The Washington Post writes about how "department stores, once a middle-class mainstay of convenience and indulgence, had been spiraling downward long before the pandemic turbocharged online shopping and helped tip a number of big-name retailers into bankruptcy. Nearly 200 department stores have disappeared in the past year alone, and another 800 — or about half the country’s remaining mall-based locations — are expected to shutter by the end of 2025, according to commercial real estate firm Green Street Advisors.
"Those closures, analysts say, will have a cascading effect on American shopping malls, which already are battling record-high vacancy rates and precipitous drops in foot traffic, as well as on the commercial real estate market and the broader economy."
The story goes on:
"The pandemic set off an economic chain reaction that rippled through the country’s department store chains, forcing several into Chapter 11 proceedings. Neiman Marcus, Stage Stores and J.C. Penney filed for bankruptcy last May, followed by Lord & Taylor and, most recently, Belk in February. Even companies on relatively stable footing, like Macy’s, are shuttering dozens of stores as they try to move away from traditional shopping malls. Overall sales at department stores plunged more than 40 percent at the beginning of the pandemic and have yet to make up for lost ground, according to Commerce Department data, as Americans do more of their shopping online and gravitate to specialty brands and discount chains."
- KC's View:
A week ago, when I visited the new Roche Bros. store at Arsenal Yards in Watertown, Massachusetts, I felt like I was seeing one of the ways in which malls can be saved - the entire Arsenal Yards development essentially was a rethinking of a traditional enclosed mall. The whole thing had been converted into a so-called lifestyle center, with mixed usage - there were office buildings, condos, restaurants, retail and a movie theater, and lots of green space. Rather than shrink wrapped, it was exposed to the open air … and there was something refreshing about the experience.
It'll be different for department stores, I think, especially the brands that don't have a real differentiated advantage, don't have a clear and distinct brand identity, and have not adapted to an e-commerce world with the alacrity of others. The sad reality may be that many of them have outlived their usefulness, at least in terms of their traditional construct.