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Massaging away retail roadblocks

By MARK ALBRIGHT
Published May 25, 2006

St. Petersburg Times retail writer Mark Albright is reporting from Las Vegas, where he came across a new way to sell massage therapy, concerns about Florida's windstorm insurance poisoning the state's business climate, and teaser parking spaces.

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The massage therapy boom has spawned its first storefront chain that sells memberships for discounted service just like health clubs.

"After 3,000 years, the massage industry is finally getting organized,'' said John Leonesio, founder and chief executive officer of Massage Envy, a fast-growing franchiser with storefront clinics in South Tampa and Palm Harbor and a third about to open in Brandon.

The 4-year-old Scottsdale, Ariz., chain, which opens its 100th store this week in Naples, was named one of the nation's five hottest retail tenants by shopping center landlords.

Usually, the list is dominated by the store catering to the latest apparel or merchandise trends. Indeed, other winners this year are Justice - Just for Girls, an offshoot of the Limited, Too, for preteens; gourmet tea shop Teavana; Cititrends, a chain of budget apparel stores found in low-income neighborhoods; and Muttpropolis, a gourmet pampered pet shop that sells Jimmy Chew squeaky toys, Chewy Vuitton squeaky purses and a Sniffany & Co. gift box.

In contrast, Massage Envy is selling massages at below the going rate if members agree to buy them in a sharply discounted package that runs six to 12 months.

"We bring discounting and convenience to an industry that has little of either, plus our memberships are good at any of our clinics around the country,'' said Leonesio.

Stores, which are open seven days a week and 8 a.m. until 10 p.m. weekdays, are little more than 12 small massage rooms.

The difference is all the therapists are employees who earn health benefit and about $30 per massage, including tips. Most therapists today are independent contractors, many renting space in places such as spas and struggling to build a steady steam of customers.

While interest in massage therapies for fitness or as a stress-reduction indulgence has risen steadily, the number of therapists seeking a higher skilled job has grown far faster. The number of schools tripled to 1,300 since 1990. About 64,000 newly minted therapists were unleashed on the market last year.

"They get little training in actually running a business, so that's where we come in,'' said Leonisio, whose franchises cost about as much to set up as a Subway sandwich shop.

Money, but no insurance

In an environment of rising interest rates, retail development experts are getting wary about how much longer the robust economy can be sustained.

Word here is there is still no shortage of cash from investors interested in buying new retail properties, even as the housing market slows down.

Most likely, shopping center development will slow down later this year nationally as retailers trim store growth once gas prices and other rising expenses moderate consumer spending.

"This has been a hot industry, but you are not going to see the kind of growth we have been seeing,'' said Michael Bilerman, a securities analyst who tracks the REIT industry for Citigroup.

"In Florida, retailing follows new housing, so we shouldn't be too affected,'' said Lee Arnold, the owner of Clearwater-based Colliers Arnold, a real estate investment company. "What's really a much bigger threat for us in Florida is the pricing and nonavailability of windstorm insurance for business going into the hurricane season. I don't think legislators have any idea how serious this is for business.''

Arnold has been told to expect tripled rates laced with reduced coverage in the form of far higher deductibles and fewer covered events.

"It's frightening,'' said Craig Sher, chief executive officer of St. Petersburg-based Sembler Co. "After our rates doubled over the past couple of years, we just learned they are going to quadruple. I cannot pass it all to my tenants without seriously affecting the health of their business.''

TRENDY PARKING

The latest shopping center fad - imitation Main Streets - now comes equipped with on-street parallel parking. And the Shops at Wiregrass Ranch in Wesley Chapel will be no exception.

The idea is for first-time shoppers to drive around the six-block center's streets - all accented with big speed bumps - to get oriented while trying to score a parking space right where they intend to shop.

"It's called teaser parking,'' said Jim Richardson, who is guiding the project for Forest City Enterprises Inc.

That's because with only 200 on-street spaces, there are fewer than two spaces per store.

Repeat customers no doubt will get their fill of driving in this form of "new urbanism'' quickly and steer directly to the sprawling 3,000-space parking lot surrounding Main Street.

Mark Albright can be reached at albright@sptimes.com or 727 893-8252.

[Last modified May 25, 2006, 05:50:22]