Tuesday, September 25, 2007

News to us, but a great idea

Traffic Court led me to learn about a retailer called Peebles. These guys have over 600 stores in 33 states and yet I've never heard of them. Why? Probably because I live in an area large enough to be off their radar screen.

The m.o. of this company looks deceptively simple: provide upscale brands in small markets that you'd otherwise have to travel a long way to get to. This is sheer genius for several reasons. As David Bodamer said, with 20,000 sf stores (and by focusing on name brands) they do not compete with Wal-Mart. From a business perspective, they are going to pay DIRT cheap rent on their spaces because, based on a quick look at their website, they are going to markets that are not exactly what one might compare to New York, Chicago, SF or LA. And that is the beauty of it.

The business side is obvious. But what also makes this company attractive to me (granted, I know nothing about its financials or anything like that -- I'm no Jim Cramer) is the legal side of it. By working in smaller markets, perhaps by leasing vacated anchor tenant spaces in small malls or by taking other 20,000 sf vacant spaces, and as a national retailer in a tenant market, you probably also have a much bigger chunk of leverage on the legal side of the deal than you would in an ordinary retail lease (even a big box lease) in a major market. Why can't I think of these things?

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