What does it take to lure national chains?FARGO, N.D. - It’s a common refrain from area shoppers and diners: “Why can’t we get that here?”
By: Sherri Richards, Prairie Business Magazine
FARGO, N.D. - It’s a common refrain from area shoppers and diners: “Why can’t we get that here?”
Fargo has a long wish list for national chains. Whenever West Acres Shopping Center solicits suggestions for stores, top responses include clothiers H&M and J. Crew, an Apple store and foodie havens Trader Joe’s and Whole Foods, said Alissa Adams, the mall’s marketing director.
Fashionable home stores Pottery Barn, Crate and Barrel and Williams-Sonoma are often mentioned to Jim Buus, managing broker and part owner of Goldman Schlossman Commercial Real Estate Services.
Buus regularly reaches out to companies like these to see if they’d consider coming to Fargo. He said there’s two common themes he hears when the answer is “no” or “not now.”
The first: logistics.
“You have to supply the store or restaurant with food or merchandise or product,” he said. “Logistics boils down to distribution.”
Places that use or sell fresh products, like produce, especially need to be able to get it here quickly. That’s why chains typically cluster in a region, close to a distribution center.
The other hurdle Buus hears is population. He said he called a national retailer last week that required a market size of 750,000 people. Fargo-Moorhead’s metro population is about 216,000, according to Census data.
Beyond the sheer number of people, some retailers look at the demographics such as income and age.
Adams, with West Acres, said stores may have specific requirements, such as a minimum number of households with an income more than $100,000 within so many miles.
Jim Gilmour, planning director for the city of Fargo, said the college population here appeals to some retailers. He said Fargo has more restaurants because of its younger demographic and smaller household size.
Of course, each company’s overall plans play a crucial role.
“Certain companies are in expansion mode and others … put the brakes on when the recession hit,” Gilmour said.
Another factor is the tenant mix. Stores want to be clustered with similar businesses, Buus said. “They don’t want to come and be all alone,” he said, creating a chicken-and-egg conundrum.
Buus pointed to Westgate Commons in West Fargo, where a HomeGoods and Marshalls are slated to open May 1 and rue21 recently opened. The three were able to come at roughly the same time and cluster in the same building, creating an appealing destination for shoppers and efficiency for HomeGoods and Marshalls, which have the same parent company.
Forum News Service reached out to West Acres’ most-requested stores. Media representatives for J. Crew, H&M and Whole Foods did not return messages seeking comment.
Michaela Wilkinson with Apple said the company doesn’t announce new stores in advance (“We’ve made no announcements around a store in that location,” she said about Fargo), and wouldn’t discuss how sites are chosen.
Trader Joe’s press contact Alison Mochizuki said Fargo is not in the store’s two-year plan at this time.
“And we actually don’t disclose what goes into the decision-making process in selecting a location,” she added.
Adams said the leasing process is long-term and evolving. While some do come together quickly and unexpectedly, others can take a decade to come to fruition, she said.
A bit of good news: Buus said in recent years, companies he’s contacted have been more aware and receptive of Fargo. They’re aware of North Dakota’s economic strengths and say they’ll “get there eventually.”
“It’s not as hard as it was 10 years ago,” he said.
Readers can reach Richards at (701) 241-5556.
Tags: economic development, national chains, trader joes, west acres, pottery barn, crate and barrel, williams-sonoma, real estate, j. crew, apple store, whole foods, westgate commons, business, updates, shoppers, diners, fargo, mall, moorhead