Malls in America were already declining with the rise of online shopping. Why go out to a huge building when you could order it from home? With the onset of the COVD-19 pandemic, it looks like it might be the final nail in the coffin of these once-legendary shopping centers.
Analysts at Coresight Research, which tracks retail closures, projected that about 25% of America’s malls would disappear within three to five years. However, with the pandemic, that figure could rise as high as 50%. This wouldn’t affect high-end malls, with lots of luxury retail tenants, as badly. However, so-called “B” and “C” malls with lower-priced stores and vacancies face a significant challenge to staying open.
Department stores and retailers like J.C Penney and Brooks Brothers have recently filed for Chapter 11 bankruptcies, having been truly hit hard by this downturn. Even before the pandemic, these companies (and those like Neiman Marcus) had billions in debt, indicating their declining status. Now that people can’t go to these stores, their key to success has been melted down and tossed in the trash pile.
If malls are going to survive, their owners will have to get creative or hope this pandemic ends swiftly. Otherwise, the mall culture that so many people have grown up within the U.S. might be gone for good.