The American shopping experience is headed for a radical transformation as malls across the country face the retreat of the retail giants that have kept them in business for generations.
Macy’s has begun closing 150 of its stores as consumers increasingly turn to online shopping and budget retailers.
And other big names, such as Dillards, JCPenney and Neiman Marcus, have joined the exodus, leaving many retail parks without the anchor tenants they rely on.
Experts have warned that many shopping centres will disappear as they struggle to find replacements for their “big box” tenants, and those that survive will have to dramatically improve their appeal.
“If it’s in a really bad location where nobody wants to spend money to tear it down, then it could rot away,” said Chris Wimmer of Fitch Ratings.
The disappearance of big-box stores like Macy’s means the end of hundreds of US shopping malls amid the rise of online shopping, analysts have warned.
But some are bucking the trend and branching out into entertainment, food and fitness.
Macy’s had already closed a third of its stores in just ten years when it announced it was accelerating the process in February.
By 2026, there will be just 350 U.S. outlets left as the company focuses on its most profitable retail brands, Bloomingdale’s and Bluemercury.
Both Neiman Marcus and JCPenney have filed for Chapter 11 bankruptcy, and Sears now has just a dozen stores nationwide, after having more than 4,000 stores in 2012.
Few tenants are large enough to fill the vacant spaces they leave behind, and Macy’s stores typically range in size from 200,000 square feet to 1,000 square feet.
The number of shopping centres has already been cut by almost half, to 593, in the past eight years, according to NBC BusinessBut those that have survived are already showing the shape of what is to come.
Mall owner Brookfield Properties has been busy transforming more than 100 of its massive shopping centers into smaller venues, spending $2 billion in just over a decade.
Since Macy’s left San Francisco’s Stonestown Galleria, the mall has gained a Whole Foods, a movie theater, a sporting goods store and a health club.
And the Tysons Galleria outside D.C. has gotten bigger since Macy’s closed, with a new wing housing a bowling alley, a movie theater, more restaurants and a showroom for Lucid Motors’ electric cars.
Earlier this week, NHL franchise Utah Hockey Club ensured the survival of a shopping mall outside Salt Lake City when work began on its new training facility on the site of a defunct Macy’s.
The existing properties will operate alongside the club on the 111-acre site when it opens next year.
Major brands have closed hundreds of outlets in 2023 alone as changing shopping habits continue to wreak havoc on the retail landscape.
“There’s a collective challenge to get people off the couch and out of the house,” said Brookfield development director Adam Tritt.
“We can break it down into smaller, more digestible pieces, so as trends change and communities evolve, we can respond more quickly.”
Others have transformed old shops into new homes and added attractions like laser tag and rock climbing.
Adam Tritt, director of development at Brookfield Properties
Malls with low occupancy rates have been disappearing much faster than those that have kept their anchor tenants, but Wimmer said developers have been “eager to get their hands on their Macy’s” in malls with better locations.
“Low-quality shopping malls really don’t have to exist anymore,” he added.
Legacy West in Plano, Texas, has attracted luxury brands including Louis Vitton since it transformed its vacant 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 generates a lot of traffic,” 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 at malls or department stores like they used to,” said Stenn Parton, owner of Prism.
And some former shopping centres now bear witness to the havoc that the rise of online shopping has wreaked on the retail sector.
The once-thriving Randall Park mall in northeast Ohio used to be home to major retailers like Dillards, JCPenney and Macy’s.
The site now houses a massive Amazon fulfillment center serving its former customers, and the online giant moved to the site of another derelict mall in Baton Rouge, Louisiana, earlier this summer.
But a mall near Salt Lake City in Utah survived the departure of its Macy’s when the NHL’s Utah Hockey Club came up with a plan to remodel the space into its new training facility.
“I’m very happy that the mall will continue to operate,” Sandy Mayor Monica Zoltanski told Fox13 as construction began at the Utah Hockey Club site on Monday.
Department stores like Macy’s and JCPenney were one of the lifeblood of malls, drawing shoppers and keeping neighboring retailers afloat.
Malls like this one in Plano, Texas, are turning their retail spaces into experience-based attractions, like upscale food halls, to attract visitors.
“I’m very happy that the mall will continue to operate,” Sandy Mayor Monica Zoltanski told Fox13 as work began at the site Monday.
‘Businesses will continue to operate and they will have an injection of economic energy, a great explosion of economic energy that will be driven by the arrival of the Utah Hockey Club.
‘What makes malls and shopping centers in the United States successful are those that are resilient and can plan and adapt to new consumer habits and changing business models.
“And we’ll see that here at South Town Mall, and I welcome that future.”
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