Over the past year, Bed Bath & Beyond has been steadily closing stores, with more than 400 locations now set to shut down, which is almost half of the estimated 955 stores that were open around the same time last year. The company is reducing its retail footprint as part of its "store fleet optimization program" to reduce costs and stave off bankruptcy.
However, the emptying real estate created by the closures of Bed Bath & Beyond stores is likely to act as a major resource for other retailers looking for more retail space. Brandon Isner, the retail research head at the commercial real estate firm CBRE, explained that there hasn't been much new retail development since 2008, and availability is scarce due to low vacancy rates.
T.J. Maxx and Ross have already taken advantage of the situation by relocating to some of the former Bed Bath & Beyond locations. T.J. Maxx is relocating its store in Watertown, New York, to an already closed Bed Bath & Beyond location in the city, while Ross is opening one of its first stores in Michigan this summer, taking over a space that was formerly occupied by Bed Bath & Beyond. Other discount chains, such as HomeGoods and Burlington, are also reportedly in talks with Federal Realty to move into the closed stores.
For Burlington, adding locations that once belonged to a struggling brand fits with its past expansion efforts. "So many of our most productive locations were formerly Circuit City or Toys 'R' Us or Sports Authority," said CEO Michael O'Sullivan on an analyst call in February.
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