Keeping consumers close to home | nnbusinessview.com

Keeping consumers close to home

Rob Sabo

A push by Elko County Economic Diversification Authority and a well-known shopping mall developer to lure more soft-goods retailers to the region has resulted in the entry of several national chain stores into the Elko market.

Jo-Ann Fabric and Craft, Ross Dress for Less and Famous Footwear all plan to open locations later this year at Elko Junction Shopping Center on the west end of town at Mountain City Highway and Sage Crest Drive. The businesses will take renovated space formerly occupied by Redstone Building Supply.

Although the primary focus of the Elko County Economic Diversification Authority is attraction of new companies specializing in manufacturing and distribution to Elko County, bringing in more clothing and apparel retailers also is a key component in generating tax dollars for the county, says Pam Borda, ECEDA executive director.

The authority completed a survey about a year ago that identified key areas where Elko residents are spending money outside of the county, and the survey identified a lack of retail clothing outlets as one of the primary reason residents shop out of the area.

“It was a great survey, and we got a really good response, so we got a good sampling,” Borda says. “The information that came back was not a surprise at all leakage for out-of-town shopping was phenomenal, in the millions.”

The economic development authority pursued well-known national retail chains in order to jump-start the county’s soft-goods retail offerings. ECEDA focused on shoe stores and women’s dress clothing, which ranked highly on its survey of out-of-town spending.

ECEDA began contacting company decision makers, which resulted in drawing three new shops to Elko. Currently, shopping options for clothing and apparel include Cedar Creek Clothing Company, Walmart and Kmart. The city’s JC Penny and Sears stores aren’t full-sized department stores.

“It is very difficult for a woman to buy a pair of shoes in Elko,” Borda says. “If (residents) perceive that what they want mostly isn’t here, they will leave town, and when they do they also will buy things that they could have bought here. If we can get them to stay in town and get them shopping, I think we can accommodate all their needs here.”

Borda jokes that a female friend predicts that shoe-starved Elko females might even clear the shelves at Famous Footwear the day it opens.

Each company is expected to hire locally. Hiring counts at Famous Footwear and Ross weren’t available, but Jo-Ann Fabric and Craft Stores typically have four full-time employees and up to 40 part-time employees, the company reports. The company operates five stores in the state and is expected to operate a small-format store of 15,000 to 25,000 square feet at Elko Junction Shopping Center.

The 200,000-square-foot Elko Junction Shopping Center, anchored by Raley’s, has enjoyed a renaissance since being purchased by Meridian Pacific in February of 2010.

Meridian Pacific, which is headquartered in Tiburon, Calif. and has an additional office in Honolulu, owns and manages several shopping centers in California and Hawaii. President Gary Pinkston says leasing activity at the center outstrips the rest of the company’s combined portfolio.

“There was a lot of built-up demand,” Pinkston says by telephone from his family’s cattle ranch near Wichita, Kan. “It was perfect storm for us to capitalize on the economy in Elko, which is superb, but the retail is almost non-existent.

“There was a need in Elko but also a need for a developer to figure out how to put these tenants in one building. These deals went together better than in Hawaii or California because of the need in the market; it was under-retailed. We got as much rent out of these tenants as we would in Fresno or Bakersfield.”

Although some retailers in the area might see the entrance of new stores as a threat to their business, others feel that increased retail offerings will benefit all shops in the county. Duane Jones, owner Cedar Creek Clothing Company, says that adding more stores in town serves to increase Elko’s draw from outlying communities such as Battle Mountain, Wells, Eureka, Ely and Carlin.

“We have to give people a choice, and the retail at the west end of town gives people more of an excuse to shop in Elko,” Jones says.

Jones isn’t worried about competition since his store stocks higher-end apparel from makers such as Columbia, Woolrich, Mountain Hardwear and The North Face gear that proved extremely popular with workers on the Ruby natural gas pipeline. Workers unaccustomed to the extremely cold weather of northeastern Nevada flocked to Cedar Creek Clothing in numbers hoping to find apparel to ward off freezing working conditions.

Jones says due in part to that group of workers, sales volumes rebounded from several lackluster years, and that 2011 is on pace with 2007 sales figures.

“We definitely felt that pipeline group come through,” he says. “A lot of workers were from Southern states, and they were buying anything that would keep them warm out there on that jobsite.”

The Nevada Department of Taxation shows that clothing and clothing accessory sales in Elko County ticked up more than 17 percent for the first seven months of the fiscal year from the prior year. Sporting goods dealers and general merchandisers in the county saw an increase in revenue of 6 percent from year-earlier figures.


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