On March 2nd, after much media speculation, Sports Authority commenced a case under chapter 11 of the United States Bankruptcy Code. In its initial bankruptcy filings, the company’s CFO announced that it will close up to 200 of its 464 stores over the course of the bankruptcy case. Sports Authority has already commenced liquidation sales at 87 of its stores, and may add up to an additional 60 stores within the next few weeks. As a result, we are in the throes of the first large-scale liquidation of a national anchor retail tenant since Borders closed its doors in 2011. Landlords will be searching for unique opportunities to fill any vacancies and enhance existing tenant mixes, and the current Millennial-driven retail market may deliver.

The Millennial generation, defined as people born between 1982 and 2004, is one of the largest generations in history. Millennials love to shop and it’s estimated that the generation’s spending will hit $1.4 trillion per year, or about 30% of all retail sales, by 2020. Most Millennials came of age in a post-recession economy with a smartphone in hand. The confluence of these two factors means that Millennials place a greater importance on price than on certain other traditionally important factors when shopping (including brand and service), and they use technology to compare prices in real time to ensure they are getting the best deals. To thrive in today’s economy, retailers must capture the attention of these savvy consumers, who are now driving market trends.

Enter the off-price segment. Traditional off-price stores, such as TJ Maxx, Ross and Burlington Coat Factory, have maintained strong sales subsequent to the economic downturn. Other retailers are following suit. Department-store spinoffs such as Nordstrom Rack, Macy’s Backstage, Saks Fifth Avenue OFF 5TH and, most recently, Find @ Lord & Taylor are rapidly increasing their market presence. In the six years between 2009 and 2015, Nordstrom added 109 Nordstrom Rack locations and Saks brought 28 OFF 5TH stores to market, while during the same period drastically reduced the number of full-line stores opened.

Perhaps more than good deals, Millennials love – and demand – convenience and an enhanced shopping experience. Off-price retailers are attracting Millennials by increasing in-store technology, offering high quality merchandise at reduced costs and customizing the in-person shopping experience. To improve the in-store shopping experience, the prototypical footprint for an off-price spinoff store is significantly smaller and more flexible than that of its big sister store. For instance, a typical Macy’s Backstage is approximately 30,000 square feet and a typical Nordstrom Rack is between 30,000 and 40,000 square feet, each approximately one-fifth the size of its full-line counterpart. Since a full-line Sports Authority store is typically approximately 40,000 square feet, those spaces would be suitable for off-price replacement tenants. In contrast to the aftermath of the 2011 Borders liquidation, which left many big box spaces vacant for years to follow, today’s market offers Sports Authority’s landlords greater opportunities. The continued growth of the Millennial-driven, off-price retail market will be critical to those landlords’ success.