Why the Death of Shopping Malls is More than Sopping | Time.com | July 20, 2017

Joe Leandri
Jul 24, 2017 · 3 min read

There are still about 1,100 malls in the U.S. today, but a quarter of them are at risk of closing over the next 5 years, according to estimates from Credit Suisse.

Within and near those malls, there are more than 8,600 stores could close, according to industry estimates, many of them the brand-name anchor outlets that real estate developers once stumbled over themselves to court. Already there have been 5,300 retail closings this year, including Sears, Macy’s, JCPenney and Kmart stores. Sears Holdings — which owns Kmart — said in March that there’s “substantial doubt” it can stay in business altogether, and will close 300 stores this year. In April, Payless Inc. announced it would close 400 of its shoe stores as part of its bankruptcy plan — on top of a separate 400 it had already scheduled to close. The mall staple RadioShack has filed for Chapter 11 twice in two years. So far this year, nine national retail chains have filed for bankruptcy.

Local jobs are a major casualty of what analysts are calling, with only a hint of hyperbole, the retail apocalypse.

Since 2002, department stores have lost 448,000 jobs, a 25% decline, while the number of store closures this year is on pace to surpass the worst depths of the Great Recession. The growth of online retailers, meanwhile, has failed to offset those losses, with the e-commerce sector adding just 178,000 jobs over the past 15 years.

Some of those jobs can be found in the massive distribution centers Amazon has opened across the country, often not too far from malls the company helped shutter. One of them is in Breinigsville, Pa., 45 miles from Schuylkill.

Not all malls are failing, of course, and the ones that are thriving tend to share certain characteristics. Chief among them: luxury. From the 375-store Galleria in Houston to the Shops at Crystals in Las Vegas to the Bal Harbour Shops near Miami, complexes filled with runway brands such as Gucci and Louis Vuitton are reporting healthy revenues. As a greater percentage of America’s wealth is concentrated in a smaller share of its population, these elite malls partly avoid competition with Amazon by catering to those who don’t need to scour for deals.

Others have found success by updating what the best malls have always done: give people a reason to come beyond filling shopping bags. The Grove in Los Angeles has a mini main street and trolley running down its center, meant to evoke an urban boulevard, and hosts a summer concert series. The Palisades Center in West Nyack, N.Y., has a bowling alley, a comedy club and an indoor rope-climbing course. And at a moment when Instagramming one’s meal has become standard practice, malls in cities from Utah to Louisiana are pouring hundreds of thousands of dollars into upscaling their food courts. At Pennsylvania’s King of Prussia Mall, the country’s second largest, Auntie Anne’s now vies with stands hawking avocado toast and sushi burritos.

“Clearly there’s a shake-up going on,” Steven M. Lowy, co-CEO of Westfield, which operates dozens of malls around the world, told the Associated Press. “We understand the need to change and adapt.”

url: http://time.com/4865957/death-and-life-shopping-mall/?xid=newsletter-brief

Joe Leandri

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