As Haggen exits, other businesses also suffer

Another company's misfortune has trimmed business at Posare Salon.

The beauty boutique at 1946 Village Center Circle, inside Summerlin's Trails Village Center, has seen walk-in traffic tumble as much as 75 percent since the closure of grocer Haggen next door, said owner Donna Catalfamo.

Regulars schedule appointments as often as ever, but Haggen shoppers who popped in for an impromptu appointment or to buy salon products have all but faded away.

"We've definitely been affected," Catalfamo said.

Catalfamo's story illustrates how the closure of an anchor tenant in a neighborhood shopping center ripples down to small companies nearby. And a number of smaller businesses are feeling that effect today: Three of Haggen's seven Southern Nevada stores — locations at 1940 Village Center Circle, 820 S. Rampart Blvd. and 1031 Nevada Highway in Boulder City — remain empty, with few suitors in sight.

It's routine for inline businesses — especially family-owned and locally based companies — to struggle when big neighbors fail.

That's because, as Catalfamo pointed out, walk-in foot traffic plummets.

"In a true retail center where the landlord takes time to pick and choose the tenant mix, everyone helps everyone," said Scot Marker, a senior vice president in the Las Vegas retail division of commercial brokerage Colliers International. "If a majority of your clients were coming from the main anchor, your business could suffer."

It's harmful for locally owned companies in particular because they don't have the brand recognition or marketing heft of a national retailer, Marker said.

Still, not everyone has a Haggen hangover.

Two doors down from Haggen's Boca Park store on Rampart, Petland's sales are up in recent weeks, said manager Arielle Bychinski. The shop sells puppies and enjoys a stream of shoppers from nearby stores including Target and sports-clothing retailer Tilly's.

"People's kids drag them in," Bychinski said.

It's also the holidays, which could help support pet sales, Bychinski added.

'Work in a different way'

But the manager of a clothing retailer near the shuttered Haggen said her company's foot traffic is down about 10 percent since the closure.

The manager, who declined to be identified, said the company has to "work in a different way," boosting sales per customer rather than spreading its business among more people.

Times are tougher at Posare, which has operated for nearly 15 years in a space next to the grocery store.

"Traffic was down the minute the Haggen sign went up (in June)," Catalfamo said. "We started to feel the effects after the first week."

Walk-in traffic has actually ticked up at Posare's location at 7500 W. Lake Mead Blvd., near another former Haggen store that Sprouts Farmers Market has purchased.

As for her Trails Village Center shop, there's a chance Catalfamo doesn't renew her lease when it's up in six months. Uncertainty over the empty store's fate has her worried.

Marker said litigation can complicate leasing. Haggen is in Chapter 11 bankruptcy, and in August, it sued Albertsons, which sold Haggen 146 stores across the West for $300 million, alleging that Albertsons sabotaged its market debuts.

"Here's the thing: No one is telling me when a new grocery store will come in," Catalfamo said. "If it's within a month or two, this whole place comes back to life. I could survive it if it dragged on, but I won't do it. I will not stay in a shopping center that has a big box empty like that."

'Dead' since closure

The Salt Room Las Vegas may be stuck for now. The Trails Village Center business, which offers massages, aromatherapy and a therapeutic salt cave for people with respiratory and skin diseases, has four years left on its lease, said owner Ava Mucikyan. Even if it could break its lease, the business couldn't easily move its salt cave to another spot.

When Mucikyan signed her lease a year ago, landlord Investment Properties claimed monthly foot traffic of more than 25,000 people. That number set the Salt Room's walk-through base, Mucikyan said.

But Trails Village Center has been "dead" since Haggen's October closure announcement, she said.

"The parking lot is empty," and her walk-in business is off by half. A busy Starbucks a few doors down props up what walk-ins she has left.

"If it takes too long (to fill Haggen), it's going to kill us," Mucikyan said. "Certain quarterly bills like water, sewer and outside maintenance get distributed among tenants. If they have to increase the fees, that is not exactly good for a year-old business."

Representatives of California-based Investment Properties, the center's managing partner, didn't return a call to comment on when the Haggen space might welcome a new tenant. Warehouse food and party-supplies discounter Smart & Final wanted the store, but Investment Properties officials said other tenants' leases require a full-service store with bakery, seafood, floral and other departments.

Clark County assessor records show that Spirit Realty Capital of Scottsdale, Ariz., bought the Boca Park Haggen building in June as part of a sale-leaseback deal that Haggen owner Comvest Group engineered when it bought the Albertsons stores.

A development executive with Boca Park owner Triple 5 Development said Spirit is talking with three potential tenants — one grocer and two non-grocers. The executive said he's "confident" the space will fill up "in fairly short order."

December is make or break

Garrison Investment Group, a New York firm that owns the Boulder City Haggen store, didn't respond to an email about potential tenants.

While they wait for relief, smaller tenants might band together to market what's left of their center, Marker said. One common approach is to offer joint coupons — spend a certain amount with the shoe-repair company, and get a discount at the jewelry store next door, for example.

Mucikyan said she's already boosted her own marketing budget by about 10 percent.

Tenants who take a big hit to their bottom line might also ask for a temporary rent discount, though landlords will want to see revenue statements from at least the last year, Marker said. They may also ask whether a decline in business is seasonal.

For the Salt Room, at least, survival won't depend on co-marketing or rent cuts.

What will help determine whether the company can make it long-term?

"December," Mucikyan said. "December is our busiest time."

Contact Jennifer Robison at jrobison@reviewjournal.com. Find @_JRobison on Twitter.