THE retail industry is struggling in today’s economic climate, with the mass closure of stores such as Macy’s, Nordstrom, and Claire’s pushing the rise of so-called “ghost malls.”
However, these seemingly abandoned, high-vacancy shopping centers are making a major comeback, with some unusual but exciting tenants moving in.
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Ghost malls, also known as dead malls or zombie malls, are characterized by low foot traffic, high vacancy rates, and physical deterioration.
They are becoming increasingly common due to the rise of online shopping coupled with shifting consumer preferences, changes that were hastened by the Covid-19 pandemic.
While some malls are facing decline and closure, others are seeing a resurgence, such as the Dayton Mall in Dayton, Ohio, 50 miles north of Cincinnati.
Opened in 1970, the beloved mall saw decades of success before being hit with a wave of vacancies in recent years, exacerbated by the closing of the anchor stores Sears and Bon Ton in 2018.
The 162,000-square-foot space where Sears previously sat was sold to Crossroads, a local church that transformed 90,000 square feet of the former retail space into a thriving place of worship.
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“Nothing says dying mall like having a church move in,” Rebecca Maguire, marketing manager of the Dayton Mall, told CNBC.
“But Crossroads has a huge following, and they are so community driven that I think any mall in the world would be lucky to have a partner like that,” she added, noting that the church has drawn thousands of people to the once-dying mall.
The trend of repurposing empty anchors is proving to be a saving grace for ghost malls across the country, although it’s taken a while to take root, according to Stephen Lebovitz, CEO of CBL Properties, one of the biggest mall landlords in the country with over 155 million square feet of mall space.
“These projects to backfill anchors don’t happen overnight. It has taken several years to recover from anchor closings in 2017 to 2018,” Lebovitz told CNBC.
Several businesses have taken over the empty spaces at ghost malls, from The Cheesecake Factory and Dick’s Sporting Goods to Dave & Buster’s and hotels.
Apartments and large food courts have also occupied vacancies in declining malls, as have entertainment venues such as bowling, laser tag, and yoga.
The trend of revitalizing the American mall is a move to capture and capitalize on the priceless sense of nostalgia that emanates from these shopping centers.
“Most Gen X and millennials spent their adolescent years making memories in malls – going to the food court with their friends, smelling all the lotions or perfumes at a store, or just generally hanging out chatting,” licensed mental health counselor Dr. Vassilia Binensztok told CNBC.
“For many people, going to the mall can make them feel more like themselves as it evokes memories of those younger days.”
US braces for ‘45,000 store closures’
Some 45,000 bricks-and-mortar stores could close in the next five years, experts have warned.
Several major retailers have announced store closures or gone out of business altogether in recent years.
In 2023, chains such as Foot Locker announced plans to close up to 400 outlets by 2026.
While, other well-known retailers like Tuesday Morning and Mitchell Gold + Bob Williams filed for bankruptcy in 2023.
Bed Bath & Beyond has closed all of its brick-and-mortar stores and is now an online-only retailer.
The most affected retailers have been clothing, consumer electronics, sporting goods, hobby, book, music, and home furnishing stores since the start of 2019.
UBS has predicted the total number of retail stores will drop by 45k from 958k to 913k.
Despite that, the report says that certain stores should thrive while others decline.
It said retailers such as Walmart, Costco, Home Depot, and Target, could be among the winners.
MALL MAKEOVER
Opened in 1960, the Lloyd Center – another ghost mall in Portland, Oregon – has similarly been brought back from the dead.
The once-popular mall slowly saw its anchor stores including Nordstrom, