How reliant are malls on department store anchors?
With another round of closings for Macy’s, Sears, Penney’s and Kohl’s, many malls will again be scrambling to fill dark anchors.
Many malls are being converted to mixed-use developments that often include retail as well as hotels, residential and office space. In some cases, developers add experiential features such as outdoor areas, movie theaters or amusement parks. A few are revamping without an anchor department store.
For example, Maryland’s Owings Mills Mall, which opened in 1986, lost a J.C. Penney last month and a Macy’s last year. The property is undergoing a multimillion-dollar revamp that will include a movie theater and restaurants and a greater emphasis on outdoor shopping — but no department store.
“They’re trying to make it more interesting and more experiential,” Jan Rogers Kniffen, a retail consultant, told NPR.
The Fashion Mall in Plantation, FL opened up in 1988 with a Bloomingdale’s, Lord & Taylor and Macy’s as anchors, but the latter closed in 2007. The mall is also converting to a mix of retail, residential and office space with no anchor.
“People are looking for a place to spend time but they don’t want to walk through a mall,” Greg Matus, a commercial real estate expert, told Local 10 ABC News in Florida.
On its first-quarter conference call, officials at Simon Property Group, the nation’s largest mall owner, discounted the media talk of malls or department stores dying.
But a report from real estate research firm Green Street Advisors earlier this year suggested that hundreds of department stores would need to close to help malls reach levels of productivity reached more than a decade ago, promising more empty anchors.
Cedrik Lachance, director of U.S. REIT Research at real estate research firm Green Street told Reuters, “The high-end mall still has a lot to offer to retailers and customers, but many lower-end properties will face sizable challenges in the coming decade and could garner a disproportionate share of headlines.”
- As Their Anchors Sink, Malls Try To Present Retail ‘Experience’ – NPR
- Fashion Mall to be replaced by new retail, residential complex – Local 10 ABC News
- U.S. shopping mall REITs hurt by department store woes – Reuters
- Who says the mall is dead? – San Diego Tribune
- Simon CEO: ‘Flatlining’ economy hurting malls more than failing retailers – Indianapolis Star
- Department store anchors at malls face a new demographic of shopper – Philadelphia Inquirer/TwinCities.com
- Wausau mall workers worry about Sears closure – Wassauh Daily Herald
DISCUSSION QUESTIONS: Are department store anchors essential to malls? Do you see mixed-use developments playing a primary role in reviving malls?