There's a terrifying mall 'blight' threatening communities across America: One in six malls expected to disappear in next decade

[SirLinksALot]

SOURCE: BUSINESS INSIDER

URL: http://www.businessinsider.com/what-will-happen-when-malls-shut-down-in-america-2016-9

by: Ashley Lutz


 One in six American malls are expected to disappear in the next decade. That's scary news for many communities.

Visits to malls declined by 50% between 2010 and 2013, according to real estate research firm Cushman & Wakefield. Analysts expect upcoming data will show an even steeper drop in mall traffic.

Mall closures could have terrifying implications for communities, Howard Davidowitz, chairman of Davidowitz & Associates, a national retail-consulting and investment-banking firm, told Business Insider.

[img width = 500]http://pbs.twimg.com/media/CreApt9XgAQkoqe.jpg:small[/img]


The Canton Centre Mall in Canton, Ohio is boarded up and vacant

About 15% of malls will disappear in the next decade, according to a study by Green Street Advisors. That means hundreds of malls will close down, potentially affecting thousands and thousands of jobs. 

 "When a mall closes, it's a blight in the community for a very long time," Davidowitz said in a telephone interview. "Empty stores mean ugly holes where jobs are lost and taxes aren't paid."

While there has been speculation that shuttered department stores will be replaced by new businesses like e-commerce warehouses, medical clinics, and gyms, Davidowitz says it will take a decade for these spaces to be filled.

"The jobs that will be lost will take 10 years to replace," he said. "In the mean time you have people who are out of work, which will hurt the middle class even more." 

 Malls are typically economic centers that pay high taxes and employ a lot of people. When they shut down, the whole community feels the impact.

Macy's just announced it is closing 100 stores, following similar announcements from Sears and JCPenney.

Fewer "anchor stores" in malls also spells even more trouble for specialty stores like Gap and Abercrombie & Fitch. Many Americans visit a mall intending to go to department stores, then stop in other stores once they're there.

There are numerous reasons for the brick-and-mortar apparel industry's decline.

Americans are increasingly choosing to spend on technology and experiences like vacations, leaving less money for apparel. This has led to a spike in discount retailers like TJ Maxx. When people do shop at traditional full-price retailers, they increasingly prefer to do so online.

Davidowitz says America has too many stores, and more shut-downs are inevitable.

"America has five times more square foot of shopping per person than any other country," he said. "We're so overstored it's ridiculous." 


MOD3: resized photos.

[truth_seeker]

A vacant or underutilized shopping mall is the result of OTHER economic problems.

In my vibrant, economically diverse, growing county of over 3 million, old malls are being rezoned for free market, housing.

[GtHawk]

A vacant or underutilized shopping mall is the result of OTHER economic problems.

In my vibrant, economically diverse, growing county of over 3 million, old malls are being rezoned for free market, housing.

Well if you've been around long enough you saw what happened to the malls in Buena Park, Cerritos and The City in Garden grove. They took fairly thriving open air malls and closed them over into ugly noisy holes which people hated and ended up losing traffic and businesses. Only the the Garden grove mall was completely levelled and rebuilt as an open air mall which is successful. The other trend that I personally find abhorrent are all the behemoth mixed residential retail properties that are springing up in Anaheim, Huntington Beach, Buena Park, L.A., hell all over. Of course good for my SIL who is running the construction of a huge one in L.A. I think it's insane to put so many people in such a small are where the roads were not designed for or capable of handling all the extra traffic, it makes for really bad travel times. I see you are nearby, Long Beach? I don't know how much of this new hi rise construction is happening near you.

[Jazzhead]

Internet sales have certainly hurt malls, as they have bricks and mortar retailing generally.    The internet offers sit-on-your-ass convenience;  the old paradigm of the mall tries to market shopping as an experience in itself (or at least enhance the convenience and utility of shopping (a lot of stores in one place, walkable,  in some cases covered from inclement weather,  and usually safe because protected by private security, etc.)

Here in the Philly area,  at least one major mall has survived and thrived while adhering to its original paradigm  (Cherry Hill Mall),  and other grown to become the second or third biggest mall in America (King of Prussia) .   Others have withered and closed,  others have staggered,  been repurposed, and survived.  The Moorestown Mall lurches along,  both helped and hurt by the huge big-box complex that now surrounds it.   A lot of the mall glut is being cleaned out, and are being repurposed as fitness centers,  urgent care centers,  and organic markets.   "Full-price" retail anchors are being replaced by 'outlet"-style stores and larger-footprint specialty retailers.

[DCPatriot]

If said malls are anchored by J.C. Penney or Sears...I can understand it.

Predict that some of them will be converted to "Off Price" outlets.   

[IsailedawayfromFR]

Mall closures could have terrifying implications for communities, Howard Davidowitz, chairman of Davidowitz & Associates, a national retail-consulting and investment-banking firm, told Business Insider.

