Until recently, Ames, among the nation's largest regional, full-line discount retailers, boasted more than 400 stores in the Northeast, Mid-Atlantic and Mid-West, employed 35,000 people and brought in annual sales of approximately $4 billion. The bottom started falling out in November, when Ames announced plans to close 32 stores, including 31 of the stores it acquired from Hills Stores Co. in December 1998.
Last week, Ames stumbled again, announcing that it had filed for Chapter 11 protection and that it would shutter 47 stores. Included in the latest round of closings, which is expected to be completed by October, seven stores--five in Ohio, one in Virginia and one in Pennsylvania--are leased from Kimco. Total space is roughly 700,000 sf.
According to information available on the Kimco Web site, of the 10 Ohio-based Ames Plaza shopping centers owned by Kimco, already-vacant Ames anchor stores include a 103,500-sf space in Kent; 108,596-sf in Akron; 99,862 sf in North Olmstead and 104,340 sf at the Ames Plaza in Middleburg.
Another 99,727-sf Ames store listed as vacant is at the Meadowbrook Square center in Bedford, OH. A Chicago-based Kimco property, the 87th St. Center, continues to list Ames as a tenant but the Kimco site map shows the only two spaces large enough to house an Ames location as occupied by a Goldblatt's department store and a Jewel supermarket.
Combining the upcoming closings reported by Ames with the vacant Ames stores listed on Kimco's Web site, the total damage to the Long Island-based REIT is roughly 1.2 million sf of vacant or soon-to-be empty space.
Another local REIT, Acadia Realty Trust, Port Washington, appears to have been merely grazed in the Ames debacle. Acadia has 10 Ames stores in its massive shopping center stable, totaling 800,000 sf of retail space. So far, however, only the 94,000-sf store at the Union Plaza mall in New Castle, PA has shown up on Ames' hit list. In addition, the 97,000-sf Ames store at Acadia's Valmont Shopping Center in Hazleton, PA, shut its doors but continues to pay rent. However, that lease is not expected to be included in the bankruptcy proceedings.
Meanwhile, Kimco Funding LLC, an affiliate of New Hyde Park-based Kimco Realty Corp., and GE Capital, Stamford, have provided the hobbled shopping center giant with $755 million in Debtor in Possession credit financing. GE Capital, a wholly owned subsidiary of General Electric Co., put up $700 million. The remaining $55 million was supplied by Kimco. A hearing on the final approval of the financing is set for September 17. Upon approval, the cash will pay for Ames' ongoing operations and for payment of post-petition receipt of merchandise.
The fate of the remaining Ames stores with Kimco or Acadia leases is undecided and so far, it's business as usual. No notification from Ames regarding the stores is forthcoming.
Kimco is the country's largest publicly traded shopping center owner with almost 500 properties in 41 states, comprising approximately 66 million sf of space. The 35-year-old REIT recently announced that it had paid $98.2 million for five new centers totaling more than 800,000 sf of space. It is not known whether Ames occupies space at any of the properties, or a sixth center currently under contract.
Acadia is a self-administered REIT that specializes in shopping centers. The company currently owns and operates 56 properties totaling approximately 10 million sf, primarily in the eastern half of the United States.
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