‘The demise of malls’ ac­cel­er­ates with virus

JCPen­ney, other re­tail­ers close stores across Cen­tral Florida

Orlando Sentinel - - Front Page - By Austin Fuller

JCPen­ney’s clos­ing of its Or­lando Fash­ion Square store comes against the back­drop of the coro­n­avirus pan­demic but also fol­lows a fa­mil­iar pat­tern of years of de­part­ment stores leav­ing Cen­tral Florida malls.

The ap­parel and home re­tailer joins Sears and Macy’s in shut­ting down mall stores across Cen­tral Florida. De­vel­op­ers were al­ready

plan­ning to tear down Or­lando Fash­ion Square be­fore the virus struck.

Malls are fac­ing even more chal­lenges as cus­tomers en­dur­ing lock­down have grown even more ac­cus­tomed to spend­ing their money on­line and as na­tional re­tail­ers strug­gle. Still, on a re­cent week­day, crowds of shop­pers came out to Florida Mall weeks af­ter it re­opened from a tem­po­rary clo­sure dur­ing the pan­demic.

Even “if the econ­omy springs back quickly, malls are go­ing to have to deal with the im­pact of some long-term ef­fects,” said Kevin Hipes, gen­eral man­ager at Oviedo Mall in nearby Semi­nole County.

His mall has started to ad­just af­ter los­ing both Macy’s and Sears by bring­ing in non-re­tail ten­ants such as cowork­ing space NeoWare and en­ter­tain­ment spots like Dis­trict Eat and Play. Apart­ments and a ho­tel have also been planned to re­place the empty Macy’s store.

“This [pan­demic] is go­ing to ac­cel­er­ate the demise of malls over­all, and I don’t think that’s a bad thing,” Hipes said. “It’s an evo­lu­tion like any­thing else. Things don’t stay the same, and you got to get in­volved and get in early.”

‘Not just the im­pact of the virus’

Af­ter fil­ing for Chap­ter 11 bank­ruptcy pro­tec­tion last month, JCPen­ney an­nounced 154 of its stores in­clud­ing at Or­lando Fash­ion Square would be part of its first phase of clos­ings.

Florida Mall, Al­ta­monte Mall, Semi­nole Towne Cen­ter, West Oaks Mall in Ocoee and Vo­lu­sia Mall in Day­tona Beach so far all get to keep their JCPen­ney stores. Other lo­ca­tions in Kis­sim­mee and Cler­mont also were not on the list.

How­ever, pre­vi­ously filed Se­cu­ri­ties and Ex­change Com­mis­sion doc­u­ments in­di­cated the na­tional re­tailer plans to shut­ter 192 of its 846 stores in the 2020 fis­cal year and close and sell an­other 50 stores next year.

The Fash­ion Square store was tem­po­rar­ily shut down as of Fri­day, ac­cord­ing to the com­pany’s web­site, but sales at the clos­ing lo­ca­tions were ex­pected to start in the com­ing weeks.

Hipes an­tic­i­pates other re­tail­ers on the edge of be­ing prof­itable will now close stores. He ex­pects na­tional chains with lo­ca­tions in mul­ti­ple malls with the same owner also will seek to ne­go­ti­ate rent re­duc­tions.

“They’re go­ing to as­sess their over­all sit­u­a­tion, not just the im­pact of the virus,” Hipes said. “Re­tail­ers are go­ing to use this op­por­tu­nity to get rid of non-pro­duc­tive stores.”

While cus­tomers have re­turned to Oviedo Mall to some de­gree since it opened back up in early May, it has been with­out a main draw in the Re­gal movie the­ater. Even as restau­rant din­ing rooms have been al­lowed to open back up, Gov. Ron De­San­tis just al­lowed movie theaters to re­open on Fri­day af­ter be­ing closed since March.

Hipes doesn’t an­tic­i­pate his cen­ter will be im­mune to prob­lems, but he has con­fi­dence in its long-term plan.

“It’s go­ing to be a big prob­lem, but it’s go­ing to be a short-term prob­lem,” Hipes said. “I’ve al­ready got a re­de­vel­op­ment plan that is in the works.”

New Fash­ion Square tar­geted for 2022

Even as Fash­ion Square loses JCPen­ney, the land un­der­neath the mall has al­ready been sold to de­vel­op­ers Chuck Whit­tall and Daryl Carter, who want to turn it into an open-air cen­ter.

The goal is to have the new “ex­pe­ri­en­tial” cen­ter open in 2022, said Whit­tall, whose de­vel­op­ments also in­clude In­ter­na­tional Drive’s Icon Or­lando. The de­vel­op­ers are still in dis­cus­sions with Ban­corp, owner of the mall’s build­ing.

Fash­ion Square, which opened in 1973, saw its Sears store torn down and re­placed with a Floor & Decor and an­other space eyed for a EoS Fit­ness gym. The cen­ter has held on to its Macy’s, Dil­lard’s Clear­ance Cen­ter and a movie the­ater.

Whit­tall, pres­i­dent and CEO of Uni­corp Na­tional De­vel­op­ments, also ex­pects coro­n­avirus to have dev­as­tat­ing ef­fects on malls.

“It’s en­abled the shop­per to re­ally uti­lize on­line shop­ping,” Whit­tall said, adding that he thinks a lot of cus­tomers won’t re­turn to malls at the same level as be­fore the pan­demic.

Masks, cus­tomers at Florida Mall

Florida Mall was bustling with cus­tomers on a re­cent rainy Thurs­day after­noon.

Shop­pers waited out­side Vic­to­ria’s Se­cret, Hot Topic and GameS­top as the stores lim­ited the num­ber of peo­ple in­side. Many cus­tomers wore masks as busi­nesses such as Skech­ers re­quired face cov­er­ings.

The Si­mon mall is not far from at­trac­tions like Univer­sal Or­lando and also is home to draws like the Cray­ola Ex­pe­ri­ence store.

Aracelis Par­tida, 19, was killing time with Christo­pher Smith, 21, at the mall when she found a game she wanted for her Nin­tendo Switch at GameS­top.

Both of the stu­dents from Or­lando were wear­ing masks and didn’t mind that the video game store lim­ited the num­ber of peo­ple in­side.

“I think it’s cool that they cap it,” Par­tida said.

De­spite some dreary fore­casts for malls, one ex­pert ex­pects Cen­tral Florida’s re­tail to re­bound.

Or­lando shop­pers ea­ger for a re­turn to nor­malcy are head­ing to more stores and restau­rants, said Justin Grei­der, se­nior vice pres­i­dent and Florida re­tail lead at real es­tate pro­fes­sional services firm JLL.

“De­spite the chal­lenges of COVID-19, there will be a bounce-back in the re­tail community, as travel and con­ven­tion ac­tiv­ity re­sumes and we see con­sumers ready to get back to shop­ping, din­ing and theme parks,” Grei­der said in a writ­ten re­sponse to ques­tions sent through a spokes­woman. “Or­lando was the top tourism des­ti­na­tion in the world be­fore COVID-19 and will be af­ter.”

RI­CARDO RAMIREZ BUXEDA/OR­LANDO SEN­TINEL

JCPen­ney at the Or­lando Fash­ion Square mall was tem­po­rar­ily closed Thurs­day, and the na­tional re­tailer plans to per­ma­nently close it.

AUSTIN FULLER/OR­LANDO SEN­TINEL

A sign at Florida Mall cau­tions cus­tomers to keep their dis­tance as a pre­cau­tion from coro­n­avirus.

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