Primark cuts space at King of Prussia Mall, opening room for new tenant
February 28, 2020
Source, Philadelphia Business Journal, Natalie Kostelni
Primark, an Ireland-based retailer, has shrunk the space it occupies at the King of Prussia Mall by 34,000 square feet and now operates out of 59,000 square feet.
That’s more in line with the 58,300 square feet of space it leased at the Willow Grove Mall but smaller than the 34,200 square feet it leased at Fashion District Philadelphia.
In King of Prussia, Primark occupies space that once housed a 210,873-square-foot Sears. When that closed, the space was repositioned and leased out to Primark, Dick’s, Outback Steakhouse and Yardhouse.
While most of the mall is owned by Simon Property Group (NYSE: SPG), the former Sears space is controlled by Seritage Growth Properties (NYSE: SRG), a real estate investment trust that was formed when it bought 194 properties totaling 35.1 million square feet from Sears Holdings in 2015.
The company has redeveloped many of the Sears properties much in the way it has in King of Prussia by finding new tenants to fill the space. At the end of last year, it began doing more mixed-use projects and adding apartments to its properties. The addition of multifamily is not in the plans for its King of Prussia space.
“Ideally, we are looking for a single-tenant user but ownership would consider two large boxes,” said Stanton Brown of MSC Retail, who has the listing for the 34,000 square feet vacated by Primark.
The former Primark space has an exterior facing entrance and no access directly from the interior of the mall, Brown said. It also has space for two highly visible exterior signs.
While Brown declined to indicate a rental rate for the space, it’s estimated to be in the $20s per square foot range.
Primark is a fast-fashion retailer that has stiff competition and is facing headwinds as consumer tastes are changing — again. Other fast-fashion retailers such as Forever 21, Zara and H&M, which leases 38,000 square feet in the Fashion District, quickly expanded and are now seeing a drop in sales. Forever 21 filed for bankruptcy last year and is closing hundreds of stores.
Online retailing, along with a decline in foot traffic at lower-quality retail centers, have hurt sales as has the negative public perception of the environmental impact of “disposable” clothes.
Primark also faces stiff competition. Other retailers trying to stake a claim to discounted apparel and crowding the market include Nordstrom Rack, Neiman Marcus Last Call, and Saks Off Fifth.
Primark’s expansion to the United States has been measured. It opened its first store in September 2015 in Boston and now has nine locations throughout the Northeast. The new Philadelphia store at the Fashion District will be its third in Pennsylvania. It is expected to open sometime between September 2020 and September 2021.