How Macy’s closures will set off a wave of changes at shopping malls and reshape the suburbs
The American shopping experience is undergoing a radical transformation as malls across the country face the retreat of the retail giants that have kept them alive for generations.
Macy’s has begun closing 150 of its stores as consumers increasingly shop online and at budget stores.
And other big names, including Dillards, JCPenney and Neiman Marcus, have joined the exodus, leaving many malls without the anchor tenants they depend on.
Experts warn that many malls will go under in the search for replacements for their “big” tenants. Those that survive will have to drastically improve their attractiveness.
“If it’s in a really bad location and nobody wants to spend money to tear it down, it could rot,” said Chris Wimmer of Fitch Ratings.
Analysts warn that the demise of major retailers like Macy’s could mean the demise of hundreds of shopping malls across the US as online shopping takes off.
But some are bucking the trend and diversifying their activities into entertainment, food and fitness
Macy’s had already closed a third of its stores in just a decade when it announced in February that it was accelerating the process.
By 2026, there will be just 350 stores left in the US as the company focuses on its more profitable retail brands Bloomingdale’s and Bluemercury.
Neiman Marcus and JCPenney have both filed for Chapter 11 bankruptcy protection, and the Sears chain now has just a dozen stores in the country, down from more than 4,000 stores in 2012.
Few tenants are large enough to fill the empty stores they leave behind. Macy’s stores are typically larger than 200,000 square feet.
According to Statistics Netherlands (CBS), the number of shopping centres has fallen by almost half in the past eight years to 593. NBC Companybut those who survived already show a picture of what is to come.
Mall owner Brookfield Properties has been busy converting more than 100 of the massive malls into smaller stores, spending $2 billion in just over a decade.
Since Macy’s left the Stonestown Galleria in San Francisco, the mall has housed a Whole Foods, movie theater, sporting goods store and health center.
And Tysons Galleria outside Washington, D.C., has gotten even bigger since Macy’s closed, adding a new wing with a bowling alley, a movie theater, more restaurants and a showroom for Lucid Motors’ electric cars.
Earlier this week, NHL franchise Utah Hockey Club secured the survival of a shopping center outside Salt Lake City when work began on its new training facility at the site of an abandoned Macy’s.
Existing establishments will operate alongside the club on the 111-hectare site when it opens next year
Household names are set to close hundreds of stores in 2023 alone as changing shopping habits continue to wreak havoc on the retail landscape.
“It’s a collective challenge to get people off the couch and out of the house,” said Adam Tritt, Brookfield’s chief development officer.
“We can break it down into smaller, digestible pieces so we can respond more quickly as trends change and communities evolve.”
Others have converted old shops into new homes and added attractions such as laser tag and rock climbing.
Adam Tritt Chief Development Officer at Brookfield Properties
Malls with low occupancy are disappearing much faster than those that still have their regular tenants. But according to Wimmer, developers are eager to put their Macy’s in malls with better locations.
“Low-quality shopping centres don’t really need to exist anymore,” he added.
Legacy West in Plano, Texas, has attracted luxury brands including Louis Vitton since it transformed its empty retail spaces into food halls
“We said, instead of building a department store, let’s do something that’s more fun and more interesting and that drives more traffic,” project 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.
“Younger customers aren’t shopping in malls and department stores like they used to,” said Stenn Parton, owner of Prism.
And some former shopping malls still stand today as living witnesses to the devastation wrought by the rise of online shopping in retail.
The once-thriving Randall Park Mall in northeast Ohio was once home to major retail chains such as Dillards, JCPenney and Macy’s.
Now, the site is home to a large Amazon distribution center that serves its former customers. In addition, the online giant moved to the site of another dilapidated shopping center in Baton Rouge, Louisiana, earlier this summer.
Only one shopping center near Salt Lake City, Utah, survived Macy’s departure when the NHL’s Utah Hockey Club devised a plan to redevelop the space into its new training facility.
“I’m so glad the mall is staying open,” Sandy Mayor Monica Zoltanski told Fox13 as work began on the Utah Hockey Club site Monday.
Major department stores like Macy’s and JCPenney were one of the lifeblood of shopping malls, drawing shoppers and keeping nearby retailers afloat
Shopping malls like this one in Plano, Texas, are choosing to transform their retail spaces into experience-based attractions like upscale food halls to attract visitors
“I’m so glad the mall will remain open,” Sandy Mayor Monica Zoltanski told Fox13 as work began on the site Monday.
‘The businesses are continuing to operate and they are getting a huge economic boost, fueled by the arrival of the Utah Hockey Club.
“What makes shopping malls successful in America is the resilient entrepreneurs who can plan and adapt to new consumer habits and changing business models.
“And that’s what we’re going to see here in the South Town shopping center, and I welcome that future.”