Retail a mixed bag across region

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Jerry Rutledge, right, chats with employee Luke Faricy at Rutledge’s, one of downtown’s longest-established retail shops.

Jerry Rutledge, right, chats with employee Luke Faricy at Rutledge’s, one of downtown’s longest-established retail shops.

Jerry Rutledge will greet you with a warm handshake and a smile.

The downtown retailer has reason to be happy. His men’s apparel shop, Rutledge’s, has been on Tejon Street (first at the corner of Tejon and Pikes Peak Avenue, more recently at the corner of Tejon and Kiowa streets) for nearly a half-century, and he’s just started one of his most successful years ever. Last year he gained about 1,200 square feet of space next to his shop and incorporated it, and since his grand reopening in November, business has been up 42 percent.

“We’re still trying to figure out what we did right,” he quipped, while attributing much of the growth to his inventory of very desirable brands and providing his loyal customers with what they want.

Rutledge remembers a downtown where standalone retailers included JC Penney and May D&F.

“It was totally different when we opened. There was no Citadel or Chapel Hills malls,” he said.

Building hopes

Rutledge’s business model is highly specialized, equating to little competition along the Front Range. Rutledge pointed to Andrisen Morton in Denver’s exclusive Cherry Creek shopping district as his closest competitor. He said, however, he doesn’t see retail dollars flowing north to the competition.

“I can’t tell you the last time I heard someone say, ‘I’ll go to Denver,’ ” he said. “I think downtown [Colorado Springs] is looking better every day. There are new restaurants, new shops, people living downtown. If City for Champions happens, that will be phenomenal.”

The proposed City for Champions project would mean new downtown venues including an Olympic museum and stadium/events center that could boost retail sales in the area, especially with tourism dollars.

Specialty businesses like Rutledge’s, and Jason and Molly Smith’s pet retail store Republic of Paws in Old Colorado City, have been prospering.

Jason Smith, who is also vice president of Old Colorado City Associates, said the Westside’s environment aims to nurture retail businesses.

“There are [retail] spaces available with lots of square footage and the cost for that square footage is great,” Smith said. “Rent is more affordable than downtown or the east side of Colorado Springs. People just starting out have the ability to enter into a vibrant market. The Westside is a tight-knit community where the people who live down here also shop down here.”

Smith said there is a noticeable level of turnover in the district, but new shops prevent stagnation. He explained that destination retailers like Michael Garman Museum & Gallery and Rocky Mountain Chocolate Factory will always bring business, and that business trickles to newer, less-established shops.

“Anytime you can get a store that attracts people on a repetitive basis, that helps other stores,” Smith said.

Old Colorado City Associates requires a membership, with fees of $200 a year following a one-time application fee of $35. That money, according to Smith, is invested heavily in marketing the district.

Republic of Paws, he said, has reaped the benefits of setting up shop on the Westside. The business started nearly five years ago as a web retailer, but grew into a brick and mortar shop when the Smiths moved into a Victorian home at Bijou and Wahsatch. When they outgrew that space, they began looking at vacant spots in downtown Colorado Springs.

“We weren’t able to find the right space,” he said. “We looked at Old Colorado City and thought there was no way we could afford the space we would need.”

They moved to their current location on West Colorado Avenue two and a half years ago and business has been booming ever since.

“We’ve seen growth in Old Colorado City,” Smith said. “It’s slow and steady every month, but we’re in the black. We see businesses as new as us here and they are still in the red. We are able to have a full-time employee and business has been going well. In this economy, we feel like we’re succeeding. We’ll take that slow growth.”

Tougher times at malls

While small retail businesses have been sprouting everywhere from the city’s west side, to downtown, to the ever-expanding market along the Powers Boulevard corridor, more established shopping centers like the Citadel and Chapel Hills malls have dealt with major closures, including Chapel Hills’ loss of anchor stores Borders and Kmart within the past several years and the expected closure of JC Penney next month.

Chapel Hills general manager Victoria Harley declined an interview with the Business Journal.

However, Nick LeMasters said the traditional mall model is not only viable, it’s also desirable. The Cherry Creek general manager said the shopping center has been at the heart of one of Denver’s most affluent areas for more than two decades and, according to LeMasters, there are 40 retailers that call Cherry Creek home that can’t be found anywhere else along the Front Range.

Those include high-end retailers Burberry, Montblanc, Nieman Marcus, Brooks Brothers and Louis Vuitton.

“Customers like the idea of being able to shop for everything in one place,” LeMasters said. “That’s the advantage of the mall format. That’s why it’s relevant.”

He said store turnover at the mall is about 10 percent, which is “very average, very healthy.”

“It allows Cherry Creek to introduce new concepts,” he said. “Concepts change over time. You can’t compare what the center looked like 20 years ago from a merchandising perspective. Furniture stores were not part of the environment. Electronic stores were not part of the environment.”

Consumers’ influence

He said consumers have shaped the mall that exists today, adding a third of those consumers come from outside a 50-mile radius, but that there is no direct marketing in Colorado Springs.

While the Citadel Mall has struggled to attract high-profile retailers of late, its neighbor to the east has seen a bit of a resurgence over the past few years.

Citadel Crossing, just across Academy Boulevard, has been renovated, is growing and has started to attract national brands.

“Business is good,” said Luke McFetridge, regional manager at NewMark Merrill, the Citadel Crossing’s management company. “Within the Citadel Crossing you have national names as well as smaller franchises and local mom and pop shops. It offers variety for the consumer.”

Citadel Crossing has attracted national chain brands including Lowe’s, Family Christian, Guitar Center and the Egg & I restaurant; larger entertainment venues like the Picture Show Entertainment movie theater and the 19,000-square-foot Jump N’ Jacks gymnasium; as well as small regional retailers including Plato’s Closet, a secondhand clothing store.

McFetridge said the retail center is drastically different than it was four years ago, and that an emphasis has been placed on filling vacant spots and ensuring the facilities are clean and customer-friendly.

Looking ahead

McFetridge is positive about the direction the North Academy Boulevard retail sector is going.

“I think we’re starting to see a resurgence,” he explained. “That said, there are issues that need to be dealt with. The [Citadel] Mall … is at a critical point. There have been lots of tenants move to Powers [Boulevard]. But I’m bullish on the Academy area. You just can’t replace that real estate.

“As the market gets better, I think we’ll see tenants come back because this is a low-cost draw in that area.”

Tom Zwirlein, professor of finance at UCCS and director of the Southern Colorado Economic Forum, said he’s seen local retail trends unfold over the past several years.

“Retail follows rooftops,” Zwirlein said. “A good amount of retail is moving from within the city limits to outside city limits. That affects sales tax collection in the city.

“Retail activity has been moving farther north or farther east.”

Zwirlein said another trend is retail sales after two summers of fires and floods.

“The Pikes Peak area is rebuilding,” he said. “The Waldo Canyon fire and Black Forest fire claimed 800 homes. People are trying to rebuild and get back their contents. That will have a positive impact on retail sales in the region. The question is, ‘How long will it last?’”