Gradual rebound for retail

<p>Orchard Supply Hardware is opening its first store in Santa Rosa next week, a green shoot in a Sonoma County retail landscape suffering an economic dry spell.</p><p>Meanwhile, Kohl's Department Stores will launch new locations in Ukiah, Napa and San Rafael on Sept. 30.</p><p>While the flurry of store openings are good signs, they don't signal a turnaround for the hard-hit retail sector, said Peter O'Brien, a Santa Rosa investment advisor who tracks the North Bay's commercial real estate market.</p><p>"I wouldn't look on it as a sign the market is recovering," he said. In Sonoma County, 9 percent of retail space remains vacant, triple the rate of a few years ago, he said.</p><p>"It's not going to be back for a while," said Tom Laugero, partner with Keegan &amp; Coppin, the North Bay's largest commercial real estate firm. "Retailers are testing the waters, but most of them want to see what their Christmas is like."</p><p>Still, some retailers are grabbing bargain space in prime locations, said Robert Eyler, a Sonoma State University professor who heads the school's Center for Regional Economic Analysis.</p><p>"They want to occupy the space while it's still available at a low price," Eyler said.</p><p>In Orchard Supply's case, a low-cost location can help it compete with home improvement giants Home Depot and Lowe's, he said.</p><p>Sonoma County's retail sector has been battered over the past year, with Mervyns, Gottschalks, Circuit City, Home Depot/Yardbirds and other big-box merchants shutting their doors.</p><p>Department store employment is down almost 20 percent from last summer, according to state labor analysts.</p><p>Orchard Supply is expanding despite the downturn, opening new stores in Santa Rosa and Fairfield this month.</p><p>The do-it-yourself retailer is moving into a 35,000-square-foot space at 2230 Cleveland Ave., a former Circuit City location. It will have a "soft" opening Thursday, followed by a grand opening Oct. 10 and 11.</p><p>Part of Sears Holdings Corp., Orchard Supply has 88 stores in California, including one in Petaluma, and positions itself as a down-home alternative to Home Depot and Lowe's.</p><p>The San Jose-based chain started as a farmers' cooperative in 1931. Orchard Supply's Santa Rosa store features historic photos and signs, colorful wall graphics and an antique Chevrolet pickup truck parked just inside the entrance.</p><p>It has the feel of Yardbirds, the locally-owned hardware chain acquired by Home Depot in 2005.</p><p>"You feel comfortable in here," said store manager Eric Evensen. On Thursday, workers stocked shelves and put finishing touches on the interior.</p><p>The store has about 70 full- and part-time employees, most hired after attending a job fair in July that drew 600 applicants. Orchard Supply carries about 45,000 items in hardware, plumbing, electrical, tools, painting, garden and nursery categories.</p><p>Kohl's is also expanding its presence on the North Coast, moving into former Mervyns locations in Ukiah, Napa and San Rafael. It's part of a major California expansion for the Wisconsin-based department store chain, which is adding 30 stores in the state.</p><p>By the end of this month, Kohl's will have 1,059 stores in the U.S., including 121 in California. Kohl's already has locations in Santa Rosa and Petaluma. The average Kohl's store employs about 140 people.</p><p>With Mervyns, Gottschalks and other rivals gone, Kohl's is in position to grow, Eyler said.</p><p>"Kohl's has a better outlook in terms of competition," he said.</p><p>You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.</p>