The wafting smell of a Cinnabon. The madness of Black Friday shopping. Getting dropped off by your parents so you can meet your friends at the arcade. Your first job as a 16-year-old.
For many Americans, malls aren’t just a collection of stores. They’re a collection of memories. And so when malls struggle—or close—it hits harder than, say, when a Circuit City goes under.
Bloomington’s Eastland Mall is struggling, no doubt. Macy’s closed earlier this year, and JCPenney is next. MC Sports is gone, and so is Gap. Vacancies abound. The food court is down to three eateries.
But the mall isn’t dying, its owners say. The mall is changing, and those changes will accelerate in the coming months as more anchor spaces—like JCPenney—are vacated. CBL & Associates Properties’ regional malls are shapeshifting into what the company calls “suburban town centers,” with fewer fashion anchor stores and more diverse businesses, such as entertainment, fitness centers, and restaurants.
"They need some new, different, and exciting stores in there. There is no doubt about it."
“For us, it’s really redefining what that mall looks like,” said Stacey Keating, spokeswoman for CBL. “It’s adding components of open air and mixed use, so it’s not just retail focused. It’s focused on entertainment and dining, health and lifestyle options. It’s really taking what people assume to be a mall—which is strictly retail—and redefining that into a mixed-use, indoor/outdoor area where people in the community want to gather.”
What might Eastland Mall look like in the near future? Let’s look at recent CBL redevelopments:
- At a mall outside Nashville, CBL bought an old Sears and converted it into H&M, American Girl, and Ulta Beauty stores. The old Sears parking lot was turned into a restaurant and entertainment district, including a Kings bowling alley.
- At its regional shopping center in York, Pennsylvania, CBL turned a former JCPenney location into a Gold’s Gym, which opened in July.
- Anchor stores in other markets have been replaced by healthier box stores, such as T.J. Maxx and Dick’s Sporting Goods, and regional chains.
The timeline for redevelopment at Eastland Mall is unclear, but announcements about new tenants could come soon. The redevelopment was triggered in part by the closure of Macy’s and upcoming closure of JCPenney on Oct. 1, mall officials said.
“We’re in the middle of having those conversations for bringing in other uses, such as retail and dining and fitness and entertainment,” said Eastland Mall spokesperson Melissa Cavanagh. “We will be excited to announce those as soon as we get the green-light from (CBL’s) leasing (staff).”
“There are definitely things that are in the works at this point,” she added.
CBL has redeveloped 28 of its properties since 2013, spending on average $9.6 million on each location. Meanwhile, CBL has sold off its weaker-performing properties—20 transactions with a total value of nearly $800 million.
“Our redevelopment plans are very market-specific,” said Keating.
Are Malls Dying?
Keating said she’s regularly asked by reporters if all malls are dying. No, she says, they’re not.
But some malls certainly are struggling. A recent report from Credit Suisse projected that between 20-25 percent of U.S. malls will close within five years, citing pressures from e-commerce and a glut of recent announced store bankruptcies and closures.
“That’s just not at all based in reality,” Keating said of the Credit Suisse report.
Store closings are on the rise this year, according to Credit Suisse:
U.S. Store Closings
Infogram
Recently, there’s been nothing but bad news at Eastland Mall, said Ron Porth, who’s owned The Mole Hole there for 21 years. Porth said he’s been eager for people to hear some positive news about the mall.
“The consensus has been that Eastland is a goner in a lot of people’s mind,” Porth told GLT. “They (mall owners CBL) have too much of an investment here (to close it). It can limp for a while till they get things straightened out again.”
Porth thinks the mall needs to get “warmer” to draw shoppers in. He’d like to see new restaurants on the property, plus entertainment venues or community events that might attract families.
Porth, who recently considered a move to the Shoppes of College Hills, said he still likes Eastland Mall—particularly the foot traffic it brings in around the holidays. The Mole Hole recently relocated inside Eastland Mall to a newly remodeled spot.
“They need some new, different, and exciting stores in there. There’s no doubt about it,” he said.
Online vs. Brick-and-Mortar
Mall owners face myriad pressures, notably the closure of department stores like Macy’s, said Illinois State University professor Gary Hunter, who teaches retailing and consumer behavior.
“I tend to agree with the (mall) owners,” Hunter told GLT. “I don’t think the mall is dying. But it’s changing, definitely.”
E-commerce continues to be a threat, he said, but it’s not the executioner. Around 9 percent of consumer purchases are online, leaving plenty for brick-and-mortar retailers, he said. The issue, he said, is that online sales are growing so much faster than at physical stores, Hunter said.
“From that growth, retailers know that e-commerce is going to take a bigger share,” said Hunter, who previously worked as a retail manager at Radio Shack. “The question is how big a share. When will it end? What’s the ultimate balance between e-commerce and physical stores?”
CBL says there is strong demand for Eastland Mall, Cavanagh said. Eastland’s occupancy rate is right around the industry average of 92 percent, said Keating, declining to release specific numbers for the Bloomington mall.
It’s a tough story to tell when there are so many visible vacancies at Eastland Mall, including giant going-out-of-business signs at JCPenney.
“I’d say Eastland Mall is really in a transition stage. It’s in a phase where people will start to see the growth and the change at that property,” Cavanagh said. “We’re trying to let our shoppers and the community know that this a phase that we’re going through, and as soon as things are starting to move forward and we can start announcing things, I know that perception will come around and people will understand this takes a little time.”
Hunter said malls need to change up their mix—as CBL is doing—to counteract the decreased importance of department anchor stores. Malls could even add supercenters—think Walmart, which has general merchandise and groceries—to boost foot traffic.
“People are going to come because they have to get groceries,” he said. “And then hopefully that attracts them to the other stores too.”
When most of CBL’s properties first opened—like Eastland Mall in 1967—they had four to five fashion anchor stores. Now it’s one to three fashion anchors, with the rest of the space being redeveloped into retail, entertainment, and other uses, Keating said.
But don’t confuse closing stores with a closing mall, she said.
“Bankruptcies really do make the way for other local or regional entrepreneurs to grow their business,” Keating said. “As you look back at our list of tenants in 1993, only two or three of those retailers still exist today. There’s been this chaos and turnover in retail as long as retail has been a business.
“When some retailers close, that’s just a natural evolution of the industry,” she added. “It makes way for other uses to come up and expand their presence.”
You can also listen to the full story, as it aired on GLT's Sound Ideas:
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