It was only a matter of time. Sears in Marin is toast. Anybody who spent time in the Sears store at San Rafael’s Northgate Center knew the retailer wasn’t long for the world, the Sears brand has been on the ropes for years. It was taken over by hedge funder Eddie Lampert in 2005, who failed to invest in the retailer allowing the stores to become outdated as retailers were going digital. Lambert controls ESL Investments, the hedge fun he founded. ESL and Lambert own close to 30 percent of Sears and Lambert is chief executive officer.
Behaving as if he were a private equity investor, Lampert bought the famed retailer on the cheap and proceeded to sell its assets off. The Craftsman tool line was sold for $900 million to Stanley Black & Decker Inc. Sears Canada was sold for $80 million and Sears Hometown went bye bye for just $45 million.
It wasn’t just vanishing brands and a failure to update stores. Sears hung onto Kmart, another low end troubled retailer without improving it. It spun off Land’s End into a separate business via IPO, but hung onto more than 40 percent of the business—never knew what to do with in the first place.
To be completely fair, brick and mortar retail is being challenged on all fronts now as more shoppers opt to spend dollars with Amazon and other sites. Sears is not alone in shuttering stores, another Northgate neighbor, Macy’s, is closing stores as well and is shuttering its Novato furniture store. And Toys R Us in San Rafael is a goner as well.
But Sears’ failure has been coming down the road for years. So local employees are the victim of bad decisions made in Hoffman Estates, Ill. And Merlone Geier Partners which bought the mall last year, now has a pretty large hole to fill. The investor has been trying to figure out how to reposition the shopping center, flogging the idea of Northgate being a community gathering place and asking folks to fill out an online survey.
The good news is the closing of Sears gives Merlone lots of flexibility to move Northgate in a different direction.
Black Bear madness
Staying in the same neighborhood, Black Bear Diner is finally open and the family friendly chain known for substantial portions is jammed with cars stacking up in the Terra Linda lot like the pancakes inside.
Business is so good that the owners of the franchise, Karan Gogri and Sanjiv Patel, are making plans to open a second Black Bear in Marin, possibly in Novato or in Corte Madera. Gorgi and Patel own and operate a location in Danville. They hold a development agreement with Black Bear to open 19 restaurants over the next six years. Each eatery costs about between $1 million and $1.5 million to open.
While Marin residents can often be heard advocating for organic produce, free range chicken, grass fed beef, cage free eggs and vegetarian fare, it seems that simpler stick-to-your-ribs grub may be more popular than one might imagine. Check the Marin Moment for another indicator that Marin is digging simple food.
Sam’s Anchor Café sold
The venerable restaurant on the water, Sam’s Anchor Café in Tiburon has been sold. Brian Wilson and Steve Sears have sold the place to a group of locals from the Tiburon-Belvdere area. News of the sale has been quiet, the opposite of what a sunny weekend brunch on the deck at Sam’s is like.
Years ago a limited partnership of 14 people bought Sam’s, with each partner ponying up $6,000 for a 5 percent piece. When this sale took place, the only partners remaining were Wilson and Sears.
A change of ownership notice from the ABC was posted at Sam’s. No word on what if any changes the new ownership might have in mind for the local landmark.
Your Marin moment
Hope you aren’t full yet since Shake Shack is coming to Larkspur. While the chain has 100 U.S. locations, only seven of them are in California, with none of them in Northern California. The chain is famed for the Shackburger, crinkle-cut fries and old fashioned shakes. It is part of the gourmet burger wave, which includes Super Duper, Gott’s Roadside and The Counter. There’s a Super Duper in Novato and Mill Valley, a Counter in Corte Madera and Gott’s Roadside will open in Greenbrae this year.
If Marin isn’t careful it will become the hamburger headquarters, a burger breeding ground, the fries’ focal point and a milkshake magnet.
Bill Meagher is a contributing editor at NorthBay biz. His day job takes him to San Francisco where he’s an associate editor for the Wall Street based digital news outlets The Deal and TheStreet. He covers smallcap and microcap equity finance, health care, politics and the occasional investigative piece. Reach him at bmeagher@northbaybiz.com with news tips, comments and threats of legal action. Follow him at @MeagherBill.
