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Carson's closures may be more challenging for hard-hit malls



When Carson's stores ring up their final sales – they'll leave behind a 164-year history as one of Illinois' iconic homegrown department store chains. They want to leave their landlords with millions of square feet of empty retail space to fill.

Parent company Bon Sound Stores filed for bankruptcy protection earlier this year. A bankruptcy judge on Wednesday approved the sale of the company's assets, including Carson's and other department store chains, to a joint venture of two liquidation firms and a group of corporate bondholders.

Going out of business started Friday and will last about 10 to 12 weeks. Carson's wants to vacate when he's finally looking for a deal to get his discounted sweaters and slacks.

In Illinois alone, the liquidation of Bon-Tone ̵

1; which, in addition to Carson's, owns the Bergner's chain – could leave nearly 40 stores covering 4.3 million square feet. All this vacant retail space joins the 31 Illinois stores Toys R Us started closing last month – another 1.3 million square feet.

Evergreen Park Mayor James Sexton said he was disappointed with the Carson's, which had been at Evergreen Plaza since 1964 and what "a great name in the region."

All the ladies love Carson's at Evergreen, "he said.

Still, Sexton said he's optimistic they'll be back. he said.

"The others stand as their own as great retail," Sexton said. "I think we'll fill it in and move on."

The overall retail vacancy rate in the Chicago metro area has steadily declined since the clos Dominick's in 2013, and at 6 percent, it is below the area's historical average, according to CoStar.

But the stores have been closed nationwide – 32 million square feet so far this year, on top of 100 million last year, according to CoStar.

Carson's to close after parent company fails to find buyer »

Liquidation sales at Bon-Ton stores »

Sears Holdings Corp. shut down 303 Kmart and 123 Sears stores over the course of 2017, and more have followed . Sears recently announced its store in Chicago – at the Six Corners shopping district on the edge of the Portage Park neighborhood – will close this summer.

Meanwhile, J.C. Penney announced 138 closures last year, and Macy's is working its way to 100. Since the start of this year, Sam's Club has announced 63 store closures, and Bon-Ton announced 42 shortly before filing for bankruptcy protection in February.

CoStar studied 185 department stores that closed in 2016 and found that only 40 percent of the space secured a new tenant in the following year, Mulvee said. About 30 percent managed to find a similar department store, or a Dick's Sporting Goods, but 10 percent settled for a lower-quality retailer, she said.

Not all properties are created equal. Carson's at Riverside Plaza near Chicago's Union Station, said Gregory Kirsch, Newmark Knight Frank's executive managing director at commercial real estate firm.

These stores are often split into Small spaces that can draw fast-casual or full-service restaurants, Kirsch said. Grocery stores have been filling some larger stores, according to CoStar, and expanding retailers could snap some up too. For example, a bankruptcy judge last week approved the sale of a Vernon Hills Toys R to the company behind PGA Tour Superstores.

Suburban malls pose a much bigger challenge, Cherry said.

At Oakbrook Center, mall owner GGP broke up a former Kidzania, which is expected to open in 2019, is now open to the public.

"If the foundation of the mall is good, I imagine (the owner) would be happy to get rid of lower-performing anchors," Cherry said. 19659002] That's not the case for weaker r egional malls, which still have a great deal of experience in the future, do not have much to do with this.

, "Said Kirsch," who thinks most will eventually be redeveloped with much less – if any – retail. "

To CoStar's Mulvee, it's a painful – but" eventually cathartic "- correction in a market that just has too much retail space. Retail should not be struggling with a low unemployment, she said. "Every one of these closing announcements is helping the market heal," Mulvee said.

lzumbach@chicagotribune.com

Twitter @laurenzumbach


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