The Nation’s Malls Are Getting Major Redo

July 19, 2016

Department stores in malls are getting the boot. In their place, restaurants and specialty stores are moving in, giving malls across the country a very different look and feel.

For example, at the Florida Mall in Orlando, Nordstrom was recently torn down to make room for the Crayola Experience, a crayon-based family attraction. Saks Fifth Avenue was also torn down and is becoming a dining pavilion boasting 23 restaurants. Lord & Taylor made room for American Girl, H&M, Forever 21, and Zara.

“Once the linchpin of American shopping malls, department stores are being displaced by newer types of retailers that do a better job of driving shoppers to the centers and lifting overall mall sales,” The Wall Street Journal reports. “Landlords are nudging out the once-coveted big box chains in favor of sporting-goods retailers, fast-fashion chains, supermarkets, gyms, restaurants, movies theaters and other types of entertainment as they seek to keep their properties relevant in an age increasingly dominated by online shopping.”

Simon Property Group Inc. reported its replaced 50 department stores over the past 15 years with tenants like Primark, Target Corp., and Forever 21 Inc.

Some of the department stores that have left have been by choice, which left mall owners scrambling to figure out to fill these big gaps in their malls.

“The dependence of malls on department stores isn’t what it was 25 years ago,” said Sandeep Mathrani, CEO of General Growth Properties Inc. The mall owner has removed about 65 department stores from its malls since 2011 and filled it with new occupants like 24-Hour Fitness, Wegmans Food Market Inc., Dave & Buster’s, and restaurants.

“The definition of an anchor has changed,” adds Stephen Lebovitz, chief executive of mall owner CBL & Associates Properties Inc.  “Cheesecake Factory does as much business as Sears used to do,” he says.

Source: “Mall Owners Push Out Department Stores,” The Wall Street Journal (July 10, 2016)