Are malls dying?
Moderated by Rick Badie
The struggles of some shopping malls here (such as Gwinnett Place in Duluth and Southlake in Morrow) and across the nation have been well-documented. Shopping centers can struggle financially when demographics change, anchor stores pack up and move, specialty shops lack appeal or spending patterns reflect a dull economy. Today, a mall real estate specialist and a local revitalization executive weigh the challenges and the future facing these retail destinations.
By Michael P. Glimcher
The death of the mall has been proclaimed over and over. Many thought it couldn’t weather the recession or would crumble from online retail. However, to say the mall will die is to underestimate that consumers are resilient, the mall is adaptable and people love to shop.
Malls remain highly-valued fortress-like assets. Mall real estate investment trusts are able to draw equity from top institutional investors attracted to stable cash flows from long-term leases that often average more than seven years.
Regardless of economics, the recession changed how we shop. As consumers tightened belts, we saw the rise of “fast fashion.” Retailers, like Forever 21 and Old Navy became household names. The industry also ushered in the outlet era. Well-known outlet brands increased their stores and full-price retailers re-evaluated strategies.
Today, with so many economic and political uncertainties, we can expect to see the popularity of value retail continue and to see “fast fashion” expand into categories like home décor. We will also see the pace of outlet growth continue short-term, and outlet and full-price retail exist closer together.
The recession has changed how people enjoy the mall. During the recession, Americans invented the “staycation.” Consumers traded in luxurious vacations for frugal experiences closer to home, like shopping, dining and movies. As a result, malls have seen dramatic increases in the number of restaurants as well as other entertainment venues like movie theaters, skating rinks or comedy clubs, set up shop.
More experiences are also being added. With the rise of online shopping, retailers are finding new ways to engage shoppers with brands. For example, lululemon athletica has introduced free yoga classes and Nike coordinates running clubs. Stores like Williams-Sonoma and Pottery Barn offer classes that integrate their products.
At Glimcher Realty Trust, we use the term” experience retail” to describe anything you can do at the mall but can’t do online. You can’t have a salad and a glass of wine online. You can’t try on a purse or have your makeup done. Shopping is a tactile and social experience.
Looking forward at the success of the U.S. shopping mall, some of the basic tenets of commercial real estate remain. First and foremost, it’s about location. Highway traffic, accessibility and proximity to dense residential areas are some of the leading factors in a mall’s longevity.
Reinvestment is also critical. Because of their size, in many cases more than one million square feet, malls require tremendous maintenance and upkeep. While renovations and updates can be costly, they are important to maintain the quality of the center and to attract and retain top national brands coveted by shoppers. Clean aesthetics with modern amenities add to the allure of the shopping experience.
Finally, with limited non-outlet mall development and retailers well-schooled to survive in this economy, it’s safe to say the mall isn’t going anywhere. It just might look a little different.
Michael P. Glimcher is chairman and CEO of Glimcher Realty Trust.
By Leo Wiener
On Aug. 28, the Gwinnett County Board of Commissioners took a bold step and endorsed a vision for the Greater Gwinnett Place area.
For the past year, the Gwinnett Place Community Improvement District (CID) has worked with Gwinnett County, the Gwinnett Chamber of Commerce, stakeholders and concerned citizens to craft strategies that can dramatically transform greater Gwinnett Place into a vibrant mixed-use center.
Launched in partnership with Gwinnett County and the Atlanta Regional Commission, the Gwinnett Livable Centers Initiative (LCI) is a map that will create a new type of community in Gwinnett’s central business district. Successful implementation of this plan will require a public-private partnership. The LCI process helped stakeholders understand that doing nothing or maintaining status quo would lead to failure. Gwinnett Place must continually evolve and remake itself if it is to be competitive again.
To achieve this vision, the plan recommends strategies such as opportunity zones and tax allocation districts. The plan calls for the revision of local land-use policies and regulations and infrastructure investments aimed at creating a more walkable development. Central to this strategy is the creation of what has been called the Great Lawn, a public gathering place that can provide an outdoor venue for gatherings, art, entertainment and recreation. This would be a central green space or public park that will span both sides of Pleasant Hill Road.
The LCI concept master plan also presents two options for the future redevelopment of Gwinnett Place Mall. One option envisions the structure remaining intact with a complete redesign of the mall facade, the addition of parking decks and office buildings and residential developments, similar to improvements made at Perimeter and Cumberland malls.
