authorizing (0) (0)    Advanced Search

Follow us @  | 

weather icon

Shanghai

Mostly Cloudy/Haze

°C  | °F 23°C 31°C

Shanghai Daily,上海日报
Latest news:

Home » Business » Consumer

US malls eye replacements for department stores

AS the retail industry churns in the Amazon era, American shopping malls are turning to a new generation of stores, food and entertainment offerings to make up for an exodus of department stores.

Prime mall real estate is increasingly going to players who began online and are graduating to brick-and-mortar, such as plus-size clothing label Eloquii, or stores selling niche items like candy and conflict-free diamonds.

In some cases, these retailers are taking space, literally, from exiting chains like Macy’s.

Other additions include the trendy burger restaurant Shake Shack, and Dave & Buster’s, whose video game and pro-sports viewing restaurants are emblematic of the “experiences, not stuff” mantra now resonant among consumers.

The changes to malls — climate-controlled beacons to American consumerism that grew rapidly in the latter part of the 20th century — are part of a fundamental industry rethink as e-commerce, led by gargantuan purveyors like Amazon, takes market share and alters consumer expectations.

“This isn’t the same culture as 30 years ago,” said retail industry analyst Dana Telsey, who sees today’s moves as the “early innings” of a multi-year evolution.

Malls will endure because they offer “the excitement of being able to see what’s new,” she said. “It’s a meeting place. It’s an entertainment center.”

“You’re always going to have shopping centers that engage,” said Telsey, chief executive of Telsey Advisory Group.

The changing times are a period of reckoning for hundreds of second-tier shopping centers in a country that experts say has long been “overmalled.”

A January review of 1,070 malls in the US by Green Street Advisors, a real estate research and advisory firm, classified more than 330 malls as “at risk to close” due to declining occupancy, low sales, weak socioeconomic demographics and anchor store vacancies.

“These malls only account for roughly five percent of mall value in the US,” the report said. “Most won’t be missed.”

Many of the most vulnerable malls were built in the 1960s and 1970s with department stores as anchors that attracted enough customers to also support secondary stores.

But stores in malls were often pricier than free-standing shops because of the heavy rents for common costs such as heating, maintenance and security, said Fred Hurvitz, professor in retail studies at Penn State University’s Smeal College of Business.

The arrival of e-commerce and greater price transparency means malls must compete not only with Amazon for more cost-conscious customers, but with discount chains.

“You’re seeing a whole movement towards any way you can save the customer money, that’s going to make you more viable with the customer,” Hurvitz said. “Without high traffic levels, the malls die.”

The exodus of retailers means shopping centers that were once hives of activity are hollowed-out shells with a few well-stocked shops surrounded by empty storefronts. Parking lots that were jammed with cars a few decades ago are now mostly empty seas of asphalt.

“It’s a very depressing place,” Nakul Kumar, an economics professor at Bloomsburg University, said of the Columbia Mall in Bloomsburg, Pennsylvania, which just lost its J.C. Penney store.


 

Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend