Are Malls Going Away?
I remember as a kid riding my bike up to the Lake Air mall during the summertime. Even if by myself, it was always fun to go up there and look around. Malls were very popular back then. They were where you went to shop. Amazon.com or the "Amazon effect" didn't exist. Today kids still hang out in malls. However, brick and mortar stores have been decimated by the "Amazon effect." It is like the original Rocky movie where Rocky and Apollo Creed where fighting it out in the ring. They battled until the last sound of the bell had been rung, and the heavyweight champ won the first battle.
Retail and Amazon have been battling it out. Amazon.com has been on the verge of knocking out many major retailers, putting them out of business. However, retailers have managed to survive through bankruptcy protection and store closures. The pandemic could be the final blow to the major retailers as well as to America's malls. So goes the major retailers, so goes the malls.
Let's start with the Mall's major problem. JCPenny and Macys take up the largest amount of mall space at 6.2%. Both retailers are planning hundreds of store closings across the US. JCPenny has been on life support for years and currently in bankruptcy protection. Macy's is a little better off but not by much.
In addition to JCPenney, Neiman Marcus, Stage Stores, and J.Crew have all filed for bankruptcy protection during the pandemic. There are 117 million square feet of mall space in America. These four bankrupt retailers occupy 75.2 million square feet or 65.4% of the 117 million available mall space. This doesn't even take into effect all of the other smaller retailers who occupy mall space. If you haven't been to a mall lately, go, and you will still see stores that have not opened up yet.
As I have said the entire time in regards to this pandemic. The pandemic exposes financial weakness. It certainly could be delivering the final blow redefining retail as we know it.