Dead Mall

Rolling Acres Mall Nicholas Eckhart

  • Iconic mall-based department chains, like Sears and JC Penney, are announcing hundreds of store closures in 2017
  • More chains are expected to announce shutdowns over the next decade
  • Experts say the shuttered locations could turn into other businesses that benefit from the large square footage, like fitness centers, churches, offices, public libraries, movie theaters, and medical clinics

When Edina, Minnesota’s Southdale Center — considered the first modern American mall — opened in 1956, two department stores, Dayton’s and Donaldson’s, anchored it. Two decades later, Southdale expanded to allow for a JCPenney to move in, and the mall’s sales boomed.

Since then, the department store has served as the mainstay of the indoor suburban mall in the US. But a growing number of locations will close their doors this year.

In early June, for example, Sears announced that it will shut down 72 more stores including Kmarts and auto centers, meaning over 170 locations will close in 2017. When they shutter, Sears will have nearly half the number of stores it had five years ago. Another popular chain, JC Penney, also recently said it will close 138 stores due to waning traffic and sales. Most of these locations started liquidation in April, and will shut down by the end of June.

And when department stores die, the mall itself sometimes follows, since the former pays a large percentage of the building’s rent. In a new report, Credit Suisse analysts expect that 20% to 25% of malls — about 220 to 275 shopping centers — will shutter over the next five years, largely due to department store closures. Retail experts attribute the traditional mall’s decline to changing habits of American consumers, who increasingly prefer to spend money online or on experiences rather than objects.

Department stores at malls of the future have an opportunity to fulfill other community needs besides commerce, June Williamson , an architecture professor at the City College of New York and an author of “Retrofitting Suburbia,” tells Business…