A large “Store Closing” sign droops in front of Payless ShoeSource at the Centre at Preston Ridge, one of Frisco’s largest shopping centers along Gaylord Parkway. The windows are plastered with “Going out of Business”˜signs.
National retailers—such as Payless, Beauty Brands, Charlotte Russe and Gymboree—have announced nearly 5,300 store closures across the United States so far this year, including some in Frisco, according to Coresight Research. That is more than twice the number of store openings announced this year. Numerous other national companies have announced closures but not whether any Frisco locations are affected.
But in Frisco, these closures are just a blip on the city’s economic radar, retail and local business experts said. With the city adding about 10,000 people each year, a low commercial vacancy rate and a number of new businesses moving in, Frisco seems poised to weather an ever-changing retail landscape, they said.
“There’s an overall health in Frisco because you’ve got population growth, you’ve got commercial and job growth, and then you’ve got an infrastructure of [major roads],” said Robert Young, executive managing director of Weitzman, a real estate company that multiple properties in Frisco.
These factors help protect Frisco’s retail sector from economic cycles that affect other areas of the country, said Tony Felker, Frisco Chamber of Commerce president.
“While not completely insulated, we might be in a better bubble [than]other communities just given the growth, given the positive reputation that we have,” he said.
A big factor for Frisco’s market health is its location in the region, Young said. The intersection of SH 121 and the Dallas North Tollway where Frisco and Plano meet is what he refers to as “Downtown North Texas.” The area includes a conglomeration of major developments—such as Hall Park, Stonebriar Centre and Legacy West—that play off of each other to attract business, he said.
“This is a major hub, and Frisco is right in the bullseye of that hub,” Young said.
Young said businesses are lined up to move in.
Last year, Toys R Us shuttered all of its stores, including the Frisco location, which closed in June 2018. Less than four months later, JAH Realty announced that Burlington, an off-price department store, would take over the former Toys R Us space and open later this year.
Frisco’s 5.9 percent commercial vacancy rate is lower than the region’s average of 7.6 percent, according to data from Weitzman. Frisco also has one of the largest commercial bases in the Dallas-Fort Worth area at more than 8 million square feet.
“Frisco is a market of 25,000-square-foot centers and greater,” Young said. “… The ability to re-lease the space is quite real.”
The trend holds true for one of Frisco’s largest retail centers, Stonebriar Centre. At 1.7 million square feet, the mall has maintained an occupancy rate of 95 percent since opening in 2000, Stonebriar Centre general manager Randy Barnett said. “Frisco and Stonebriar with the economy and things being strong as they are, it’s provided us some opportunity to bring in new retailers,” he said.
Three major retailers—Charlotte Russe, Gymboree and Payless—are closing their locations at the mall this year. Barnett said it is typical for retailers to hold mass closures at the beginning of the year.
Sears, one of the mall’s anchor tenants, also closed its location at Stonebriar Centre last year. Barnett said the mall is hoping to announce a new tenant for that space soon.
In a smaller community, a large retail closure similar to Sears could hurt the local economy, Young said. But the growing business community in Frisco allows its economy to remain resilient, he said.
And because of the large number of retail businesses in Frisco, the community has availability to hire employees from closing stores, Felker said. The number of retail employees in Frisco has steadily grown by a several hundred each year in recent history, according to the U.S. Census Bureau’s American Community Survey. More than 8,500 retail employees worked in Frisco as of 2017.
The retail landscape has been changing for years, and the companies closing stores are often those that have not adapted well, said Linda Mihalick, the senior director of the Global Digital Retailing Research Center at the University of North Texas. Some retailers filed for bankruptcy a couple years ago and are just now deciding to shut down, she said.
“It’s just like a person; if you’re so far in debt and your car is breaking down, you can’t go buy a new car because you’re so far in debt,” Mihalick said.
Retailers in a financial bind may even close top-performing stores, Young said.
“They may choose to close their entire operation for issues that have nothing to do with Frisco,” he said.
Since the latest recession starting in 2008, consumer patterns have changed, Mihalick said. Customers now want a shopping experience and will go online if they do not get that, she said.
Businesses that have adapted to the changing consumer landscape are the ones that have survived and thrived, Mihalick said.
“Frisco and that whole area has plenty of innovative, new retailers that are coming into the area and have paid attention to how the consumer wants to shop,” she said.
Frisco resident Robert Phelps said he shops both in stores and online. Shopping in a store allows him to see details, such as the expiration date on food or the fit of clothing. But he goes online when a store lacks the customer service he is looking for, he said.
“It’s nice to go to a place where you believe in their expertise,” Phelps said.
The market’s future
Predicting the local economy’s health a decade or so from now is a daunting task, Young said, but Frisco’s market is likely to remain stable for the next five years or more.
“The prognosis is really good,” he said. “If there’s a bump in the road, people will assess, they’ll reconstitute, and they’ll come up with a plan going forward.”
But Frisco, as healthy as the market is, presents its own challenges to the retail sector, Felker said. For instance, the high commercial rental rates in the city could be the tipping point that leads some businesses to close, he said.
Most retailers have a better chance to thrive in Frisco than elsewhere, but the city’s economic health should not be taken for granted, Felker said.
“No community, no business environment is ever immune to all factors,” he said. “We always need to be keeping an eye out for national trends, economic factors that could affect us all, including something that could be completely unexpected.”