Industrial Parks and Commercial Real Estate and Commercial Leases and Real estate deals and Real Estate & Retail

Texas firm plans to move into Franklin distribution building

February 14, 2012

Johnson County economic development officials are thrilled that a company is moving into a Franklin distribution building just a month after Best Buy Co. vacated it.

About 220 Best Buy employees were left jobless by the closing. But Amarillo, Texas-based music wholesaler Anderson Merchandisers LP has confirmed to the Daily Journal in Franklin that the company expects to move into the 703,000-square-foot warehouse.

“It’s a great thing for Franklin,” said Cheryl Morphew, CEO of the Johnson County Development Corp. “And my hope is that since it’s the same kind of work that Best Buy was doing in that facility, this will be a nice backfill [for the jobs that were lost].”
 
It’s unclear, though, when the facility might reopen or how many workers Anderson Merchandising might employ there. Company spokesman Mike Cohen didn’t return phone calls from IBJ.

In a prepared statement to the Franklin newspaper, he said: “While still in the planning stages, we anticipate operating out of the Franklin facility once operated by Best Buy.”

County officials, however, have not been contacted by Anderson Merchandisers about its plans to establish operations in Franklin. No one from the company has contacted JCDC or the city of Franklin about pursuing tax incentives or work-force training grants, Morphew said.

“They’ve been very quiet, or so they thought,” she said, referring to online job postings from the company.

Best Buy had for months been trying to lease or sell its warehouse at 2001 Commerce Parkway. Built in 1994, the property was listed by commercial real estate brokerage Cassidy Turley for $15.4 million. Listing brokers didn’t return phone calls from IBJ, but Morphew said she thinks Anderson Merchandising purchased the building from Best Buy.

Anderson Merchandisers is the nation’s largest music wholesaler, supplying Wal-Mart, Sam’s Club, Best Buy and the Army and Air Force Exchange Service.

The distribution facility in Franklin should serve Anderson Merchandisers well following its deal to pick up New York-based Sony DADC Americas’ distribution agreements filled from a plant in Fishers.

Sony DADC announced Feb. 10 that it will start shutting down its Fishers distribution facility in May and lay off all 248 workers by September.

The distribution center handles compact discs for EMI Music, Universal Music and Sony Music. It's shutting down because of continuing economic challenges, a Sony spokeswoman said.

Compact disc sales have fallen dramatically in recent years as more consumers switched to digital downloads to listen to music. Industry experts say digital downloads—mostly purchased on iTunes—will outsell music CDs for the first time in 2012.

Sony DADC is a division of New York-based Sony Corporation of America, a subsidiary of Tokyo-based Sony Corp.

Falling sales of compact discs undoubtedly is hurting Best Buy as well.


The closing of its Franklin distribution center occurred sooner than expected. The Minneapolis-based appliance and electronics retailer had notified the Indiana Department of Workforce Development in May that it would shut down the facility by the end of March 2012.

The facility employed almost 1,000 people eight years ago. In 2004, Best Buy laid off 415 employees—nearly half the work force at the time.
 

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