adidas football kit but retail closures are largely bypassing East Valley

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While much of the country is dealing with the fallout of closures by major retail chains, the East Valley is experiencing largely positive trends in the sector.

But the region is not totally isolated from the closures as Walmart announced two weeks ago that it will shutter a Sam’s Club location in Chandler.

Commercial real estate firm Cushman Wakefield predicted that more than 12,000 stores could close nationwide in 2018 due to bankruptcies and store closings by chains like Sears, Stein Mart, Walgreens, Gap and Gymboree, according to a report from Business Insider.

Those national closures reached Chandler when Walmart announced it was closing one of its two Sam’s Club locations in the city.

On Jan. 11, Walmart issued a press release announcing that it would be closing 63 Sam’s Club stores across the country, including the location at 1375 S. Arizona Ave. in Chandler. The Chandler Sam’s Club will close to the public by Friday, Jan. 26.

Walmart has plans to convert up to 12 of the affected locations to eCommerce fulfillment centers, though it is unclear whether the Chandler location is included in those plans.

“We are in the process of identifying other locations to convert to an eCommerce fulfillment center and will have more clarity on locations in the coming weeks and months,” said Laura Ladd Poff, Walmart senior manager of corporate communications, via email.

The announcement came on the same day that Walmart heralded the recent tax reform bill passed by Congress and signed by the president and announced plans to increase wages, expand maternal and parental leave benefits and issue bonuses to some employees.

Despite the Walmart announcement, the national closures should have a limited affect on the East Valley as major retailers already closed locations in the area during and immediately after the Great Recession, said Brad Douglass, associate vice president at Cushman Wakefield’s Phoenix office.

“I don’t think the East Valley is going to experience a lot of closings,
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because a lot of that has already happened,” he said.

Douglass said that, overall, retailers in the East Valley have performed well over the last several years and the sector performed well over the holiday season.

Much of this success has been driven by non traditional uses in retail spaces. Medical users like doctors, dentists, orthodontists and urgent cares are increasingly interested in moving into retail space and have picked up the slack for companies that left throughout the recession.

The food and beverage industry is also driving retail growth as Phoenix area restaurateurs move east in search of alternatives to the crowded central Phoenix marketplace.

“A big focus that I think is playing out in the East Valley is a lot of the hip and local flavor restaurants are becoming over saturated in Arcadia and Central Phoenix and are now realizing there are lots of opportunities in downtown Gilbert, Queen Creek, downtown Chandler, south Tempe and east Mesa,” Douglass said.

He added, “I think that will grow as others see the success of those pioneers who have made those (inroads).”

He also expects developers and retailers to keep their eyes on emerging markets like downtown Chandler and Gilbert near the Agritopia development at Ray Road and the Loop 202 freeway.

“Downtown Chandler is a new one to watch,” Douglass said. “A lot of people in Chandler were envious of what downtown Gilbert did a number of years back, and I think the City of Chandler has done a lot to revitalize and redevelop (the area) with its own little revitalization of downtown.”

He pointed to the $25 million Overstreet development which will feature a Flix Brewhouse microbrewery and movie theater as an example of growth in the area.

In Gilbert, the fate of the Epicenter project which will function as a commercial hub for the Agritopia residential community could influence similar development throughout the East Valley.

“It will be interesting to watch once (Epicenter) breaks ground,” Douglass said. “It could lead to other mini urban cores in the Southeast Valley.”

Despite the influx of positive indicators, pockets in the East Valley are still struggling to attract retail users.

“Ever since the recession, parts of mesa and really particularly north Mesa and downtown Mesa and the surrounding area has seemed to struggle with the aging centers that are in need of redevelopment,” Douglass said.

He added that there is certainly an opportunity for redevelopment there but the area will likely need the introduction of a large employer or higher education user to spur new development.
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