REI to take Whole Foods space
Source: Austin Business Journal
Mary Alice Kaspar, Austin Business Journal Staff

Outdoor retailer Recreational Equipment Inc., better known as REI, is in the final stages of negotiating leasing space at the current Whole Foods site in downtown Austin.

If negotiations are successful, it will open in the fall of 2005, marking Seattle, Wash.-based REI's second location in Austin, according to REI.

It also will mark the closest operation to a local competitor, Austin-based Whole Earth Provision Co., which has a store just north of the Whole Foods site at Sixth Street and Lamar Boulevard.

Whole Earth co-owner Joe Jones says he has heard of REI's impending arrival and says his stores will continue business as usual.

"They're not the competition they used to be for us," Jones says. "We don't sell the same things as much as we used to."

Jones says REI focuses on the middle-market while Whole Earth is more of a specialty outdoor retailer.

Even still, the two stores still have some products that overlap, Jones says.

"It's bound to have some effect, but it's not going to affect all our stores in all our cities," Jones says, adding Whole Earth has a total of eight stores.

Room for REI will be made thanks to Austin-based Whole Foods Market Inc. [Nasdaq: WFMI], which is in the process of building a new 80,000-square-foot grocery store and 200,000-square-foot corporate headquarters immediately south of its current flagship store downtown.

Austin-based Schlosser Development Corp. is developing the new site and planning to redevelop the current one -- where REI hopes to be.

REI and Whole Foods also are located next to each other in the Gateway shopping center in North Austin.

The REI store will be 22,500-square-feet and span two stories next to BookPeople, a local bookstore.

The new store will employ 50 full- and part-time staff and provide REI's full line of outdoor gear and clothing for camping, climbing, cycling, hiking, paddling, snow sports and travel. It will offer top outdoor brands including REI's own line of gear and apparel. A gear rental department will encourage people to try outdoor sports.

Eric DeJernett, retail specialist with Austin-based NAI Commercial Industrial Properties Co., explains REI's history in Austin.

REI's original location was in downtown Austin off Lamar, but moved out to the Arboretum area as it was developed.

"Now the retailers are looking to come back into the Central area ... Their clients are there and the demand for retail in Central Austin is very strong -- we just haven't had the product," DeJernett says.

Click here for list of all news items.