to take Best's place in the marketplace. Existing merchants - particularly jewelry stores and discounters - will merely absorb the business left by Best's departure, he said.
"Best will disappear with little more than a whisper," he said. "This is Darwin's theory of evolution at work in the retail industry."
Also a victim of the survival-of-the-fittest theory is Hanover Direct Inc., the direct-mail retailer that in December said it would scale back its operations in the Roanoke Valley. While some of the problems leading to the cuts were unique to Hanover, the company also was a victim of rising paper and postage costs and changing consumer habits.
"The whole catalog industry has gone through some tough times," Gassman said. Expect to see further consolidation and some small catalogs going out of business. Several private catalog merchants already have tried to sell their names and mailing lists and get out of the business, he said.
LENGTH: Medium: 72 linesby CNB