Long trips to downtown department stores like Hudson’s were falling out of favor, and the fast-growing suburbs were pushing for their own clean, air-conditioned alternatives. Detroit and other cities like it across the country were increasingly being labeled as dirty and unsafe
Developers and transportation planners were happy to oblige. From the mid-1950s to 2005, about 1,500 malls were built in America. It’s been a long slide since then. With shoppers, businesses and investments pouring into urban areas, many suburban malls are dying. Experts predict that as many as half of America’s malls will be torn down or reconfigured.
“My view on enclosed malls is that there are 100 malls in this country that will always be dominant shopping destinations,” said Don Wood, chief executive of Rockville, Maryland-based Federal Realty Investment Trust, owner of 17 million square feet of open-air U.S. shopping centers. “It’s heavily populated, affluent areas. But there are 1,000 other malls in this country, and the future for those is bleaker.”
When a mall endures a public deaths, letters fall off the marquee and weeds grow in the parking lot. They are used as practice sites for fire departments or sets for movies. Mega-churches hold services there.
The “mallification” of America was the last major revolution in retail. Enabled by the network of interstate highways built in the 50’s, retail moved to the suburbs along with the Baby Boomers. Since the advent of the mall, we’ve had minor retail trends: outlets, “lifestyle centers”, and the rise of Walmart and of course the “Category Killer” big box formats.
Malls were built and people came, in droves. But now we find that America is overstored with nearly 50 square feet of retail for every man, woman and child. Since the beginning of the Bush recession, we have seen malls die as a square footage rationalization has begun, with spending no longer sustaining the overstored situation.
Sears, Best Buy and J. C. Penney, retailers aimed squarely at middle-class Americans, are in dire straits. Sears Holiday Comps were -8%; Best Buy -1%; JCP +2% but burning cash. All three have closed stores in recent years and will likely face even more closings.
“Within 15 to 20 years, as many as half of America’s shopping malls will fail,” Howard Davidowitz of Davidowitz & Associates, a retail consulting and investment banking firm, said to Forbes Magazine. “Middle-level stores in middle-level malls are going to be extinct because they don’t make sense, that’s why we haven’t built a major enclosed mall since 2006.”
He said that only upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive.
Furthermore, there is a generational story behind what’s happening to shopping malls. And if you want to know how it will end, you have to pay attention to each generation’s role.
What most impressed the G.I.s (and the Silent Generation who succeeded them) about malls was their enormous efficiency. Then came suburban Boomers, who grew up with these newly minted malls as kids.
As they matured, many Boomers soured on what they regarded as the soulless and artificial consumerism of malls and began to champion what business author Joseph Pine calls the “experience economy” — turning stores and restaurants from mere retail outlets into places that mean something (think Rainforest Cafe or Build-a-Bear Workshop or L.L. Bean). That thinking not only inspired more stores to include a “tourism” component, but it also drove the surging popularity of lifestyle centers in the early 1990s.
A change in shopper habits has reduced store traffic, permanently. Retailers got only about half the holiday traffic in 2013 as they did just three years earlier, according to ShopperTrak. The data firm tracked declines of -28% in 2011, -16% in 2012 and -15% in 2013. Online sales increased by more than double the rate of brick and-mortar sales this past holiday season.
More recently, ShopperTrak noted that shopper visits declined by more than 5% or more in every month for the last two years. In June, Store visits declined almost 7% and nearly 5% in July.
Today, malls are no longer where young people hang out. Young people do everything on their phones. The good, top end malls will survive, but the rest are doomed – Northland being its latest casualty.
Northland was placed in receivership and all remaining assets will be liquidated via an online auction at Orbitbid.com. The featured online auction will be held on Tuesday, May 19, 2015.
Orbitbid.com will hold an online auction starting at 8:00am featuring thousands of items consisting of restaurant equipment from the food court, tables and chairs, children’s play center, fixtures and décor, large assortment of shelving and racking, maintenance equipment, security equipment, very large assortment of Christmas decorations, machine shop including table saw, band saw, lathe, torch set, mill, grinders, power and hand tools, key cutting system, also including contents of mechanics garage: car hoists, tire changer, tire press, air compressors, sweeper truck, tow behind generators, assorted office furniture, Sky Jack 4626 man lift, and much more.
Preview day will be on Monday, May 18th from 9:00am to 4:00pm as well as auction day from 8:00am to 5:00pm.
“It’s the end of an era,” said Dwanda Wilkes, 50, of Detroit. “Northland was the place to go if you wanted to hangout, see friends or just get some good shopping in. It’s a Detroit institution. I wonder what will eventually become of the place…definitely not a mall.”
Zack Burgess is an award winning journalist. He is the Director/Owner of OFF WOODWARD MEDIA, LLC, where he works as a writer, editor and communications specialist. His work can be seen at zackburgess.com. Twitter: @zackburgess1
Why the mall model doesn't work anymore – Northland
