Schaumburg's retail experience a barometer for region

Shopping and Schaumburg go hand in hand, as the community has built its considerable financial muscle by creating a retail mecca.

With a world-famous mall and a number of other retail centers across its landscape, Schaumburg is a community where national economic changes are revealed and whose health is arguably a barometer for similar retail hubs across the West and Northwest suburbs.

So how is Schaumburg's retail faring in these difficult financial times?

While the slumping retail economy's effect on the village has been severe - creating many empty storefronts along Golf Road - it's still far from turning the village's commercial district into a ghost town.

The store vacancy rate, based on square footage, is now above 10 percent. While not a historic high, it has doubled in the last 31/2 years ago, Schaumburg's Community Development Director Christopher Huff said.

The bigger problem, say village officials and retailers themselves, is that remaining stores and restaurants are seeing fewer sales.

Also troublesome is the high visibility of the vacancies that do exist - the largest of which is the former Great Indoors space, built in 2001 and shuttered early this year.

Its many amenities - its relative newness, appealing architecture, prime location at Golf and Meacham Road just west of Woodfield Shopping Center and its underground parking - now conspire to make it the most visible retail vacancy in the village. There are simply few other retailers who could fill a space so vast, Huff said.

Still, the village has had a run of success matching up new retail tenants with other large spaces, a trend likely to bring the vacancy rate down to 9 percent soon, Huff said.

On Golf Road alone, Michaels is moving into the old Circuit City building, Ashley Furniture will open at the former Linens & Things site, Hobby Lobby will replace Steve & Barry's and an adjoining space, and Buybuy Baby has moved into the abandoned Wickes Furniture store.

Buybuy Baby is in Woodfield Plaza, one of seven shopping centers in town owned by Oak Brook-based Inland Real Estate Corp.

Even when consumer confidence is low, Inland Senior Vice President Scott Carr said retailers like Buybuy Baby continue to seek new locations because "there is always going to be retail demand and restaurant demand. Retailers are looking for opportunities to get into the market and Buybuy Baby is a good example."

The new store serves a clientele with a steady demand for new goods, whereas Wickes probably served even its most loyal customers every two or three years at best, Carr said.

Though Schaumburg vacancies haven't reached a historic high, they are at their highest since the early '90s, Carr said. But the problem is hardly one caused by Schaumburg, he said.

"The vacancies we see there aren't the result of a poor trade area, but of a poor economy," Carr said, adding they're on par with what the company is seeing at its holdings elsewhere. But Inland mainly seeks property in communities with high concentrations of retail like Naperville, Orland Park, Niles and Skokie, as opposed to small downtowns of bedroom communities.

And the effect the economy is having on retail is bearing out the effectiveness of that policy, Carr said.

Will Ander, a retail market analyst at McMillan/Doolittle LLP in Chicago, said current store vacancy rates are generally 10 to 15 percent, though "super-regional" malls like Woodfield and areas like downtown Chicago are probably being hit the least.

While these areas still struggle with consumer traffic compared to before the downturn, occupancy isn't among their great problems right now, Ander said. Competitive pricing is the way these occupied stores are surviving.

Buybuy Baby's neighbors, like Tuesday Morning and America's Best Contacts & Eyeglasses, reported no great effect on their own businesses from that store's former vacancy or the others that remain at Woodfield Plaza.

But Carr said there are no harmless vacancies.

"There's always some effect because the more vacancies there are in the center, the less traffic there is," he said.

Some villages, like Schaumburg, actually consider a 5 percent vacancy rate ideal for the flexibility it allows to bring in new retailers. But while some amount of vacancy is inevitable, property owners seeking rent revenue would still prefer the vacancy rate to be as close to zero as possible, Carr said.

Jackie Larson and her daughter Kasey run DBY Custom Invitations in the Copley Center on Schaumburg's Golf Road. They believe their wedding invitation business would do just as well no matter where they were because most customers learn of them through word-of-mouth or online.

And that's good, since they're located among several vacant spaces, including a prominent storefront abandoned by Washington Mutual.

"When the economy went poof, they went poof," Jackie Larson said.

The only reason DBY maintains a storefront at all is for the credibility it brings, in contrast to competitors who work out of their homes, Kasey Larson said.

The wedding business hasn't been hurt by the economy, Jackie Larson said, because weddings are planned and paid for sometimes years in advance.

But she knows other retailers are getting by just by the discounts they're offering.

While markdowns may be a way to short-term survival in today's economy, she wonders if most retailers are just setting themselves up for long-term failure by training customers only to wait for the sales.

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