Remember when the shopping mall was THE place to be?  One could have it all – clothing, sporting goods, home goods, shoes, even check out the latest movie.  Big-name department stores anchored each end of the mall, and smaller specialty shops filled all of the spaces in between.  You could eat at your favorite fast-food outlet or grab a snack from a nationally-known kiosk.  The mall was also a social gathering place.  Teens flocked there – to see and be seen.  Families met families and chatted between shopping destinations.  During the holidays, the walkways were crowded as shoppers rushed from store to store, their arms filled with bags of merchandise.

That was then.

These days, brick-and-mortar stores all over the country are going out of business at an alarming rate, and like an infection of emptiness, the shopping mall is trying to fight off the disease – and losing.  Large, centralized shopping malls are becoming an endangered species, replaced by regional and community shopping plazas and/or outlet stores.  The square footage of each store is also smaller, as even the smallest retailer finds an online presence to be a necessity to survive.  Online retailers are brutally weeding out traditional shopping venues, and traditional department stores are becoming merely showrooms, as shoppers go to somewhere like Best Buy to “see” the merchandise, then return home and order it from an online retailer at a cheaper price.

According to recent statistics, an astounding 49 million square feet of retail space has closed so far in 2017[1].  That’s already more than in all of 2008 (at the height of the financial crisis).  It is estimated that over 8600 retail locations will close by the end of 2017.  Former retail giants such as Radio Shack, Payless, Sears, JCPenney, Rue 21, Staples, CVS, and Gander Mountain – these and many more have already announced massive store closures in 2017 (and other retailers are expected to follow suit as the year progresses).

That’s terrible news if you own shares in a Real Estate Investment Trust (REIT) or are a corporation that rents out retail space in general.

Need a local example?  The Valley Mall in Hagerstown will soon be down to only two anchor stores, as Macy’s closed its doors last year and Sears has just announced it is closing down by the end of September.  With JCPenney hanging on by a thread (and its retail death probably imminent), that would leave only one anchor store (Bon-Ton) at the local mall.  The store line-up within the mall itself is also ever-changing, as retailers come and go as surely as the seasons.  Well-known brands have been replaced by smaller start-ups.  These days, the mall landscape is littered with cell-phone kiosks, an empty food court, and seniors looking for a covered place to walk in the early mornings. The lone exception of stability at the Valley Mall is Long John Silvers, which has occupied the same location at the mall since it opened in the 1970’s (and either must have made a deal with Satan himself to stay in business or their management has compromising pictures of some mall executive that they threaten to release every year).  I don’t understand how they stay alive – but there they are, almost 40 years later – still plugging along.

Are we witnessing the death of the mall as we know it?  It sure looks like it to me.

On the bright side – they’ll be plenty of good parking spots.

 

 

[1] “The Retail Bubble Has Now Burst”, article from zerohedge.com, http://www.zerohedge.com/news/2017-04-22/retail-bubble-has-now-burst-record-8640-stores-are-closing-2017, accessed on 6/27/17