April Showers Bring...Bad News for Retail Investors

LOS ANGELES-April showers might indeed bring May flowers, but the first two weeks of April also rained down bad news on retail-property investors from the East Coast to the West. That’s because several big department-store chains reported sluggish sales late last week, and several more are expected to report disappointing figures over the next few days.

Industry stalwarts Wal-mart Stores Inc. and Sears, Roebuck & Co. are among retailers who have warned Wall Street analysts over the past few days that their first-quarter earnings won’t meet expectations. Their announcements come as the Commerce Department says overall retail sales in March dipped 0.2% from February, which itself was a lackluster month.

Retail sales trends are important to retail-property owners for several reasons, including the fact that rent paid by a tenant is often partially based on its gross sales. A good sales month can put extra cash in the property owner’s coffers, but a poor one sinks right down to the owner’s bottom line.