What do Sears clo­sures mean for Mem­phis-area malls?

South­land, Wolfchase both face new chal­lenges

The Commercial Appeal - - Front Page - De­siree Sten­nett Mem­phis Com­mer­cial Ap­peal USA TO­DAY NET­WORK - TEN­NESSEE

South­land Mall and Wolfchase Gal­le­ria will each face a chal­lenge now that Sears has an­nounced that its stores in both malls will soon close.

Sears has a mas­sive foot­print in­side both malls and serves as an an­chor store meant to en­tice shop­pers to come in­side, not only to buy from Sears but to sup­port other stores as well.

The Wolfchase Sears will close by the end of De­cem­ber while the South­land Sears will close by the end of Fe­bru­ary.

The loss of an an­chor store can of­ten mean a mall is more likely to fail if the space can’t be filled quickly. How­ever, econ­o­mists and re­tail ex­perts say the loss of Sears means some­thing unique to each mall whose fu­tures are likely to be vastly dif­fer­ent.

South­land Mall, which also lost its Macy’s in a wave of clo­sures in 2015 and was pur­chased by Spinoso Real Es­tate Group in a fore­clo­sure sale the fol­low­ing year, will be in a pre­car­i­ous po­si­tion once Sears leaves it with­out an an­chor store, said John Gnuschke, an econ­o­mist with the Univer­sity of Mem­phis.

“With no ma­jor an­chor stores, ev­ery mall will have fi­nan­cial dif­fi­cul­ties and South­land is no ex­cep­tion,” Gnuschke said. “South­land has been in tran­si­tion for a long time and has de­pended on smaller in­de­pen­dent stores to re­main open. The loss of Sears will be a ma­jor set­back for the mall that will be very dif­fi­cult to off­set.”

When Macy’s closed, the space re­mained va­cant for months as the re­tail gi­ant first at­tempted to sell it, then auc­tion it off. That could be a sign that Sears, which owns the por­tion of the build­ing that houses its store, may also

have a dif­fi­cult time sell­ing as well. The longer the space sits empty, the more dif­fi­cult it will be for the mall to re­bound.

“The prob­a­bil­ity the mall will close is in­creased by the loss of its last an­chor store,” Gnuschke said. “The mall may be able to sus­tain it­self with a non-an­chor strat­egy de­pend­ing on the mall’s fi­nan­cial strength and its abil­ity to main­tain or grow its cus­tomer base. But keep­ing the mall open has just got­ten harder for its own­ers.”

Spokes­peo­ple for South­land Mall and Spinoso Real Es­tate Group did not re­spond to re­quests for com­ment.

At Wolfchase Gal­le­ria in Cor­dova, the loss of Sears is less of a blow be­cause it still has three other an­chors in Macy’s, JCPen­ney and Dil­lard’s. Wolfchase also has fast fash­ion re­tail­ers like For­ever 21, Char­lotte Russe and H&M, which have not set up shop at South­land Mall.

Still that doesn’t mean that Wolfchase won’t have to come up with a strat­egy to fill the space.

“The im­pact of the Sears clo­sure will be more dev­as­tat­ing for South­land but the clo­sures are se­ri­ous for both malls,” Gnuschke said.

Fu­ture of South­land Mall needs creative think­ing

It’s not clear what will re­place Sears at ei­ther mall but Si­mon Prop­erty Group, which owns Wolfchase Gal­le­ria, has been ex­per­i­ment­ing with re­plac­ing shut­tered Sears stores with restau­rants, ho­tels, res­i­den­tial spa­ces and fit­ness cen­ters.

If South­land Mall can do the same, that could mean a vi­brant fu­ture, said Shawn Massey, of The Shop­ping Cen­ter Group.

“I am ac­tu­ally more ex­cited about the po­ten­tial for Sears store to be reimag­ined in White­haven than Wolfchase,” Massey said. “I think that an ir­rel­e­vant re­tailer who no longer serves the cus­tomer lo­cated on one of the best cor­ners in White­haven can be reimag­ined into some­thing else.”

Massey’s com­pany isn’t in­volved in the ef­fort to find a re­place­ment for the Sears. How­ever, he said a creative de­vel­oper could find a so­lu­tion that so­lid­i­fies the fu­ture of the White­haven mall. He points to ex­am­ples of malls that have trans­formed Sears lo­ca­tions into af­ford­able hous­ing op­tions that bring new res­i­dents into the area and can of­ten mean a boost for the mall.

There is one space how­ever that Massey sees as a pos­si­bil­ity for new re­tail: What is now the Sears Auto Cen­ter at the cor­ner of East Shelby Drive and Elvis Pres­ley Boule­vard “would make a great restau­rant or re­tailer lo­ca­tion,” Massey said.

“I do not be­lieve there are any cur­rent plans but... a pro­gres­sive de­vel­oper who is will­ing to lis­ten the com­mu­nity res­i­dents could re­ally make an in­cred­i­ble project come to life,” Massey added. “It needs a vi­sion­ary and a team to make it hap­pen.”

De­siree Sten­nett can be reached at de­siree.sten­nett@ com­mer­cialap­peal.com, 901-529-2738 or on Twit­ter: @de­si_sten­nett.

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