As retailers adapt in the age of digital commerce, major department store chains are scaling back their physical footprint. In fact, several specialty retailers are even abandoning shopping centers outright to shift their focus toward online sales.
Meanwhile, a new day is dawning at Tuesday Morning, which is drawing consumers off the couch and into its aisles with a constantly shifting treasure trove of designer and name-brand closeouts culled from around the world. The Dallas-based retailer’s success has led its real estate executives to add locations and lengthen lease options even as its full-price competitors shutter stores.
At the forefront of this aggressive expansion is Karen Slayton, who serves as Tuesday Morning’s director of real estate for West Coast and Dallas-Fort Worth markets. Slayton is an industry veteran who worked her way up the corporate ladder. She started in a support role in Pier 1 Imports’ real estate department, moving to La Quinta Inns & Suites, and notching nearly a 17-year stint at Michaels Stores, where she served as a real estate coordinator before eventually ascending to the role of senior director of real estate.
“I had to forge my own path,” Slayton recalls. “There wasn’t one that existed to move from a coordinator role up the chain. Basically, it takes a lot of sweat equity as well as determination. Climbing the corporate ladder . . . I’m not sure that’s a good way to put it anymore. It’s more like a jungle gym with one step forward and two steps back, or maybe to the side. You have to be very flexible.”
Some steps were even more of a stretch for Slayton, who completed her bachelor’s degree while at Michaels. She had been working on a course or two at the time when a supervisor said she wouldn’t move farther up the food chain—no matter how much experience and knowledge she accrued—without a degree in hand.
“At the time, I also had two young daughters, and I wanted them to understand how important it is to finish your college degree and instill the importance of hard work,” she says. “They both saw me working full-time, raising a family, and finishing school.”
Her alternate route to success makes Slayton uniquely suited to map a course for expansion at Tuesday Morning, where her team works without a traditional support staff of assistants and real estate coordinators. Slayton and other territorial directors must be just as comfortable on construction sites as they are in conference rooms, since they may be meeting with lawyers and landlords to negotiate deals for new locations or lease revisions for existing stores.
“I know how the person who puts the real estate package together feels,” Slayton explains. “I know exactly what we’re looking for in a letter of intent. When I was a development coordinator, I had to work with both the construction team and the operations team. For me, I’d say coming up through the ranks was a key part of becoming a good dealmaker because you understand everything that goes into the process of doing deals.”
Because she oversees both the West Coast and Dallas-Fort Worth territories, Slayton’s typical day may start at about 7:30 a.m. and end at 7:30 p.m. when she wraps up calls to California. She also spends some days on the road, visiting existing stores and competing retailers, all while trying to shepherd new deals across the finish line. In her first two years with the company, she’s already had more than 70 deals approved.
Slayton relies on a network of brokers with their own web of strong relationships in the real estate industry to keep these expansion opportunities coming since, company-wide, Tuesday Morning hopes to add as many as 90 stores in fiscal year 2017. But not every location is the right fit for the retailer. Some deals inevitably fall through, meaning brokers should always be scouting shopping centers even when they think the project pipeline is flowing smoothly.
“I need those brokers who are hungry for deals, because gone are the days when deals fell into our laps from so many shopping centers being built,” Slayton says.
Tuesday Morning is not only looking to expand into new markets, but also wants to negotiate extended leasing rights for many existing locations. The retailer has also become more selective when it comes to shopping center sites. No longer are brokers seeking 5,000 or 6,000 square feet of space on the back side or in the basement of a shopping center. New locations are much more likely to be in visible areas and triple the size of a typical Tuesday Morning of a decade ago.
“What we’re really working on is making sure we have a casual, easy atmosphere to shop,” Slayton explains. “We could have a great growth program. But if we don’t keep our customers in mind—making it easier for them to shop, having the right merchandise mix, having the right sized store—then we’re doing ourselves a disservice. If we don’t have customers, we don’t have stores.”
Capitol Real Estate Advisors is proud and privileged to have a 20+ year working relationship with Tuesday Morning. Under the leadership of CEO Steve Becker and the direction and guidance of Senior Vice President of Real Estate Doug Sullivan, Karen Slayton along with John Day, Curtis Stogsdill, and the entire real estate team have effectively and precisely executed the company’s vision of the new store prototype with expansions and relocations to superior locations.