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Retailers look at Bradlees
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December 27, 2000: 2:00 p.m. ET
Discount chains seen battling for bankrupt chain's valuable Northeast property
By Staff Writer John Chartier
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NEW YORK (CNNfn) - A few of the nation's largest retailers are clamoring for a piece of Bradlees now that the discount chain has filed for bankruptcy.
Kohl's (KSS: Research, Estimates), Target (TGT: Research, Estimates), and Wal-Mart Stores (WMT: Research, Estimates) are all likely bidders for Bradlees' 105 stores scattered throughout the Northeast, where prime commercial space is often hard to come by and extremely pricey, analysts said.
Obtaining Braintree, Mass.-based Bradlees' stores would give discount retailers a strong foothold in high customer traffic areas -- a competitive edge, particularly during an economic slowdown  .
That slowdown -- coupled with rising interest rates and higher energy prices that left consumers with less spending cash -- was blamed Tuesday by Bradlees when it announced its filing for protection under Chapter 11 of the U.S. Bankruptcy Code.
The company also said new competition, unseasonable weather in the first half of the year, and the tightening of trade credit contributed to its inability to operate profitably.
Stores will stay open for eight more weeks as the remaining inventory is sold to Gordon Brothers Retail Partners LLC.
Demand for retail space is strong in all of the states in which Bradlees operates -- including Massachusetts, Connecticut, New Hampshire, Maine, New York, New Jersey and Pennsylvania. The Boston area offers the tightest market, with commercial vacancy rates of just 4.4 percent, according to the National Association of Realtors.
Roche said Boston's emergence as a high-tech center with new jobs being created is a magnet for chain retailers, which are flocking to the city to serve its booming population.
Kohl's seen as likely contender
Kohl's (KSS: Research, Estimates) would be the most natural fit, since the Menomonee Falls, Wis.-based chain often looks for stores under 100,000 square feet, and many of Bradlees' stores are 60,000 square feet, Eric Beder, an analyst with Ladenburg Thalmann & Co., said.
"The store sizes are complementary. The Northeast has been a huge success for the company, and this is the last opportunity to enter the region in a big manner in one fell swoop," Beder said.
And Kohl's has been the more aggressive of the discount retailers in terms of opening up new stores, said Linda Kristiansen, retail analyst with UBS Warburg.
"I think they have reasonably good locations in the Northeast. There'll be a bidding process, but it just seems like a good fit," Kristiansen said. "They've been more aggressive than some of the others in the region."
In January, 1999, for instance, Kohl's snapped up the leases on 32 of Caldor's stores, which decided to close all 145 of its stores after filing for bankruptcy.
Doing so has been extremely successful for the company, which now has a strong foothold in the Northeast market, Beder said.
A Kohl's spokeswoman declined comment on whether the company was even interested in the empty Bradlees stores.
But Target (TGT: Research, Estimates) and Wal-Mart (WMT: Research, Estimates) might also be interested in the few 100,000 square-foot stores Bradlees owns, namely in Yonkers, N.Y., and Norwalk, Conn., Beder said.
Both Wal-Mart and Target declined comment on whether they were interested in the stores.
Beder said an announcement from the retailers is likely within the next six to eight weeks. 
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Target
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Kohl's
Bradlees
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