'Terrifying' negative aspects likely equal to the 'Gratifying' positive aspects of them being built in the first place.
I believe the loss of sales tax revenue is the most terrifying aspect of them closing down.

The rest of the community/state/country is positively influenced by the loss of an inefficient and dated commerce business.

[Wingnut]

They will make for nice Mosque's. 

[mountaineer]

Given the demographics, perhaps they should be replaced by nursing homes. 

[Oceander]

Just more evidence of the paradigm changing effects of the internet.  Give the locals in these areas the choice between giving up online shopping and keeping the malls, and I doubt you'll see the malls come back.  I have no doubt that many of the locals who bemoan the loss of the malls do plenty of online shopping - they're simply too fixated on the trees to see the forest, and their role in planting it.

It most likely also has to do with the fact that most online retailers don't collect sales tax (most cannot be forced because Supreme Court precedent basically requires some physical presence in a state before that state can force an out-of-state retailer to collect its sales tax).  Local brick-and-mortar retailers cannot escape the requirement that they collect the tax.

This sounds a little like the motel "blight" that cropped up in the 60s and 70s as the interstates and the loss of personal tax shelters took their toll (motels were used to prop up many, many tax shelters individuals used to avoid high marginal taxes until Code secs. 465 and 469 shut the industry down almost overnight).  The country survived that; it'll survive this.

[mystery-ak]

I used to enjoy shopping at our local mall...we have lost so many stores...Old Navy, Toys R US, Sears, Penneys to name the biggies...we have many smaller stores that are now empty....the main store Kohls seems to be thriving...if you can't find it at Kohls you go online or travel 45mi to Springfield or Bloomington Il.

[geronl]

I haven't been to a mall in forever, no point.

[Sanguine]

Just for what it's worth; in the central Texas IH35 corridor, malls are rapidly being build.  Mostly anchored by Home Depot, Walmart and a couple of chain restaurants.  And, the outlet malls are pretty frequent too.   

Looking out at the landscape, you can't tell if you're in San Antonio, Austin or Waco.  All the same.

[ABX]

It isn't just bad economic conditions. The nature of shopping is changing. Online shopping is booming hurting many physical stores (see Target, Hastings, KMart, Macy's). The old staple of malls too, teenagers hanging out is also being impacted by online social activities. They don't need to go to a mall to socialize with each other.

Many stores have failed to adapt to the changing times.

[ABX]

Just for what it's worth; in the central Texas IH35 corridor, malls are rapidly being build.  Mostly anchored by Home Depot, Walmart and a couple of chain restaurants.  And, the outlet malls are pretty frequent too.   

Looking out at the landscape, you can't tell if you're in San Antonio, Austin or Waco.  All the same.

That's completely true. I think Tanger outlets are putting up two new ones between Dallas and Austin in addition to the one right outside of Austin. With all the traffic problems on 35S, it is probably great for business, people don't want to sit in traffic so they pull off to a store.

Interestingly htough, the Tanger outlet in Terrell seems to be dead most of the time.

[Sanguine]

That's completely true. I think Tanger outlets are putting up two new ones between Dallas and Austin in addition to the one right outside of Austin. With all the traffic problems on 35S, it is probably great for business, people don't want to sit in traffic so they pull off to a store.

Interestingly htough, the Tanger outlet in Terrell seems to be dead most of the time.

Yeah, that IH35 corridor is golden right now.  I avoid it like the plague.

[IsailedawayfromFR]

Yeah, that IH35 corridor is golden right now.  I avoid it like the plague.

I do too, but chose last weekend to try it again.

After wading through the cars and the 50 miles of road repair work being done, I realized why I had chosen to stay away.  Miserable trip.
No more.

[dfwgator]

Where will the gangs hang out now?

[Oceander]

Where will the gangs hang out now?

Probably in the empty malls; all the better to get up to no good without the cops busting your chops.

[Oceander]

It isn't just bad economic conditions. The nature of shopping is changing. Online shopping is booming hurting many physical stores (see Target, Hastings, KMart, Macy's). The old staple of malls too, teenagers hanging out is also being impacted by online social activities. They don't need to go to a mall to socialize with each other.

Many stores have failed to adapt to the changing times.

For some it may not even be an issue of failing to adapt, but of a rational choice to shut down in the face of changed circumstances.  Once Henry Ford started putting out the Model T, I would think that many stable owners and horse groomers - at least the rational ones - realized the days of their industry were numbered, and gracefully closed their businesses down.

[mountaineer]

There are some things I simply cannot buy online, namely, clothing and shoes. I have to try them on.  I hope not all of the "brick and mortar" stores disappear!

[Oceander]

There are some things I simply cannot buy online, namely, clothing and shoes. I have to try them on.  I hope not all of the "brick and mortar" stores disappear!

I feel the same way.  However, my wife is perfectly fine with buying clothes and shoes online - she buys several sizes and variations of what she's interested in, then sends back what she doesn't want or doesn't fit.  With free return shipping, she basically doesn't bear a marginal cost for doing that.