The American shopping experience is heading for a radical transformation as malls across the nation face up to the retreat of retail giants that have kept them in business for generations.
Macy’s has begun shuttering 150 of its stores as consumers increasingly turn to online shopping and budget retailers.
And other big names including Dillards, JCPenney and Neiman Marcus have joined the exodus, leaving many retail parks without the anchor tenants on which they depend.
Experts have warned that many malls will go to the wall as they struggle to find replacements for their ‘big box’ tenants, and that those which survive will have to drastically improve their appeal.
‘If it’s in a really bad location where no one wants to spend money to knock it down, then it could rot,’ said Chris Wimmer of Fitch Ratings.
The disappearance of anchor tenants such as Macy’s spells doom for hundreds of malls across the US in the face of increased online shopping, analysts have warned
But some are bucking the trend as they diversify into entertainment, food and fitness
Macy’s had already closed a third of its stores in just ten years when it announced it was accelerating the process in February.
By 2026 there will be just 350 outlets left in the US as it concentrates on its more profitable Bloomingdale’s and Bluemercury retail brands.
Neiman Marcus and JCPenney have both filed for Chapter 11 bankruptcy protection, and fellow chain Sears now has only a dozen stores across the country – after boasting over 4,000 stores as recently as 2012.
Few tenants are big enough to fill the empty outlets they leave behind with Macy’s stores usually ranging upwards to 200,000 square feet.
The number of malls has already fallen by nearly half to 593 in the last eight years, according to NBC business, but those that have survived are already showing the shape of things to come.
Mall owner Brookfield Properties has been busy refashioning more than 100 of the vast retail halls into smaller outlets, spending $2 billion in little more than a decade.
Since Macy’s left San Francisco’s Stonestown Galleria the mall has gained a Whole Foods, movie theater, sports store and health center.
And Tysons Galleria outside DC has actually got bigger since Macy’s shut up shop with a new wing hosting a bowling alley, movie theatre, more restaurants and a showroom for the electric cars of Lucid Motors.
Earlier this week the NHL franchise Utah Hockey Club ensured the survival of one mall outside Salt Lake City when work began at its new training facility on the site of a departed Macy’s
Existing outlets will operate alongside the club on the 111 acre site when it opens next year
Household names closed hundreds of outlets in 2023 alone as changed shopping habits continue to wreak havoc on the retail landsca
‘There’s a collective challenge to get people off the couch and out of the house,’ said Brookfield’s chief development officer Adam Tritt.
‘We are able to break it down into smaller digestible pieces, so that as trends move and communities evolve we are able to respond more quickly.’
Others have refashioned old stores into new homes, and added attractions including laser tag and rock climbing.
Adam Tritt Chief Development Officer at Brookfield Properties
Malls with a low occupancy rate have been disappearing far faster than those which have kept their anchor tenants, but Wimmer said that developers have been ‘itching to get their hands on their Macy’s’ in malls with better locations.
‘Low quality malls really don’t need to exist anymore,’ he added.
Legacy West in Plano, Texas has attracted luxury brands including Louis Vitton since transforming its empty retail spaces into food halls
‘We said instead of going after a department store, let’s do something that’s more fun and more interesting and that will drive a lot of traffic,’ developer Mark Masinter told The Wall Street Journal.
Two dozen bars and restaurants, live music and a brewery now attract 30,000 visitors a week to the mall.
‘Young customers aren’t shopping at malls and they aren’t shopping at department stores in the same way they used to,’ said Stenn Parton of owner Prism.
And some former malls now bear vivid witness to the havoc that the rise of online shopping has wrought on the retail sector.
The once thriving Randall Park Mall in Northeast Ohio used to be home to retail stalwarts including Dillards, JCPenney and Macy’s.
Now a vast Amazon fulfillment center sits on the site catering to its former customers, and the online giant moved onto the site of another fallen mall in Baton Rouge, Louisiana, earlier this summer.
But one mall near Salt Lake City in Utah survived the departure of its Macy’s when the NHL’s Utah Hockey Club came up with a plan to redevelop the space at its new training facility.
‘I’m so happy that the mall will continue to operate,’ Sandy Mayor Monica Zoltanski told Fox13 as work at the Utah Hockey Club site began on Monday
Major department stores such as Macy’s and JCPenney were one the lifeblood of shopping malls, attracting shoppers and keeping neighboring retailers afloat
Malls such as this one in Plano, Texas – are opting to turn their retail spaces experienced based attractions such as ritzy food halls to bring in visitors
‘I’m so happy that the mall will continue to operate,’ Sandy Mayor Monica Zoltanski told Fox13 as work at the site began on Monday.
‘The businesses will continue to operate and they’re going to have a shot of economic, just a super blast of economic energy that will be driven by the arrival of the Utah Hockey Club.
‘What makes malls and shopping centers in America successful, those who are resilient that can plan and adapt to new consumer habits, changing business models.
‘And we’ll see that here at South Town mall, and I welcome that future.’
