AS STORES CLOSE, MALLS LOOK TO REINVENT THEMSELVES
Go- cart tracks and indoor golf are ways to bring in customers
At Opry Mills in Nashville, shoppers can sift through sheets at Bed, Bath & Beyond, pick up a doll at Toys R Us — or snap a picture with a wax sculpture of country star Keith Urban.
The mall has become the first in the U. S. to have a Madame Tussauds wax museum.
“I think the museum just adds to the whole mall experience,” says Mary Nathan, a visitor from Illinois whose daughter became enamored with a wax likeness of Taylor Swift.
With darkened storefronts pockmarking malls across the country, many are undergoing a dramatic makeover to become destinations for activities. They are adding attractions such as go- cart tracks and glow- in- the- dark indoor golf. Or they are morphing into hubs that offer a blend of offices, classrooms, apartments and shops, and modern town squares where groups can convene.
It is “less about stores and more about experiences,” says Paula Rosenblum, managing partner of the retail advisory company RSR Research.
Mall owners are being forced to innovate as they struggle with the rise of customers shopping from home on their computers instead of in their cavernous centers. With online fashion sales alone predicted to double to roughly 35.7% within 15 years, global financial services firm Credit Suisse predicts that up to a quarter of the nation’s 1,211 malls could shut their doors by 2022.
“The Internet is now hollowing out the great American mall,” says Mark Cohen, director of retail studies at Columbia Business School.
Also troubling is the cascade of closure announcements from departmentstore chains that historically have anchored shopping centers. JCPenney has said it will close 138 locations, roughly 14% of its stores. Macy’s said it would shutter 68 of its locations. Sears, in a series of announcements, has announced 300 store closings.
The exits set up a chain reaction that causes smaller specialty stores to fail as
well. Specialty apparel chains such as Rue 21, The Limited and Bebe either have or plan to close every one of their stores. Gymboree, the children’s clothing retailer, is shutting 350 locations.
Mall operators long have offered movie theaters and other attractions. But now they are getting more creative. The Palisades Center in West Nyack, N. Y., for instance, has what the mall’s owner says is the tallest indoor rope course in the country.
And CBL & Associates, which owns 67 malls, has seen increased foot traffic at its Layton Hills Mall in Layton, Utah, where an aquarium that replaced a shuttered Sports Authority is drawing families and busloads of school children.
That success, along with an overall mall occupancy rate for CBL of 95% at the end of 2016, are key reasons Stephen Lebovitz, CEO of CBL, balks at the notion malls are doomed. “I think that malls are going to be changing, but the majority of malls have prime locations in strong markets,” he says.
The Mills, part of Simon Property Group, the nation’s largest mall owner, is adding a mix of hotels, residences, offices and experiences such as Legoland Discovery Center and Sea Life Aquarium. Recently, its Grapevine Mills mall in Grapevine, Texas, became the first enclosed mall to feature Fieldhouse USA, a tournament space for activities from soccer to cheerleading.
Todd Routh, whose company owns seven malls across the Southwest, brought a satellite campus of Ranger College to his company’s Heartland Mall in Early, Texas, eight years ago. And last year, as store closings started to grip the retail industry, Routh added a Body Evolution gym to his mall in Carlsbad, N. M.
Malls provide office space as well. When Starwood Retail Partners bought Fairlane Town Center in the Detroit suburb of Dearborn in 2014, the Lord & Taylor store there had been vacant since 2006. Starwood moved quickly to make a deal with auto giant Ford, whose headquarters is nearby, and now there are Ford offices and hundreds of employees in the once- empty store.
Not only did the office idea solve the empty- space issue, but those same employees add to the mall’s food and drink sales, said Michael Powers, senior vice president of leasing for Starwood Retail Partners.
And don’t forget health care. The 100 Oaks Mall, the first enclosed mall in Nashville, was the biggest shopping center in the state when it opened in 1967.
But as more people relocated to the suburbs, 100 Oaks became an also- ran to newer regional malls. In 2007, it became the home base for a Vanderbilt University Medical Center campus, and that has helped the center turn the corner.