In August, when the operator of 630 Pottery Barn and Williams-Sonoma stores announced an 80% increase in its planned store closures to 16 from nine, chairman and CEO Howard Lester told analysts that of its "half-dozen-or-so" major landlords one-third to one-half of them that "are more willing than the others to work with the company to try to find creative solutions that will work for both of us, both in the short term and the long term. The others are more difficult and haven't been willing to get to that point yet. So we are somewhat encouraged with one-third to one half of our major landlords but still disappointed with the other half."

Last week, Lester continued to describe as "slow" its work with landlords "on opportunities to close stores that have become marginal." However, company CFO/COO/EVP Sharon McCollam added that the company is gaining leverage in negotiations thanks to a flood of near-term lease expirations and the failure of co-tenants, which can trigger clauses in co-tenancy agreements allowing other tenants to renegotiate or even reject their leases.

"…between now and 2012 one quarter of all our store leases are coming up for renewal and every time that happens it is an opportunity to renegotiate. We also are finding an increasing number of opportunities on the co-tenancy side and we believe in 2010 even more of those will actually occur because a lot of the store closings that have been announced by retailers over the last 12 months actually have not closed. They are not closing until the end of this year, so when you get into GLA co-tenancy failures, and even some named co-tenancy failures, those are going to surface in 2010 as well, so there is going to be another bite at the apple in 2010."