The second option calls for the redevelopment of the mall by removing the roof and running a grid of streets through the mall’s center. Anchor stores Macy’s, Belk, Mega Mart, JC Penney and Sears would be converted to free-standing structures. This long-term option would create a true walkable urban core similar to Atlantic Station for downtown Atlanta.
It is important to know the rebirth of the area is no longer completely tied to the success or failure of the mall. Over the last decade, greater Gwinnett Place has begun to evolve while its mall declined. The area has shown the vibrancy needed to initiate a transformation and rebirth regardless of the mall. This transformation has been evident over the past few years with the renovation of existing retail centers and investment in new development. With or without a revitalized mall, the Gwinnett Place area continues to be a vibrant marketplace of distinct cultures and experiences.
Greater Gwinnett Place’s strategic location in the heart of the region’s most vibrant community has much of the amenities, infrastructure, and transportation needed to complement the area’s rebirth. Even greater transformation is possible, ahead of any rebirth of the mall.
Leo Wiener is chairman of the Gwinnett Place Community Improvement District.
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29 comments Add your comment
SAWB
September 25th, 2012
7:28 pm
No, malls are not dying, but they have to try harder to provide consumers with a first class experience. We can order basically anything we want and have it delivered to our homes, so malls have to be more than just retailers. Malls still have the opportunity to provide that first class experience by including dining, entertainment and shopping in one location.
Also, keep in mind that location is a part of a first class experience and few people have a desire to venture into sketchy areas. Gwinnett Place suffered from a glut of apartments which attracted a different class of shopper. The new malls such as Discovery and Mall of Georgia siphoned off the last few shoppers. Gwinnett Place is a prime example of bad planning on the part of Gwinnett County.
At the end of the day for many of us malls are the closets we have to a “Main Street” and I doubt that is going to change anytime soon. As the economy improves malls will come back. As a matter of fact I see Lenox just announced a major upgrade…
ABB
September 25th, 2012
7:30 pm
By avoiding the mall, your avoiding the crime component. Anyone that’s been to Lenox Square knows that it’s a freak show.
Don Abernethy
September 25th, 2012
7:52 pm
Yes, and under the current administration the thrift stores are increasing.
SAWB
September 25th, 2012
7:55 pm
ABB said, “Anyone that’s been to Lenox Square knows that it’s a freak show.”
I shop at Lenox quite often and I’m not really sure what you mean by, “Freak Show”. Lenox is a very nice mall with a very diverse mix of stores and patrons. Yes, they have an overabundance of teens on Friday and Saturday nights, but what’s wrong with that. Yes, they do have some crime, but I suspect per capita it is not really that high. Yes, Lenox has some challenges, but a “Freak Show”? No, I don’t see it.
Hans Laetz
September 25th, 2012
8:47 pm
Can’t have a salad and glass of wine, Mr. Glimcher, while online shopping? Watch me. Fridge is over here, wine is in the next room. And the UPS guy will arrive at 1:30.
New paradigms are hard to digest.
China’s Ghost Cities and Malls | Fashionable Connection
September 25th, 2012
8:50 pm
[...] Are malls dying? The struggles of some shopping malls here (such as Gwinnett Place in Duluth and Southlake in Morrow) and across the nation have been well-documented. Shopping centers can struggle financially when demographics change, anchor stores pack up and … Read more on Atlanta Journal Constitution (blog) [...]
Chrysalis
September 25th, 2012
9:05 pm
Mall of GA is not an alternative to Gwinnett Mall. Mall of GA is lightyears away especially in traffic. Ill just shop online or go to gwinnett place.
Reality
September 26th, 2012
3:33 am
Lets be honest… Malls die when the riff-raff move in. Gwinnett Place and Dissapointment Mills are prime examples. Gwinnett place is a ghost town — legitimate buyers with cash to spare were driven out years ago by the throngs of gangs and barely dressed baby mamas. Legitimate stores replaced by kiosks selling weaves, toy helicopters, and promises of modeling contracts. It’s now happening across 85 at disappointment mills. The only disposable cash in that mall walks in the side entrance of bass pro shop, gets their stuff, and scoots the heck out to safer ground. Walk through the place on a Saturday night… If you dare. Low cost apartments near malls with public transportation bus stops are the death knell for geographic areas, it’s a well known formula.
