By Shelly Banjo
When most retailers look for places to open new stores, they
take into account economic indicators like job growth and new home
building. Now, some retailers are considering another data point:
drilling permits.
Home Depot Inc. has all but given up on opening new stores in
the U.S., but the home-improvement retailer made an exception in
January to open a store in an area it said it couldn't pass up:
Minot, N.D., in the heart of the American shale oil and gas
boom.
"If you had said to me seven years ago, you'll be opening a
store in Minot, North Dakota, I would have asked, Why?" Chief
Executive Frank Blake said in an interview. "One of the great
stories of the U.S. is the shale oil development, and it's
happening in areas where we don't have a lot of stores now."
The 100,000 square-foot store is more than a four-hour drive
from Home Depot's nearest location and is the only U.S. store Home
Depot opened in the fiscal year ended Feb. 2.
Home Depot is among a number of retailers including Wal-Mart
Stores Inc. and GameStop Corp. targeting oil and gas towns in North
Dakota, Texas and Louisiana, in an otherwise dour environment for
retail real estate. The rise in online shopping and decline in foot
traffic has led a number of retailers to scale back store
construction and the size of the stores they do build.
Simply Mac, a subsidiary of GameStop Corp. that resells and
repairs Apple Inc. products, targeted two store openings last fall
in the oil and gas boomtowns in the West Texas cities of Midland
and Lubbock.
In one Wal-Mart store in Williston, N.D., hourlong lines led the
retailer to raise wages for cashiers and stock clerks to $17 an
hour and bring in staff from nearby stores and other states.
Wal-Mart said it has since caught up to demand with local
hires.
"We don't have any stores in North Dakota, but I sure wish we
did," said Michael Glazer, CEO of Stage Stores Inc., which operates
around 900 U.S. department stores under the names Bealls, Goody's,
Peebles, Palais Royal and Stage.
Still, Stage is benefiting from the 250 stores it has in Texas,
as well as dozens of outposts in Louisiana and Oklahoma. Stage said
those stores outperformed the rest of its store base in 2012 and
2013, though sales slowed during the winter after a spate of ice
storms blanketed the region.
The department store chain said it monitors employment levels
county by county and uses those numbers to decide where to put new
stores.
"There's a correlation between the energy boom and county
employment rates," Mr. Glazer said. "And wherever energy comes in,
jobs follow and people spend more at our stores."
Write to Shelly Banjo at shelly.banjo@wsj.com
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