Based in Eugene, Ore., the 34-store Troutman's Emporium chain in December made the bankruptcy filing, seeking protection from creditors while it reorganized to get back on its feet by next year. It has since given up on that effort and asked a bankruptcy court to let it auction its leaseholds and begin liquidation sales. The asset liquidation and auction is being handled by three firms: SB Capital Group of Great Neck, NY; Boston-based Tiger Capital Group; and Buxbaum Group of Calabasas, CA.
C.E. John Co. owns the Cedar Hills Shopping Center in Beaverton, Ore. and Lancaster Mall in Salem, Ore., both of which have well-located Emporium stores. Mark Perniconi, vice president of development for CE John Co., tells GlobeSt.com the likely outcome is someone will buy all the leases, either to re-trade or sublease.
"We just went through this with Ward's, where a national developer (Kimco) effectively got control of leases and fee interests and then you had to deal with them," says Perniconi. "We think something will happen quickly."
Craig Sweitzer, a longtime retail broker and partner in the Portland-based retail brokerage firm Urban Works Real Estate, doesn't expect too many landlords to be upset with the company's demise. "This is not necessarily a bad thing," he tells GlobeSt.com. "There are a lot of centers that would like to get rid of their Emporiums."
Indeed, Perniconi tells GlobeSt.com they've been privy to Emporium's sales and it isn't pretty. "We've seen their numbers," he says. "They've been dying for years."
Sweitzer says Emporium's location at Cedar Hills Shopping Center, the former Beaverton Mall, is a great spot, sticking out from the mall itself and facing heavily-traveled Cedar Hills Boulevard. "They will get rid of their weakest big-box tenant and have primary space available for a national retailer," says Sweitzer--a retailer who lease rate would be much higher than Emporium, which signed on many years ago.
Perniconi agrees, saying the attributes of the 42,000-sf space-- great visibility and the ability to be expanded or divided--make it eminently rentable. If C.E. John doesn't have control of the space, though, whoever does may have a hard time finding takers.
Perniconi says there may not be enough time left on the leases to attract national credit tenants looking for long-term deals. As well, there are significant restrictions on what can operate in the space if not an Emporium, he says.
About 60% of Emporium stores are located in Oregon. The rest of the stores are located in Washington, Idaho, California and Nevada.
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