48-hour beating for US malls as retailers cull over 300 stores
You can't blame America's teenagers for no longer congregating at the mall like generations past: there aren't all that many stores left.
In the space of 48 hours last week, several shopping-centre staples unveiled plans to trim their footprints across the US. Gap Inc said it would slash the store count of its struggling namesake brand by 230 locations over the next two years, just hours after JC Penney Co confirmed it would shutter 18 department stores.
That news came on the heels of L Brands Inc's decision to close 53 Victoria's Secret stores in North America this year. And it's not just apparel: Tesla Inc, whose galleries are often inside shopping centres, just said it's taking all its sales online. Some chains had already announced they're closing down or reducing their footprints due to bankruptcy. This includes Payless Inc, which is abandoning 2,500 stores, Things Remembered, which is closing most of its 400 stores and selling the rest, while mall favourite Brookstone Inc slims down operations and Sears continues to shutter stores. Many of today's US shopping centres are becoming little more than an assemblage of fast-fashion retailers, Apple stores and food courts. "You hear so much about shopping centres are dying. There definitely needs to be attrition, and there's too many in the US," Michael Guerin, Senior Vice President of Leasing at mall owner Macerich Co, said earlier this year. The mall "just needs to evolve".
The dying-mall narrative isn't a new one, with the phrase 'retail apocalypse' making its way into the American lexicon years ago as the country's over-stored suburbs and the continued gains of online shopping took their toll. But after a brief period of shopper stabilisation - fuelled by rising consumer confidence and low gas prices - it appears another culling is in order for the industry.
The vacancy rate in US malls was nine per cent in the fourth quarter, up from 8.3pc a year earlier.
Some malls have found ways to adapt. Macerich has already started offering 180-day leases to encourage pop-ups to fill empty storefronts. And online-first companies like Warby Parker, Bonobos and Casper are embracing what they call 'offline' in a big way. "When they open a store, their online sales go up," Macerich's Guerin said.