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To: Lizzie Tudor who wrote (145510)	8/14/2002 10:26:55 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

"Could it be that the midrange retailers have lost their edge, vs the midrange itself just dying. Mervyns is a midrange dept store here, I'd rather go to Target than Mervyns." My guess is the discounters are agressively entering the mid range pricing. The two that really come to mind is Wal-Mart and Target. There was a time you could not get much in designer styles from either of them. Target is the leader by far in this category with decent names and style. Wal-Mart has captured so much market share they are after this higher end and brand name market as well. That is the only way they can really grow anymore. Wal-Mart is likely two years behind Target in this area. This is the edge Target has over Wal-Mart which is why they are doing well while other "discounters" are folding completely. Ames today is one example. I would agree with you that the middle income to lower upper income people are still buying. They want both style and price. Can't blame them. The Gaps have lost any edge they once had. For example, one may have been embarassed at telling a friend their purchase was from Target rather than Gap. That is no longer the case. My post likely was not clear. I was not talking about the consumer as the ones with the problems but rather the retailers targeting the middle income consumer. I am in agreement with what you say. My concern is the marketing techniques of the Wal-Marts and the Gaps. They all have stand alone large stores and sell a piece of land along side their store to a developer to build a small strip center. The traffic patterns of the consumer now is to the parking lots of these stores. It was not long ago the traffic was in the enclosed super regional malls. Their traffic is dwindling as well and these are the locations of the Gaps, Old Navey, Sears, Penneys, etc. The truly very wealthy consumer still will not buy at a Target. They will still go to a Sax, Bloomingdales, Tiffanys, etc. Theis segement is not being targeted by any new competition currently. Candidly, I was kind of also thinking in public. I was thinking of relocating my store that is in an enclosed shopping mall. There is clearly more traffic now at the "discount" stores many of which are not really all discount anymore. The question that comes to mind is will this trend continue and if so, will it accelerate? By the way, a little trivia here is that the adjacent lands to these Wal-Marts and Targets are sold by Wal-Mart and Target to the developer. The sales goes with strings attached such as no Sears, Penney, Gaps, etc. in those strips. About five years ago I had some experience in trying to develop one of these strips in my case adjacent to a Super Wal-Mart. In the Meadville market the one main enclosed shopping mall has an owner which is in Chapter 11. Clearly, you can imagine the condition and lack of maintenace of this center. I know very little about developing commercial property but wanted to move next to the Super Wal-Mart. Wal-Mart had bought a 100 acre farm in our area and built on all of it except eight adjoining acres which they had up for sale. I contacted Wal-Mart's real estate department about this adjoining piece of property. Wal-Mart's cost bast per acres for the 100 acres was about $2,000 per acres. I figures that eight acres at $15,000 an acre was doable and somehow expected that would be the cost for the land. To my surprise, Wal-Mart wanted $300,000 per acre and with the above mentioned strings attached to any commercial development. The people in their real estate department were very nice and their position was so many hundreds of thousands of cars go in and out of their parking lot each year and that goes right by the land for sale. The problem was there was no arguing with that due to the fact it was an accurate statement. That made the cost prohibitive for me. There is a strip there now developed by a far more well healed firm. There is of course no Gaps,, Penneys, Sears, etc. In fact, nothing that would compete with Wal-Mart. I thought I would share some thoughts:-))

To: Lizzie Tudor who wrote (145510)	8/14/2002 10:26:55 PM
From: Glenn D. Rudolph	Respond to of 164684

"Could it be that the midrange retailers have lost their edge, vs the midrange itself just dying. Mervyns is a midrange dept store here, I'd rather go to Target than Mervyns." My guess is the discounters are agressively entering the mid range pricing. The two that really come to mind is Wal-Mart and Target. There was a time you could not get much in designer styles from either of them. Target is the leader by far in this category with decent names and style. Wal-Mart has captured so much market share they are after this higher end and brand name market as well. That is the only way they can really grow anymore. Wal-Mart is likely two years behind Target in this area. This is the edge Target has over Wal-Mart which is why they are doing well while other "discounters" are folding completely. Ames today is one example. I would agree with you that the middle income to lower upper income people are still buying. They want both style and price. Can't blame them. The Gaps have lost any edge they once had. For example, one may have been embarassed at telling a friend their purchase was from Target rather than Gap. That is no longer the case. My post likely was not clear. I was not talking about the consumer as the ones with the problems but rather the retailers targeting the middle income consumer. I am in agreement with what you say. My concern is the marketing techniques of the Wal-Marts and the Gaps. They all have stand alone large stores and sell a piece of land along side their store to a developer to build a small strip center. The traffic patterns of the consumer now is to the parking lots of these stores. It was not long ago the traffic was in the enclosed super regional malls. Their traffic is dwindling as well and these are the locations of the Gaps, Old Navey, Sears, Penneys, etc. The truly very wealthy consumer still will not buy at a Target. They will still go to a Sax, Bloomingdales, Tiffanys, etc. Theis segement is not being targeted by any new competition currently. Candidly, I was kind of also thinking in public. I was thinking of relocating my store that is in an enclosed shopping mall. There is clearly more traffic now at the "discount" stores many of which are not really all discount anymore. The question that comes to mind is will this trend continue and if so, will it accelerate? By the way, a little trivia here is that the adjacent lands to these Wal-Marts and Targets are sold by Wal-Mart and Target to the developer. The sales goes with strings attached such as no Sears, Penney, Gaps, etc. in those strips. About five years ago I had some experience in trying to develop one of these strips in my case adjacent to a Super Wal-Mart. In the Meadville market the one main enclosed shopping mall has an owner which is in Chapter 11. Clearly, you can imagine the condition and lack of maintenace of this center. I know very little about developing commercial property but wanted to move next to the Super Wal-Mart. Wal-Mart had bought a 100 acre farm in our area and built on all of it except eight adjoining acres which they had up for sale. I contacted Wal-Mart's real estate department about this adjoining piece of property. Wal-Mart's cost bast per acres for the 100 acres was about $2,000 per acres. I figures that eight acres at $15,000 an acre was doable and somehow expected that would be the cost for the land. To my surprise, Wal-Mart wanted $300,000 per acre and with the above mentioned strings attached to any commercial development. The people in their real estate department were very nice and their position was so many hundreds of thousands of cars go in and out of their parking lot each year and that goes right by the land for sale. The problem was there was no arguing with that due to the fact it was an accurate statement. That made the cost prohibitive for me. There is a strip there now developed by a far more well healed firm. There is of course no Gaps,, Penneys, Sears, etc. In fact, nothing that would compete with Wal-Mart. I thought I would share some thoughts:-))