Harps buying 9 stores vacated by Wal-Mart

Harps Food Stores Inc. is buying nine vacant Wal-Mart stores in Arkansas and Missouri, including this location in Prairie Grove.
Harps Food Stores Inc. is buying nine vacant Wal-Mart stores in Arkansas and Missouri, including this location in Prairie Grove.

Harps Food Stores Inc. is acquiring nine stores in Arkansas and Missouri that were shut down by Wal-Mart Stores Inc. earlier this year.

photo

NWA Democrat-Gazette

The former Walmart Express building Wednesday at 881 W. Buchanan in Prairie Grove.

The Springdale-based grocery chain announced its purchase plans Wednesday, which include vacant Arkansas stores in Gravette, Gentry, Prairie Grove, Cedarville, Mansfield and Charleston. Harps also is purchasing Missouri stores in Noel, Seligman and Anderson as part of the deal.

In all, Wal-Mart shut down 11 stores in Arkansas. Closed stores in Coal Hill, Maumelle, Damascus, Mulberry and Decatur were not part of the deal.

J. Max Van Hoose, vice president of store planning at Harps, declined to disclose the purchase price of the nine locations. Van Hoose said the company has been working with Wal-Mart about purchasing the stores since the closings were first announced by the retailer in late January, and the sale is expected to be finalized later this month.

"Our wheelhouse is these type of markets, these type of communities," Van Hoose said about the store purchases. "So we're excited both for our employee-owners to be able to grow the company and for these communities that we might not be in to be there as well."

Wal-Mart announced it was closing 269 stores worldwide, including 154 in the U.S., as part of its ongoing efforts to streamline and reorganize its operations. Most of the closures across the country were Wal-Mart's smaller-former stores, which averaged 12,000 square feet and were part of a pilot program that began in 2011.

Wal-Mart CEO Doug McMillon said in January that the store closures would "create an even stronger Wal-Mart by winning with our proven store formats and deepening our relationships with customers." Wal-Mart spokesman Brian Nick said Wednesday that the retailer is working with "interested third parties to facilitate the process" of finding buyers or tenants as quickly as possible and expects more information from respective buyers in the coming months. For now, Wal-Mart's decision to close locations has left some communities without a grocery store.

Gravette residents have had to travel about 20 miles to either Siloam Springs or Bentonville to shop for groceries after Wal-Mart's departure, Mayor Kurt Maddox said. The city has addressed the problem by announcing earlier this year that CV's Family Foods -- a Van Buren-based grocery chain -- had purchased a store formerly occupied by Marvin's Food Stores and will open in the community later this year.

Harps now has purchased the vacant Wal-Mart.

"It will be great for our community," said Maddox, who said Harps is making plans for a job fair in the town. "We're hoping after they close [the sale] it will be ready within four to six weeks."

Mary Kay Kelley, director of the Billy V. Hall Senior Activity and Wellness Center in Gravette, said that is good news for her patrons.

Since Wal-Mart's closing, the center has had to arrange for shuttles to take senior citizens who don't have transportation to grocery stores in Siloam Springs or Bentonville twice a month. Shuttles also run once a week to Gravette's Dollar General for essentials, but the store doesn't offer everything.

"A lot of them moved here because of the convenience of being able to have grocery stores to shop at, and all of a sudden they have nothing," Kelley said. "If Harps is coming it would certainly be a big help because if you need a head of lettuce we have to travel to get a head of lettuce. Or a tomato. That would cut down on a lot of traveling because we could do our shopping locally like we have done in the past."

Harps operates 79 stores in northern and central Arkansas, southern Missouri and eastern Oklahoma. The company's plans for its new locations is not clear, but Van Hoose said most of the stores are smaller than the size the grocery chain typically operates. He said Harps does have experience with smaller-store formats, and the company is "confident" it will work.

Three of the closed Wal-Mart stores are in communities where the company already has a grocery location or is in the process of building one. Harps operates stores in Prairie Grove and Noel. The company announced earlier this year that it had purchased a former Marvin's IGA in Gentry and expects to open it later this year.

Van Hoose said the company couldn't provide more details about its plans for each location until after the sale is completed, but he confirmed Harps is acquiring the stores.

Retail consultant Carol Spieckerman, president of Spieckerman Retail, said it's possible that Harps is securing the locations to prevent other operators from acquiring them. But Spieckerman added it also would make sense for the company to add more stores in those communities, saying "store clustering and self-cannibalization are viable retail strategies," even in small towns.

"Starbucks, Dunkin' Donuts and even Wal-Mart have pursued this strategy because they would rather 'lose' a sale to one of their own stores than to a competitor," Spieckerman said in an email. "Also, for retailers like Harps, store locations serve as a form of advertising that reinforces their brand presence in particular markets."

Commuting routes can also validate the strategy, because a specific store can serve consumers on their to work and another store might be convenient for people heading home, she said.

John Lafley, the mayor of Noel, said Harps is leasing the location it now operates in his community. While he doesn't know Harps' exact plans, he said acquiring the empty Wal-Mart building will give the grocery store more space.

Gentry Mayor Kevin Johnston, who announced that Harps had acquired the community's former Marvin's store in March, said he's not aware of the grocer's plans for the closed Wal-Mart store. But Johnston said it "can't be a bad thing" if someone is investing in the property.

"We'll just wait and see what can happen with it," Johnston said. "Either way, we look forward to that building being occupied by someone, and hopefully that creates some jobs and that just goes from there. We're looking forward to whatever the future brings."

Business on 06/09/2016

Upcoming Events