The owner of the Janesville Mall said he wasn’t surprised to learn Thursday the Sears store is closing, and he’s optimistic the store’s departure could pave the way for a more vibrant retail use.
In a phone interview with The Gazette, RockStep Capital President Andy Weiner confirmed the two-floor Sears department store and the standalone Sears automotive center north of the mall likely will close sometime in early February.
Texas-based RockStep, a shopping mall owner and management firm, owns the Janesville Mall, 2500 Milton Ave.
Sears Holdings, the parent of Sears stores, did not return calls from The Gazette on Thursday.
The Sears closure would leave another anchor store vacant at the Janesville Mall. In 2014, it lost JC Penney, and earlier this year the mall went through the shuttering of Boston Store after parent company Bon-Ton Stores filed for bankruptcy.
JC Penney and Boston Store rented space at the mall, but Sears owns and operates both the department store building and the auto center building.
Weiner said he was “saddened” but “not surprised” Sears, a former American retail behemoth now moving through Chapter 11 bankruptcy, would shutter its Janesville stores.
Weiner said he was “100 percent” certain the Sears stores would be closing even as his company was working to buy the mall earlier this year.
He said RockStep’s strategy of reviving and redeveloping the mall always has hinged on Sears’ departure as a given, not a mere possibility.
“While it’s unfortunate to see such a major retailer leave the market, we had expected they would close sometime in 2018,” Weiner said. “The only surprise is that it wasn’t sooner.”
Weiner said RockStep is examining “all options” on what might happen with the two Sears properties. But he said because Sears, not the mall, owns the stores and because Sears is working through bankruptcy in the courts, it’s not clear who might acquire the local Sears property.
Weiner believes the Sears department store at the mall has “strong” exposure to traffic on the Milton Avenue shopping corridor, and he said its size and setup give it bright prospects for retail re-use.
He said the Sears department store “hasn’t done much in the way of business,” and hasn’t drawn foot traffic to the mall for some time. If the Sears properties are freed up for redevelopment through sale or acquisition, the mall might see brighter prospects, Weiner said.
“We’ve always known the redevelopment and the reusability of the mall takes a big step forward as this Sears building transitions,” Weiner said.
Gale Price, city economic development director, said he learned of Sears’ planned closure Thursday morning after the city got an email from Avis, a car rental company that operates out of the Janesville Sears auto center.
He said an Avis employee was asking the city for leads on a location where it could move its Janesville operations. The employee cited the reason for the inquiry as Sears was being slated to shutter its Janesville stores.
Price said a Sears employee told him Sears broke the news to workers at the Janesville store Thursday morning. Price said he learned of the closures about 11 a.m. Thursday.
It wasn’t immediately clear how many employees will be affected by the apparent closure or whether Sears would hold liquidation sales at the mall.
Price said he believes Sears might be motivated to sell or hand off the two Janesville stores to generate cash. He expected to be in touch with RockStep officials to learn how the city might assist the owner with a pending vacancy that would leave the mall’s anchor store space more than half empty.
RockStep bought the Janesville mall earlier this year for $18 million—a deep discount compared to the $33 million the former owner CBL & Associates property paid for the mall in 1998. Prior to the mall’s sale, CBL had pumped millions into renovations of the mall’s concourse and new store lighting. It lured Dick’s and Ulta Beauty only months after JC Penney closed.
Dick’s Sporting Goods and Kohl’s, which will be the two remaining anchor retailers at the Janesville Mall, are both performing “great,” Weiner said.
During a presentation to Janesville-area stakeholders and city officials this spring, Weiner was optimistic about the mall’s future for retail use, although he said it’s likely RockStep would have to groom some large-scale empty retail space for uses other than department stores.
Thursday, Weiner said he thinks it could take “18 to 36 months” for the Sears properties to be repositioned for some reuse. He said RockStep already is working on prospects for reuse of about 100,000 square feet of the vacant Boston Store, and it’s in talks over potential reuse for the portion of the former JC Penney store that remains vacant.
Both of those stores dominate the east side of the mall, which is removed from the main traffic flow on Milton Avenue.
Weiner said it’s unlikely the former Boston Store and the former JC Penney space will draw future retail use. He wouldn’t disclose any specific prospects RockStep is eyeing, but he said some possible uses include entertainment and office use.