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.
As 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.
“The dependence of malls on department stores isn’t what it was 25 years ago,” says Sandeep Mathrani, CEO of another big mall owner General Growth Properties Inc, which owns and operates the Mall of Louisiana in Baton Rouge, Pecanland Mall in Monroe and Oakwood Center in Gretna.
Since 2011, General Growth has taken back space from 65 department stores, or about 15% of its anchors, and filled the locations with new occupants that include H&M Hennes & Maurtiz AB, 24 Hour Fitness, Wegmans Food Markets Inc., Dave & Buster’s and other restaurants.
At their peak in the 1980s, there were 56 department store nameplates, Mathrani estimates. Today, the number has dwindled to roughly a dozen.
The remaining chains have closed hundreds of stores in recent years, as they grapple with online competition from Amazon.com Inc. and changing consumer tastes that have made department stores seem antiquated.
Mall department stores aren’t dead, however. At 229 malls that real-estate tracking company CoStar Group Inc. examined over the past decade, one department store brand replaced another in 46% of anchor space that turned over. But the remainder of that space, or nearly 54%, went to non-department store occupants such as food, home furnishings and sporting goods.
Other malls are looking at nontraditional tenants to replace the departed big-box anchors. Moonbeam Leasing & Management LLC, which operates Cortana Mall, has been trying to attract schools, medical businesses and other businesses looking for large amounts of space to fill the anchor spaces.
The Wall Street Journal has the full story.
