Big Lots 2010 Annual Report Download - page 86

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12
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 30,100 square feet, of which an average of 21,600 square feet is selling square feet.
The average cost to open a new store in a leased facility during 2010 was approximately $1.1 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 ten years with multiple five-year renewal options. Seventy-two 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
12 month-to-month leases and 54 owned locations.
Fiscal Year: Expiring
Leases
Leases
Without
Options
2011 ............................ 245 41
2012 ............................ 239 28
2013 ............................ 289 37
2014 ............................ 258 24
2015 ............................ 223 27
Thereafter ....................... 126 9
Warehouse and Distribution
At January 29, 2011, we owned or leased approximately 9.5 million square feet of distribution center and
warehouse space. We own and operate five regional distribution centers strategically placed across the United
States in Ohio, California, Alabama, Oklahoma, and Pennsylvania. In addition to the regional distribution
centers which handle merchandise, we had one warehouse under lease, which expired on January 31, 2011
and had been vacated as of January 29, 2011. The regional 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 regional distribution centers was approximately 2.5 million cartons per week
in 2010. Certain vendors deliver merchandise directly to our stores. We attempt to move merchandise from our
vendors to the sales floor in the most efficient manner.