Big Lots 2008 Annual Report Download - page 79

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11
ITEM 2. PROPERTIES
Retail Operations
All of our stores are located in the United States, predominantly in strip shopping centers, and have an average
store size of approximately 29,800 square feet, of which an average of 21,400 square feet is selling square feet.
The average cost to open a new store in a leased facility during 2008 was approximately $1.0 million, including
cost of inventory. Except for 54 owned sites, all of our stores are leased. In 2008, we acquired, for $8.6 million,
two store properties we were previously leasing. The 54 owned stores are located in the following states:
State
Stores
Owned
Arizona .................................... 3
California .................................. 39
Colorado ................................... 3
Florida ..................................... 2
Louisiana ................................... 1
New Mexico ................................ 2
Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Texas ...................................... 3
Total ................................... 54
Store leases generally obligate us for fixed monthly rental payments plus the payment, in most cases, of our
applicable portion of real estate taxes, common area maintenance costs (“CAM”), and property insurance. Some
leases require the payment of a percentage of sales in addition to minimum rent. Such payments generally are
required only when sales exceed a specified level. Our typical store lease is for an initial minimum term of five
to 10 years with multiple five-year renewal options. Sixty-one store leases have sales termination clauses which
can result in our exiting a location at our option if certain sales volume results are not achieved.
The following table summarizes the number of store lease expirations in each of the next five fiscal years and
the total thereafter. In addition, as stated above, many of our store leases have renewal options. The table also
includes the number of leases that are scheduled to expire each year that do not have a renewal option. The
information includes stores with more than one lease and leases for stores not yet open. It excludes 11 month-to-
month leases and 54 owned locations.
Fiscal Year:
Expiring
Leases
Leases
Without
Options
2009 ...................................... 247 45
2010 ....................................... 249 45
2011 ....................................... 237 31
2012 ....................................... 182 19
2013 ....................................... 237 31
Thereafter .................................. 152 12
Warehouse and Distribution
At January 31, 2009, we own or lease approximately 10.2 million square feet of distribution center and
warehouse space. We operated five regional closeout distribution centers strategically placed across the United
States and a furniture distribution center in California. Our regional closeout distribution centers are owned
and located in Ohio, California, Alabama, Oklahoma, and Pennsylvania. In addition to these merchandise
distribution centers, we own or lease warehouses in Ohio and California that distribute store fixtures and
supplies. The regional closeout distribution centers utilize warehouse management technology, which enables
high accuracy and efficient processing of merchandise from vendors to our retail stores. The combined output of
our merchandise distribution facilities was approximately 2.5 million cartons per week in 2008. Certain vendors
deliver merchandise directly to our stores. We attempt to get merchandise from our vendors to the sales floor in
the most effective manner.