Couch Potato
September 26th, 2012
7:42 am
Honestly, I don’t see how any department store stays in business. Online shopping is just too convenient.
nelson
September 26th, 2012
7:42 am
There should be a look at Destiny USA in Syracuse N.Y., the 6th largest mall in the U.S. and brand new. On the top level there is real car racing, hard to believe but true, car racing. Malls have to be inventive to survive.
Suggestion
September 26th, 2012
8:10 am
In my opinion, malls evolved long ago into more of a place where families go to address boredom. Granted, the stores and the property are both there to make money, but it would seem that mall owners would try to embrace this change in consumer view and create more of a park like atmosphere with stores there more as a convenience rather than a destination. Perhaps they could offer more unique dining experiences, lounging areas, unique kids play areas, free wi fi, free movies, cooking shows, etc. The merchants would be able to advertise during those events to draw their targets in to their stores.
xxx
September 26th, 2012
9:41 am
People don’t go where they don’t feel safe. period. Reality sums it up nicely, nothing else to be said.
Midtown Lady
September 26th, 2012
10:21 am
Malls change and die decause of competition and changing customer base. Despite the efforts of Simon Malls to destroy Phipps and Lenox it still exists. (The store “Pure” is an example- trash in the luxury wing of Lenox. Thier unwillingness to work with Apple to go into the former Crate & Barrel spot).
Ghruten
September 26th, 2012
10:55 am
Top item is an interesting read with reasoned, understandable points. Second item is bureaucratic gibberish, which I elected not to finish. How you write is important.
MANGLER
September 26th, 2012
11:13 am
The destination value has pretty much always been what attracts me to one mall over another. Certain key attractions that seem to always work are movie theaters, a range of full service restaurants separate of the food court, interactive activities ranging from the good old arcade to the indoor skate parks and putting ranges I’ve seen, kiddie play islands, a skate rink, the caurosel, and of course a nice mix of store types. Non store events like art shows or dance-athons or D&D contests grab a little bit of everyone in.
A comfortable mall caters to the full range of incomes. Phipps Plaza is not a place where I feel like I can relax or window shop without attitude or sticker shock at every single store. Gwinette Place is sort of the opposite, with few options beyond the teenage or lower income demographic. People with plenty of disposable incomes as well as those who just want a place to socialize or power walk are all required to make a successful location. And a mall that pays attention to how the stores are arranged – keeping an even mix of things rather than allowing types of stores to congregate all next to each other – that sort of partitions a mall in bad ways.
Main annoyance: Kiosk employees, they’re like carnie games at a fair. Cell phone companies, makeup counters, jewelry shiner uppers, and hand creme …. what’s with the hand creme people? I would not want a store that had a Tmobil kiosk in front, as people speed up to avoid making eye contact with the guy who shouts that your phone is in desperate need of upgrading.
Eric T. Deem
September 26th, 2012
6:59 pm
From a business standpoint, a mall doesn’t make sense. The mall owner has to pay for electric power and heating/air conditioning for the space outside the shops in the mall. They probably pass that cost along to the tenants, but then tenants will leave when the rent gets too high.
Shopping Centers, such as Fayetteville Pavillion, are much more economical
Eric T. Deem
September 26th, 2012
7:05 pm
Why hasn’t anyone mentioned the biggest fact about Southlake…the neighborhood around the mall declined into a ghetto, caused by unscrupulous landlords not giving a damn about who they rented to – as long as someone was paying the rent. This led to a criminal element to move in, and subsequently prey on the shoppers at Southlake; the mall management did NOTHING to discourage those that were there just “hangin out”. When shoppers read daily about crimes being committed at a mall, they WILL choose to shop elsewhere, or even online in the safety of their own home.
When mall owners stop treating security issues at the cheapest level possible, hire professionally trained security officers, and work proactively to prevent the shoppers from becoming victimized by the neighborhood thugs that live in the nearby neighborhoods, then malls may bounce back….
Martavious
September 26th, 2012
9:21 pm
Most malls, with a few exceptions like Lenox, are dinosaurs doomed to extinction. People go to malls for entertainment when they’re bored but you don’t see them buying much because nearly everything in the mall can be bought for less on amazon.com.
Not to mention on amazon you don’t have to worry about being knifed on the way back to your car.
Greg Camp
September 26th, 2012
9:31 pm
Indoor malls are dinosaurs of the 70’s and 80’s. Strip malls and stand alone box stores are the ideal shopping for the American consumer. Funny, that is how Lenox started back in the late 50’s. However, online shopping will overtake them both in the near future. Buy UPS and Fed- EX stock when you can!
