March 10, 2016
Connect Media spoke with DJM Capital Partners’ Stenn Parton, a retail development pro, to hear if developers’ heads are “in the cloud or in the dirt” these days. Parton is a panelist at Connect Retail West on March 16th at the Conga Room at LA Live.
1 – Why are we seeing so many retailers closing, and how should lenders adjust to those shifts?
Sales per square foot trumps credit. Rather than focusing on the credit of a rent roll, we think lenders will need to adjust to put more weight on sales performance and occupancy cost of the retailers. We believe that retailers that have had a plug-and-play mentality have had the greatest struggles in today’s retail environment, and the retailers that have kept their hand on the pulse of the local community where their stores reside are showing the greatest promise for the future of the business.
2 – What interesting things are you seeing in the retail sector to either embrace e-commerce or to meet its challenge?
A local focus. We think restaurants have been a leading driver in this movement of connecting to the local community through where they are sourcing their food and the seasonality of the menu. We think retailers today are seeing the importance of creating unique stores for each location — building something that feels bespoke and authentic to the local community. We’ve seen that this leads to a more natural interaction between brands and customers through social media in which the customer becomes the most influential salesforce for the brand, and helps drive both in-store and e-commerce sales.
3 – What’s ahead in 2016 for the retail sector in SoCal?
Creativity is king. In today’s retail sector, customers are smarter and better informed than ever. We think 2016 will showcase collaboration between food, fashion, the arts and music. Developers will have to look outside of conventional “consultants” to attract talent that can help create authentic installations, partnerships and activities that today’s customer is in search of.