With Department Stores Disappearing, Malls Could Be Next

[Zorro]

Brick-and-mortar retail was in the midst of seismic changes even before the pandemic. Analysts say as much as a quarter of America’s malls may close in the next five years.

The directory map for the Northfield Square Mall in Bourbonnais, Ill., has three glaring spaces where large department stores once stood. Soon there will be a fourth vacancy, now that J.C. Penney is liquidating stores after filing for bankruptcy.

With so much empty space and brick-and-mortar retail in the midst of seismic changes even before the pandemic hit, the mall’s owners have been talking with local officials about identifying a “higher and better use for the site,” though they have declined to elaborate on what that could be.

“Filling in one anchor space, generally, is doable,” said Elliot Nassim, president of Mason Asset Management, which co-owns the Northfield Square Mall and dozens of other enclosed shopping centers. “But once you get hit by two others and you’re dealing with three anchor closures, that’s usually where we become a little more likely to put it into the bucket of a redevelopment.”

The standard American mall — with its vast parking lots, escalators and air conditioning, and an atmosphere heavy on perfume samples and the scent of Mrs. Fields cookies — was built around department stores. But the pandemic has been devastating for the retail industry and many of those stores are disappearing at a rapid clip. Some chains are unable to pay rent and prominent department store chains including Neiman Marcus, as well as J.C. Penney, have filed for bankruptcy protection. As they close stores, it could cause other tenants to abandon malls at the same time as large specialty chains like Victoria’s Secret are shrinking.

https://www.nytimes.com/2020/07/05/business/coronavirus-malls-department-stores-bankruptcy.html

[bluedye33139]

1. My little town lost all its department stores

Shopko, Kmart, a small West coast chain, Macy's, Sears, and 3 weeks ago JCPenney announced they would be closing.

The mall probably will be demolished or the interior will be switched over for other businesses. At this point, it literally is a Claire's and a GNC and two other stores.

I think the reasons are complex, but it makes me sad.

[Takket]

6. GNC just filed for bankrupcy and announced their stores are closing.........

[a kennedy]

26. My husband's favorite stores were K-Mart and shopko.

They both are gone from two cities close to us, one in Wisconsin, and one in Minnesota. He’s sick they are gone. One Penney's is gone, and the 2nd one is going to be. It is so sad.......

[PTWB]

2. No big loss.

The malls should be converted into affordable housing, community centers, jobs training locations, etc. We do not need archaic monuments to capitalistic excess.

[Nature Man]

3. They'll put in psycho churches

and shit stores.

[onethatcares]

8. monster truck pulls are nice

but that's a pretty transient business now that the sports stadiums aren't needed.

[no_hypocrisy]

4. Paramus, New Jersey is all about malls. The town has 4-5 of them.

The tax base is quite dependent upon their survival.

[zipplewrath]

5. Urban Malls

There are some malls that are booming. They always seem to be in urban areas with high densities. I've seen massive expansions of existing malls. Alternately, I've seen large malls completely collapse. And not just malls but large shopping centers that are now completely empty. Something is happening, and I'm not sure anyone really understands it.

[HotTeaBag]

7. Amazon happened.

And unless you are a massive retailer you've got no hope of being able to catch up.

If a Walmart or Home Depot was an anchor store to a mall it would stand a very good chance of doing very well - the malls that had JCPenney or Sears as their main attraction are long gone.

[zipplewrath]

9. Very notable exceptions

Like I say, there are huge exceptions and I can't really figure it out. On line sales aren't large enough to explain the realignment. I suspect there is an economic shift occurring where the wealth is getting overly concentrated causing a large portion of the population to have severe restrictions on their disposable income. I suspect that malls and shopping centers need large concentrations of people, especially people higher up the economic ladder.

[HotTeaBag]

11. Online sales explain it very well.

And you may be over-thinking it. Consumer confidence has been steadily rising since 2012 until the first quarter of this year for obvious reasons.

