When Sears, Toys "R" Us and Circuit City filed for bankruptcy in recent years, it was an opportunity for other retailers to move into their old storefronts. Now, retailers are pouncing on- including some former locations in Massachusetts.
"Some of our best stores were created from carved-up Kmart or Sears locations," Burlington Stores CEO Michael O'Sullivan said earlier this year.
In total, Burlington has taken over 44 former Bed Bath & Beyond spaces. Two of them officially reopened as Burlington stores this month in Plymouth at Colony Place and The Marketplace in Braintree.
This is the first holiday shopping season in more than 50 years without physical Bed Bath & Beyond stores after the chainearlier this year and closed its final 360 stores and also 120 buybuy BABYs in one of the largest in years. There were 17 Bed Bath & Beyond stores open in Massachusetts at the start of 2023.
Bed Bed & Beyond's brand out of bankruptcy and has relaunched it online, complete with the . But hundreds of empty Bed Bath & Beyond stores auctioned off as part of the bankruptcy proceedings are turning out to be coveted real estate for retailers and other companies seeking to expand.
What's moving in to old Bed Bath & Beyond stores
Burlington, Michaels, Barnes & Noble, Ollie's Bargain Outlet, Macy's, HomeGoods and other chains have replaced old Bed Bath & Beyond stores. Indoor pickleball courts, trampoline parks and bowling alleys have also filled up the vacancies.
At Foxboro's Patriot Place, a Restoration Hardware Outlet, which is a luxury furniture chain, is "coming soon" to the shuttered Bed Bath & Beyond store. And in Seekonk, Ocean State Job Lot has just moved in to an old Bed Bath & Beyond location on Highland Avenue.
Former Bed Bath & Beyond stores are hot, even as retail spending slows a bit, because there aren't too many new big boxes to move into. There hasn't been much new retail space built since the 2008 financial crisis, and the rise of online shopping, retail and real estate experts say, all put a damper on building.
The result is that retail vacancy rates are at historic lows.
The majority of Bed Bath & Beyond's stores are in the suburbs of mid-size and large cities, and are under 50,000 square feet. These are appealing qualities for retailers as some companies favor smaller spaces, instead of mega stores, to save on rent and labor and as shoppers buy more online. Macy's, for example, is opening its smallerat old Bed Bath & Beyond stores. One of those is in a former Bed Bath & Beyond location at the South Bay center in Dorchester.
While headlines about the "retail apocalypse" have grabbed attention over the past decade, brick-and-mortar stores are still important to many shoppers.
Store growth has been most pronounced in the discount segment of retail as shoppers on tight budgets search for low prices. Other companies are using their stores to ship online orders to customers, which can be more efficient than delivering orders from warehouses. Even brands that started online, such as Warby Parker, have opened stores.
Bed Bath & Beyond spaces have been grabbed up swiftly at rents of up to 50% what Bed Bath & Beyond was paying, according to commercial real estate investment firm CBRE. Landlords are taking advantage of the vacancies, with some dividing former Bed Bath spaces into smaller sizes, said Brandon Isner, CBRE's head of retail research for the Americas.
"There is little to no concern that any of the spaces will go vacant for long," he said.
Kimco Realty, a real estate owner with 26 former Bed Bath & Beyond leases, said that new leases were 38% higher than Bed Bath & Beyond rents. Kimco has leased 14 spaces to companies like Burlington and HomeGoods and is in discussions with TJ Maxx, Ulta, REI and others for the remaining 14 stores.
"We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies," Burlington CEO Michael O'Sullivan said. "Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens 'N Things."
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