Once mighty mega-chains like Sears and JC Penny are closing down retail operations nationwide at an alarming rate of speed in an attempt to remain competitive with price-undercutting internet based retailers like Amazon, and leaving behind them indoor and outdoor malls on the brink disaster.
At almost half of the 1,050 malls in America have both Sears and JC Penny as anchor tenants, and as those anchors are becoming unmoored, the malls are suffering–one quarter report sales below $300 per square foot and vacancy rates above 20 percent, reports The Wall Street Journal. As Sears and Penny’s shutdown, their are fewer and fewer retailers interested in stepping in to prop up an otherwise dying mall.
Nationwide, sales per square foot at the nation’s malls grew less than three percent last year and represented the worst year since 2009–the height of the great recession. Some malls have sought to re-invent themselves as dinging and entertainments centers–often to mixed results.
“Two anchors aren’t enough to draw people to the mall,” long-time mall worker Michelle Laidig told The Journal. “The mall used to be a destination. Now the locals just come here to return items they bought at other malls.”
PYMNTS Karen Webster has written about retail current reenactment of the death spiral that consumed the newspaper business beginning 20 years ago. To see here predictions about what is coming in retail, click here.
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