Q&A: Gordon Brothers on leveraging retail disruption for strategic growth
Chain Store Age recently sat down with Michael Burden and Al Williams, co-heads of Gordon Brothers Real Estate Services to discuss how retailers can grow by taking advantage of opportunities created by restructurings, off-market deals, and other forms of retail disruption.
CSA: With new development limited, how can you say this is an overlooked growth channel?
Williams: We are still largely in an environment where shovels are just not in the ground. Construction costs remain high, capital is tight, and very little new supply is being delivered. But restructurings--whether inside or outside of bankruptcy--create organized situations where leases can be assigned or transferred cleanly. Retailers can step into proven locations at favorable rents without waiting for years for new development. Yet many still only chase traditional deals and miss these moments.
CSA: Michael, what examples stand out?
Burden: Burlington leaned in early, starting with Toys “R” Us and followed by more than 50 Bed Bath & Beyond boxes, and has since added locations by stacking on sites from Joann, Conn’s, and Big Lots. Dollar Tree and Five Below were major players in Party City, with Dollar Tree also picking up a large group of 99 Cents Only Stores.
At Gordon Brothers, we acquired Big Lots and then moved hundreds of stores and the related IP to Variety Wholesalers, while cutting bulk real estate deals with Ollie’s, Tractor Supply, Aldi, and a dozen or so other brands. These were strong, well-located boxes that would have taken years to assemble through normal site selection.
CSA: You’ve mentioned out-of-court opportunities, too. How does that fit in?
Williams: Many retailers are trimming weaker stores, rightsizing their store footprint or exiting markets that no longer fit their model. Those situations create another lane for growth. Well capitalized retailers can approach those companies directly and negotiate assignments or subleases without a court process. It is faster, often less competitive, and still offers tremendous value. We are seeing a lot more of that quiet retailer to retailer activity.
CSA: Michael, if it works so well, why do so many healthy retailers hesitate to take advantage of it?
Burden: Timing and perception. Court processes often move in 30 to 60 days. If you do not have underwriting models, conversion budgets, and landlord strategies ready, you will miss the window. The other factor is the mindset. Many executives assume restructurings are only for distressed buyers. In truth, the best operators use these moments to grow. They are disciplined, prepared, and move fast.
CSA: What makes this more attractive than negotiating new leases with landlords?
Williams: I am not sure “more attractive” is the right term, but we are strong advocates for this being part of every retailer’s growth strategy. We do hundreds of new stores each year the old-fashioned way, of course. The difference between this process is speed and certainty. Buyers can secure multiple sites at once, often at below market rents, with liabilities cleared by the court. Some even obtain designation rights, which give them time to choose the best locations after deeper due diligence. In a high cost, capital constrained environment, taking over existing boxes is one of the most efficient ways to expand.
CSA: What can retailers do now to be ready for the next opportunity?
Burden: Build a plan before the filing happens. Keep a target list of markets and box sizes, model conversion costs, and have your contractors and vendors lined up. You cannot start from scratch when something hits the market.
Williams: And surround yourself with experienced partners who understand how to navigate cure costs, lease assignments, and landlord discussions. With the right team, any retailer can move decisively and capture long-term value from this disruption.
CSA: Final thoughts?
Williams: Do not dismiss restructurings or portfolio exits as something that only applies to struggling companies. It is one of the most underutilized tools for growth in retail real estate.
Burden: Exactly. Space is scarce and competition is intense. The companies that prepare and act decisively will move ahead. Those who wait will be left on the sidelines.
