Sunday’s abrupt closing of the Lowe’s home improvement stores in Biddeford and Ellsworth is the latest example of national retailers pulling the plug on underperforming outlets in small markets, local real estate professionals say.
The Lowe’s stores in Biddeford and Ellsworth were anchor tenants clustered in and around so-called power centers, part of a fresh wave of big-box retail development that washed across Maine just prior to the 2008 economic collapse. Both were located across from existing Home Depot stores.
Lowe’s may have been especially hard hit by the ongoing malaise in housing and construction, commercial brokers say. But they also note that the big retailers anchoring power centers in Maine’s smaller markets such as North Windham, Augusta and Waterville, also may be under pressure.
“Some got built,” said Drew Sigfridson, a broker at CB Richard Ellis/The Boulos Co. “In hindsight, maybe some shouldn’t have been built.”
Lowe’s announced today that it’s closing 20 underperforming stores in 15 states, throwing 1,950 people out of work. They will receive pay and benefits for 60 to 90 days, according to Lowe’s.
A total of 101 workers lost their jobs at the Biddeford store, according to city officials. They have asked laid-off workers to contact the mayor’s office for help connecting to assistance. A City Hall meeting is being planned for later this week.
Customers arriving at the Lowe’s in Biddeford early today were surprised to find the store closed.
“I am stunned,” said Maynard Lind. “I come here once or twice a week. My wife was here yesterday.”
Richard DesRoberts of DesRoberts Construction LLC said the Biddeford Lowe’s always seemed more crowded than the nearby Home Depot.
“I was here to pick up a water heater. I guess that’s not going to happen,” he said. “It’s a shocker.”
In a telephone recording, Lowe’s is advising customers to contact the Scarborough or Sanford stores for deliveries or orders.
The Biddeford Lowe’s was located at The Shops at Biddeford Crossing, a 520,000-square-foot center that opened in 2007. The $50 million project includes Staples, Target and Best Buy. An earlier key tenant – Old Navy – has left.
Lowe’s was located along a stretch of Route 111 that includes Kohl’s and a Walmart Supercenter. It came into a market with an existing Home Depot that has better visibility and an established customer base, Sigfridson observed. A similar situation exists in Ellsworth and North Windham.
“In some of these markets, it was probably tight for The Home Depot to be profitable,” he said. “But bring in a second store, and it’s unsustainable.”
North Windham, Sigfridson said, may be in better shape because it’s a longer drive from the shopping centers in Portland. That makes it a destination for regional shoppers.
But Biddeford doesn’t share that relative isolation.
A fact sheet from the developer, New England Development of Newton, Mass., says the center draws from 56,433 households within 10 miles. But Sigfridson pointed out that Biddeford isn’t much farther from the Maine Mall, where the same retailers and many more are clustered.
“I was scratching my head initially,” said Charles Craig, a broker at NAI/The Dunham Group. “I didn’t think the market was large enough to support Lowe’s.”
A spokesperson for New England Development didn’t respond immediately to a phone call or email.
Both Craig and Sigfridson raised questions about whether all the other major retailers along the Biddeford strip can survive in the current economy. They highlighted the strong competition among Kohl’s, Target and Walmart.
The challenge now for the Biddeford Crossing project developer and Biddeford officials, Craig said, is to fill 165,000 square feet of vacant retail space.
“Who’s going to take that big of a box?” Craig asked.
Staff writer Tux Turkel can be contacted at 791-6462 or
Staff Writer Jon Hemmerdinger contributed to this report.