Baron DeKalb
September 26th, 2012
10:14 pm
Blah blah blah, neither of these gentlemen answer the question or provide any insights worth the electrons it took to print. What Mr. Badie got here was typical corporate MBA real estate b.s. Badie also could add another metro Atlanta dead mall to his list: Avondale Mall (died ca. 2005). Plus North DeKalb Mall and Northlake Mall in DeKalb are breathing hard…Phipps is not what it used to be either. Next time, ask an urban planner or economist who know this subject area and you might get some info.
RustyHinges
September 26th, 2012
11:28 pm
Only local mall I go to is Phipps Plaza, and that’s to see a movie. Hate the hassle.
SAWB
September 26th, 2012
11:47 pm
It does seem as though the folks at Phipps are a little suicidal. Somehow Lego land does not fit with Gucci, Versace and Saks, also what about the food court.
Darrel
September 26th, 2012
11:55 pm
I do not go to malls for any number of reasons but mainly because I DON’T LIKE THEM! I believe that there are a number of people like myself, too. Let’s face it, MEN generally don’t go to malls!! Women, girls and teenagers do malls for whatever reason they like them. I don’t like the crowds, the parking or even the merchandise as it is hugely aimed at the feminine gender’s wants and needs!
.
Malls are currently ‘over-exposed’ in the Atlanta area; there are too many of them already, DUDE! Yes, some may ‘die’ but that is just attrition due to the economy. Also, I will not buy CHINESE made crap and it seems to me that’s all these malls carry anymore. I may be wrong there but that’s just my impression. I personally have not been in a mall, as far as I can remember, for at least five or six years! I don’t feel I’ve missed a thing either!
jaimejan
September 27th, 2012
7:10 am
They should die. Living on the far south side and only having one mall (Shannon closed years ago), the other one (Southlake) should soon go away too; I have not been to one in 10 years at least, but the last time I went I saw it was a place for thugs. My children were never allowed to go to one and hang around. The only store I really miss, is Macy’s. But even when I went to it, at Southlake, it was geared more toward another culture than I am.
shoppingcenter.com.co: Share Ideas to shop.
September 27th, 2012
7:14 am
[...] Are malls dying?Atlanta Journal Constitution (blog)The struggles of some shopping malls here (such as Gwinnett Place in Duluth and Southlake in Morrow) and across the nation have been well-documented. Shopping centers can struggle financially when demographics change, anchor stores pack up and … [...]
Have A Smile! ☺☻
September 27th, 2012
9:14 am
Who is this Michael P. Glimcher guy? He is completely ignoring the real contributing factors to dying malls across the United States, along with again pushing this “revitalization” buzz word.
No, not ALL malls are dying but in general the shopping mall is in a sad state. Its commonly known that a lot of factors have contributed to it:
1. Declining neighborhoods and middle-class residents moving/working in nicer areas. Look at any dead or dying mall, with empty parking lots and no real anchor stores, and look around the area. High crime, closing stores, and etc. A general decline in the quality of people there is not a coincidence.
2. Strip development. When’s the last time you had to go shopping in a mall, since stores are typically located now along main highways?
3. Online shopping. Malls often had retail stores with high prices and more. People have embraced Amazon, eBay, and others. I don’t need an “experience” when I want to buy music or a digital camera. Give me a break!
haha
September 27th, 2012
9:56 am
mall’s used to make money all year long. These days, the only people who can shop in the mall’s are those 47% who pay no taxes, they go shopping after they recieve their tax refunds.
zeke
September 27th, 2012
12:56 pm
It is the population make up of those around the malls that cause failure. Greenbrier never had a chance. Gwinnett Place has been in decline for years with the change in population. This also happens to neighborhoods when affluent residents move out! You cannot change the dynamics! Turning Gwinnett Place into a “fabulous mixed use” site is no more than catering to a change in the demographics of those living in the surrounding areas, and, WILL DO NOTHING TO IMPROVE THE MALL OR THE AREA!
Have A Smile! ☺☻
September 27th, 2012
1:32 pm
“Turning Gwinnett Place into a “fabulous mixed use” site is no more than catering to a change in the demographics of those living in the surrounding areas, and, WILL DO NOTHING TO IMPROVE THE MALL OR THE AREA!”
Hello, exactly!