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For many malls, right next to the famous “sale” sign sits another, more ominous one: “Store Closing.” The rise of online shopping and changing consumer habits appears to be leading to the downfall of many once-anchor department stores.
Macy’s reported a 31% decline in Q4 earnings and recently said it would close nearly 40 locations. And Macy’s isn't alone—Sears and J.C. Penney are closing up shop en masse, too, turning past anchor stores from assets into liabilities for landlords.
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A report from Green Street Advisors says department stores would need to close around 500 stores—about 15% of all anchor space in US malls—to generate as much sales per SF as they did in 2006, the Wall Street Journal reports. Mall landlords are trying to reignite interest by transitioning properties to be less exclusively retail-focused and more mixed-use centers. [WSJ]
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