Walgreens sizing up several Oahu locations
The drugstore retailer may take over the Tower Records site on Keeaumoku Street
The impending closure of the music retailer Tower Records leaves prime retail space on Oahu for those planning to enter the Hawaii market, namely the major national drugstore chain Walgreen Co.
Deerfield, Ill.-based Walgreens recently won the bid for the Tower Records site on Keeaumoku Street. The bid includes the lot with the Tower store at 611 Keeaumoku St., and another lot facing Kapiolani Boulevard.
"It's not final yet because it's pending approval in bankruptcy court," Walgreens spokeswoman Tiffani Bruce said yesterday. "We are also looking at other locations."
She could not confirm when Walgreens' first Hawaii store would open, but said the company plans to use the existing building. Store employees at the Keeaumoku Tower Records said their last day would be in mid-December.
Besides the Keeaumoku site, Walgreens also bid for 11 Tower Records sites in California and Nevada over the last few months, Bruce said.
New York-based Retail Consulting Services Inc. is selling the leases to Tower stores throughout the nation, including Tower's landmark Sunset Boulevard store in Hollywood.
Sacramento, Calif.-based Tower Records has been selling off its inventory and assets since liquidation firm Great American Group bought it in October.
More competition
The new site for Hawaii's first Walgreens puts it just a short walk across the street from Wal-Mart, which recently announced that it would extend its $4 generic-drug program to Hawaii.
Also nearby at Ala Moana Center is Longs Drug, the state's dominant drugstore chain, with 31 locations statewide. Longs has been in Hawaii for more than 50 years.
Walgreens has more than 5,500 locations across 47 states, the bulk of them in Texas and Illinois, as well as in Puerto Rico. Longs, based in Walnut Creek, Calif., has close to 500 stores nationwide.
Hawaii has room for both businesses, according to Doug Smoyer, president of Retail Strategies.
"I think they (Walgreens) will do very well in this market," Smoyer said. "I don't think they'll force Longs out of the market. ... I think it will take awhile for them to get to know Hawaii and what we buy here."
There is still plenty of customer loyalty for Longs, he said, which can prove beneficial for businesses like City Mill, which managed to do well after Home Depot's arrival in Hawaii.
"We have competition in every market that we enter," Walgreens' Bruce said. "What we hope to do is bring people valuable services, obviously, and we believe that there's a growing need for pharmacy services."
The standard size of a Walgreens on the mainland is about 14,000 square feet, according to Bruce, though there are many smaller stores in urban areas.
The building that houses Tower Records on Keeaumoku Street is 11,000 square feet. Tower Records also occupies about 10,000 square feet at Kahala Mall, where its lease terminates in 2008. Mall manager Ron Yoda said Tower has not informed him of its plans.
Aiea, Windward side
Though Walgreens declined to disclose its other potential locations in Hawaii, the real estate team is expected to put in a bid at Pearl Kai Shopping Center in Aiea, where another Tower Records is closing, as well as a site near the Kaneohe Bay Shopping Center.
Sufficient space is being set aside at Pearl Kai Shopping Center, where several tenants are moving around after renewing their leases. "It's still on the table, but nothing's finalized," property manager Garrett Littman said.
The Tower Records at Pearl Kai allegedly owed a sum of $262,806 in rent, maintenance fees and taxes, according to a lawsuit filed by landowner PCCP/LDC Pearl Kai LLC.
Tower has elected to return the Pearl Kai store to the property owners once its liquidation is complete.
