Future Of Malls? The Price For Overbuilding Is Due
Just as we welcome the New Year with retail up 4.2% through November and early reports from Mastercard SpendingPulse that retail sales rose 4.9% from November 1 through Christmas Eve, Green Street Advisors comes out with a new white paper suggesting that shopping malls are not out of the woods yet, not by a long shot. If authors Jim Sullivan and Otto Aletter’s analysis is right, the retail apocalypse may not even have started as the price for retail overbuilding is shortly coming due. Business Insider just gave early warning that the trend of massive retail closings will continue this year. Through September 2017 Business Insider counted some 6,403 store closures and while it predicts that retail closures will slow in 2018, the trend is hardly over, with another 3,600 by early count slated to close. And these are just the announced closings, as Green Street Advisors’ report indicated. Many more retailers have shuttered mall stores on the Q.T. In its analysis of 950 malls, of the top 25 national retail tenants that closed stores in 2017, about half (over 1,200) were retailers that made no public announcements but went out of the malls quietly. To which, Green Street concludes, these silent closing “present a significant risk factor to the sector.” The list of silent retail closings include Stride Rite, Hallmark, Subway, Regis Salon, Things Remembered, Claire’s, MasterCuts, Men’s Warehouse, Bakers, Kenneth Cole, The Body Shop, and Papaya. These are mall’s in-line tenants, less visible than the anchor tenants, but the very ones that Green Street considers a bellwether of the health of mall properties. Read more at Forbes.
