It's only April, but already this year, more stores have closed – almost 6000 – announced than in all 2018.
When resellers are now talking about withdrawing for discounting, this can be a reason why traffic falls on shopping malls, he said, except that some purchases go online. Another issue is that landlords have hoped that those offering shoppers would find new experiences make it more exciting to go to the mall, but the early evidence does not show an increase in activity.
Thasos: Traffic has peaked at closed shopping malls anchored by department stores
US retailers so far have announced that they close 5 994 stores, while opening 2 641, according to property tracking made by Coresight Research. There are more places that are planned to be dark than last year. In 2018, 5,864 closures and 3,239 openings were announced, Coresight said.
The planned closures include more than 2000 from Payless ShoeSource, filed for bankruptcy, hundreds from clothing retailers such as Gymboree, Charlotte Russe, Victoria's Secret and Gap, and the Fred chain of discount. At the same time, chains like Aldi, Dollar Tree, Ollie's Bargain Outlet, Five Below and Levi are planning to open more stores.
On the front, the look doesn't look better, Coresight predicts. It was after 2017 was a record year for closures announced by US dealers, which amounted to more than 8,000.
"I expect business closure will accelerate in 2019 and hit about 12,000 by the end of the year," Deborah Weinswig, CEO and founder of Coresight. . "The slowdown we saw in 2018 seems to have been a short while in a stable and long-term trend."
Mall and shopping center owners, looking for ways to fill empty space, have in turn been forced to negotiate lease terms with tenants and settle on cheaper rentals.
"It's funny because none of the retailers [closing stores] is surprising," says analyst DJ Busch, analyst for commercial real estate companies. "But when it happens in a wave, it interferes with the negotiating power. It creates a soft point".
Then the landlord turns to upcoming digital domestic brands such as fabric company Untuckit, Warby Parker glasses and mattress dealer Casper, which opens hundreds of stores as a group across the country after succeeding in the internet, to move into their real estate. They hope to add tenants who bring unique experiences, such as Legoland, Crayola Experience and Dave & Busters, to attract customers from their homes and out to the mall.
But Thasos Collins said it might not go as planned. 19659003] His permanent shopping centers with so-called experienced tenants who not only focus on selling products, such as Apple, Italian food hall Eataly and Tesla, have not attracted extra traffic. Until the last three months of 2018, indoor shopping centers with "experienced" tenants did not benefit from larger shopping traffic compared to indoor centers without one of these unique tenants Thasos
This suggests [real estate investment trusts] is overpaid to bring Tesla and Apple. "
Thasos: Experiential tenants do not yet offer "meaningful edge", and others, to drive foot traffic to the property, Collins says.
With more store closures likely to be on the horizon, consumers can expect to see hotels, gyms, apartment complexes, more food halls and grocery stores at traditional malls, turning into more like city centers. The new Hudson Yards Mall, which opened in New York last month, is the perfect example of this mixed user model.
Mall owners also experiment with spaces that allow young brands to rotate in and out often, futures contracts and access to data on foot traffic and shopping patterns. Macerich, the third largest mall owner in the country, has a company called BrandBox that it rolls out at its centers across the US
"I think this is a multi-year transition," Busch said. "Clear some of these retailers that lasted longer than they should have … It will be tough. Anyone thinks it's too optimistic. But that doesn't mean this is a dead business. good companies that underproductively [retailers] are going away and the strong landlords are investing. "
Mall owners including Simon, Brookfield, Taubman, Macerich, PREIT, CBL and Washington Prime are expected to report quarterly profits in coming weeks and will give a glimpse of the current the leasing environment and how they handle the latest wave of store closures.