The shift from having to go to a mall (which isn't particularly pleasant once you've reached your 18th birthday) to being able to get whatever you want, whenever you want it from your couch, while walking your dog or (if you have a water-proof phone) while taking a shower - or even more simply - asking Alexa to order it for you has completely changed the landscape of retail.

The malls that will continue to do well are going to be in upscale areas that cater to wealthy people with 'exclusive' outlets - the malls I grew up with are quite literally not there anymore.

[zipplewrath]

15. They don't compare

If you look at the totality of online commerce and compare it to the apparent loss of retail activity, there's been more loss than internet sales can represent. People are either spending money on something else, or they're spending less.

[HotTeaBag]

16. The mall experience is generally an awful one which could be a contributing factor

but overall, e-commerce is still the driving factor:

https://www.retaildive.com/news/e-commerce-could-kill-30k-stores-and-half-a-million-jobs-by-2025/570950/

[zipplewrath]

21. Its A factor

And yes, malls in many places have been losing out to big box anchored shopping centers. But like I say, after last Christmas, someone pointed out that the volume of online sales was smaller than the losses in retail. Money is going somewhere.

[Demovictory9]

19. so much of mall shopping was for women's clothing. "fast fashion" has caused a plummet in the price

of clothing. I can get a pile of clothing for what I once spent on a good dress or women's suit.

[Midnight Writer]

13. Penneys and Sears messed up. They had a deliver on order business in hand and abandoned it.

Remember their catalogs? All they had to do was adapt to the Internet and they would be the ones in the catbird seat today.

[HotTeaBag]

14. I. Loved. The. Sears. Catalog.

And I completely agree with you.

[Demovictory9]

20. as a child.. the Christmas catalogs (Sears and Wards) - would read every page

[Wellstone ruled]

10. Have been watching as to how this shakes out in

next 90-120 days. Watch for Simon Properties to do a Chapter 11 first,followed by Brookfield Properties. The biggee will be Mall of America or King of Prussia . Believe both are in the Billions of Rents in Arrears as well as Billions in leveraged Bond and Mortgages that are past due.

Can not believe General Growth has not gone Liquidation. Here in Vegas so many of their Strip Malls are in the process of of Retail Vacancies either Vacant or are being emptied this weekend.

[Ron Green]

12. Malls were always a bad idea.

Privatization of the public market space, built to a finished (and therefore inflexible) state, car-dependent, and instrumental in the triumph of consumerism over citizenship.

[Buckeyeblue]

24. Yep. And no way to differentiate your brand

I remember going into the Ralph Lauren stand alone stores back in the 90's. They sold you a lifestyle that you can't get in a mall.

I've stayed at the Florida Mall Hotel i Orlando several times. That mall is massive. When I walk around it, I can't remember one store from the other. It's all sensory overload.

[Tink41]

17. In the late 80's I worked at a JcPenney catalog call center

The pay was great. That being said I haven't stepped inside a brick and mortar store (except hardware, grocery) in years. 5 or more. I
haven't been inside a mall in at least 12 yrs. Was never a shopper, always stuck to need vs want. I'm not a fan of keeping up w neighbors, friends. The less exposure to retail goods, the less likely to spend.

[Demovictory9]

18. kick

my buying habits have changed, contributing to the death of malls but I have branched out beyond Amazon... buying online from JC penney, Kohls and other large dept stores.

I just don't have the desire to trek around a mall... I vaguely remember when it was fun. The mall was America's mainstreet, the internet replaced it.

I do go to malls for the restaurants though. my local malls are converting to focus on restaurants

[zipplewrath]

22. Entertainment centers

There seems to be an attempt to convert some onto entertainment centers with restaurants, bars, theaters and the like. I've also noted a trend of building apartments in and around them.

[Demovictory9]

23. yes! restaurants that have mutli TV screens with sports playing, serve alcohol, bar atmosphere

my local mall was renovated around that idea. and it has a Whole Foods and Costco.
and apartments above it.

[Raine]

25. I haven't got time or the desire to spend wandering around in a mall anymore. 😖 nt