Clos­ings threaten vi­brancy of malls

Sears, Elder-Beer­man va­can­cies could hurt as hol­i­days ap­proach.

Dayton Daily News - - FRONT PAGE - By Holly Shively Staff Writer

The clo­sure of Elder-Beer­man stores and soon Sears lo­ca­tions right be­fore the busy hol­i­day sea­son threat­ens the vi­brancy of area malls.

But ex­perts who an­a­lyze the re­tail in­dus­try say malls like the Mall at Fair­field Com­mons and the Day­ton Mall should weather the storm and the de­part­ment store clo­sures will even­tu­ally be good for the shop­ping des­ti­na­tions.

“The top 50 mall own­ers in the coun­try were dy­ing to get Sears out of the mall, so they’re thrilled,” Corey Bialow, chief ex­ec­u­tive at Bialow Real Es­tate LLC, told the Wall Street Jour­nal. “Where it’s

go­ing to hurt most [is] at malls that are al­ready strug­gling. Sears is still a rel­e­vant brand in the heart­land, and clo­sures there will in­evitably hurt.”

The day Sears an­nounced it would close at Fair­field Com­mons, the mall al­ready had ten­ants se­cured. It plans to break the 127,000 square- foot, two-story box into two stores. The top store will host The Room Place fur­ni­ture store while the bot­tom will be an en­ter­tain­ment con- cept with food, bowl­ing and ar­cade games.

The Beaver­creek mall also has knocked down an old Elder-Beer­man fur­ni­ture store to cre­ate out­ward fac­ing restau­rants.

“When there is a store clos­ing, it pro­vides us with an op­por­tu­nity to bring new and in­ter­est­ing prod­ucts and ser­vices to the cen­ters,” said Kristie Miller, re­gional man­ager for Wash­ing­ton Prime Group, which owns both malls. “We con­tinue to fo­cus on de­liv­er­ing the best expe- ri­ence for our guests and both cen­ters of­fer an abun­dant mix of re­tail, din­ing and life­style uses.”

The loss of the stores will still lower some foot traf­fic and will leave gi­ant holes in the malls be­fore Christ­mas.

At both the Mall at Fair- field Com­mons in Beaver- creek and the Day­ton Mall in Mi­ami Twp., the com­bined Elder-Beer­man and Sears boxes make up more than 26 per­cent of to­tal gross leas- able area. The Elder-Beer­man stores are al­ready closed, with Sears at the Day­ton Mall ex­pected to shut down in early Novem­ber and the Beaver­creek Sears store set to close in early De­cem­ber.

When the stores close, a to­tal 667,260 square feet will be left va­cant at the two malls —a com­bined to­tal of nearly 2.5 mil­lion square feet.

While both malls re­port 95 per­cent oc­cu­pancy, that takes into ac­count only small re­tail stores less than 10,000 square feet, not de­part­ment store an­chors strug­gling to keep up as shop­ping habits change. Those boxes are of­ten not owned by malls, — the case at the Day­ton Mall — caus­ing de­lays when try­ing to re­fill spa­ces.

“The in­dus­try is cer­tainly un­der­go­ing a trans­for­ma­tion, and you’re see­ing com­pa­nies that maybe haven’t adapted as quickly are strug­gling,” said Ohio Re­tail Mer­chants spokesman Alex Boehnke.

But he said con­sumer sen­ti­ment re­mains high de­spite re­cent stock mar­ket down- turns. The Na­tional Re­tail Fed­er­a­tion fore­casts that hol- iday sales will jump be­tween 4.3 per­cent and 4.8 per­cent this year. While sales may shift around to other shop­ping cen­ters that don’t have the same con­cerns, re­tail­ers will still have a good hol­i­day, Boehnke said.

“Hav­ing a big va­cancy come Black Fri­day and the hol­i­days is not a good thing, but I guess the sil­ver lin­ing is that a lot of the sales are go­ing to trans­fer to JCPen­ney and Macy’s,” said Scott Sad­dlemire, prin­ci­pal of On­site Re­tail Group, a Cincin­nati-based com­mer­cial real es­tate com­pany that finds prop­er­ties for re­tail com­pa­nies in the Day­ton mar­ket.

The same thing hap­pened in the elec­tron­ics mar­ket when hh­gregg went out of busi­ness and Best Buy sawa boost in sales, he said.

Clo­sures of de­part­ment stores also elim­i­nate highly traf­ficked en­trances, es­pe­cially at the Day­ton Mall where ma­jor en­trances on both the east and west sides will be va­cant.

Sad­dlemire said traf­fic will still flow through the malls, but it will be dif­fer­ent, with more cus­tomers en­ter­ing near other an­chors. The stores near those en­trances are likely to see more sales, con­trary to the de­cline stores will see at the ends of wings with­out an­chors.

“The foot traf­fic is go­ing to de­crease, and the foot traf­fic is what makes in­door malls work,” Sad­dlemire said.

But malls in the past have used va­cant an­chors as tem­po­rary spa­ces dur­ing busy hol­i­day shop­ping sea­sons to keep a closer to nor­mal flow of traf­fic, Sad­dlemire said.

One ex­am­ple is the Spirit Hal­loween stores tak­ing over va­cant store­fronts for a tem­po­rary pe­riod, Boehnke said.

“There’s go­ing to be oth­ers that might have a sim­i­lar busi­ness model,” he said. “Maybe if its dur­ing the Christ­mas sea­son, a pop-up type hol­i­day store of­fer­ing gift wrap­ping, things like that . ... There are op­tions.”

Nei­ther mall has tem­po­rary plans at this time, but own­ers want to fill those voids per­ma­nently, which is dif­fi­cult when few re­tail­ers are look­ing for de­part­ment store­sized spa­ces and mall va­can­cies have hit a seven-year high at 9.1 per­cent, ac­cord­ing to a re­cent study by Reis.

Wash­ing­ton Prime has filled some of its clo­sures with re­tail­ers not tra­di­tional to the re­gion. It picked up Ross Dress For Less re­cently at the Day­ton Mall in the hh­gregg lo­ca­tion that had been va­cant since last year.

TY GREENLEES / STAFF

At the Mall at Fair­field Com­mons and the Day­ton Mall, the Elder-Beer­man and Sears boxes make up more than a quar­ter of the area avail­able to lease.

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