People walk through a nearly empty shopping mall in Waterbury, Connecticut. | Getty Images
The pace of retail store closure announcements didn’t slow down much this week, following a brutal last week for malls and shopping centers across the U.S.
Dollar Tree said this week it will be closing up to 390 Family Dollar stores. Apparel retailer Abercrombie & Fitch Co. said it plans to shut up to 40 stores. Bankrupt clothing company Charlotte Russe has started liquidation sales and now will shut all of its more than 500 stores, up from its previous plans to just close 94 locations. To top it off, Amazon said this week it’s closing all 87 of its pop-up shops in Whole Foods stores, Kohl’s stores and malls across the U.S., starting in April.
Taken together, as of this Friday, 4,810 store closures have been announced by retailers so far this year, according to Coresight Research. Just a week ago, that tally was at 4,309. Meanwhile, Coresight said it’s tracked about 2,264 store openings so far in 2019, including some by fitness brand Peloton, Ulta Beauty, online apparel company Indochino and Ross Stores.
Still, the closures far outweigh the openings, leaving real estate owners hunting for new businesses or unique concepts to fill empty storefronts, now. Other retailers closing stores in malls this year include Gap, J.C. Penney, Victoria’s Secret, Tesla and Chico’s.
To keep their properties attractive despite the headwinds, some mall owners are getting creative by building out spaces that allow for a handful of brands, many of them born on the internet, to share a store and sell there for a shorter duration of time, rotating in and out. The third biggest mall owner in the U.S., Macerich, has a business doing this called BrandBox. Mall and shopping center owners are also seeking out so-called digitally native brands like mattress maker Casper, shirt brand Untuckit, activewear retailer Rhone and beverage brand Dirty Lemon to lure them to open up stores at their properties. And then they’re adding co-working spaces, hotels, gyms and even apartments to take shuttered retail space.
“I think the store rationalization will continue. We are still over-stored,” Marie Driscoll, managing director of luxury and fashion for Coresight, said. “But in some places — the A malls — people are panting to get into those locations. So it’s all a question of where you are and what you’re paying to be there. But the overall, secular trend is still for store rationalization.”
Amidst all the chatter about retail store closures, real estate developer Related will open a massive shopping mall in New York, The Shops at Hudson Yards, next week. You don’t see many malls still being built from the ground up today. The property will be anchored by department store chain Neiman Marcus, with retailers ranging from luxury to discount — including Coach, Madewell, Athleta, H&M, Fendi, Lululemon and Cartier — setting up shop there. Real estate analysts in the area say it will be a true test to see if the city can handle another retail development, or if shoppers already have enough to choose from.