Primark/Sears Real Estate Deal

The ongoing quest of Sears Holding Corp. to leverage its vast real estate portfolio helped pave the way for British fast-fashion retailer Primark to enter the United States, giving the import access to space in malls throughout the Northeast.

In late 2014, Primark struck a deal with Sears to lease a total of approximately 520,000 sq. ft. in seven Sears mall-based locations. All the space is expected to be delivered to Primark by the end of 2015.

The arrangement is in line with Sears’ desire to make more efficient — and productive — use of its vast square footage in the face of shrinking sales and decreased traffic.

“These lease agreements with Primark illustrate how Sears Holdings is strategically transforming one of the largest retail real estate portfolios in the United States over time while continuing to operate its existing stores in large, but rationalized selling space,” Jeff Stollenwerck, president of real estate for Sears, said in a statement.

In six of the locations, Primark will operate stand-alone stores as a subtenant of Sears. The department store retailer will continue to operate in these locations, but in a smaller footprint.

In the seventh location, King of Prussia Mall in King of Prussia, Pennsylvania, the Sears store will close and Primark will share the space with another Sears sub-tenant, Dick’s Sporting Goods (both operating stand-alone stores).