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Bloomberg News
Athletic-wear retailer The Finish Line Inc., headquartered in Indianapolis, plans to boost capital spending to $85 million this year as it upgrades stores.

Clothing chains spend on new look for stores

– For all the concern that the U.S. economy may be slowing, clothing retailers as varied as Express Inc. and Finish Line Inc. are poised to spend the most on capital improvements since the recession.

Having focused on growing online and internationally in recent years, retailers are accentuating the shopping experience in an effort to boost sales amid increasing online competition.

With consumer spending on the rise, the industry will boost capital spending to $35 billion this year, compared with $29 billion in 2009, according to Fitch Ratings.

“We think the consumer is getting more confidence, and with that, the stores are getting more confident to expand,” said Laura Pomerantz, founder of commercial real estate advisory firm PBS Real Estate in New York.

“Stores have to be entertainment, they have to be service-oriented, which has clearly become very, very important to the consumer.”

Now that they are opening fewer stores, retailers are trying to extract more dollars from each one.

Store designers are striking a balance: making stores more website-like, with mobile check-outs and kiosks, while turning them into hangouts, where shoppers can experience a retailer’s brand in ways they can’t online. They are also finding ways to add merchandise without making stores seem cluttered.

The splurge on stores is lifting the fortunes of design and architecture firms, as well as the suppliers of lighting fixtures, flooring and signage, which lost business after the worst recession since the Great Depression stifled consumer spending.

Retailers spent at least $13.4 billion on interiors last year, according to the non-profit Association for Retail Environments.

Before the recession, retailers typically asked for “tweaks” to their store prototype, and now they’re asking for advice on how to create the “store of the future,” said Lee Peterson, executive vice president of creative services for WD Partners.

The design and architecture company based in Columbus has worked with the likes of New Balance Athletic Shoe Inc. and Abercrombie & Fitch Co.

While U.S. stocks suffered the worst decline since September and last month’s gauges of consumer confidence showed mixed results, the 20-plus chains tracked by researcher Retail Metrics have reported average same-store sales increases every month starting in September 2009.

And though Express shares slid 6.4 percent this year, the Columbus, Ohio, chain is refurbishing 100 of its more than 600 shops in the next three years.

Athletic-wear retailer Finish Line is testing a prototype that boosts collaboration with such brands as Adidas and Nike, and plans to have mobile registers in all its stores this year.

The Indianapolis-based retailer may boost capital expenditures to $85 million from $29 million in its most recent fiscal year, as it refreshes and remodels stores, opens 25 new stores, tests its new store prototype and adds point-of-sale technology, according to a March 30 earnings call.

Aeropostale Inc., the New York-based teen retailer, is in the early stages of redesigning its more than 1,000 stores.

“Our key focus is designing a store that is innovative, fun and inviting, while providing an environment that the kids want to hang out in and stay a while,” Kenneth Ohashi, a company spokesman, said in an email.

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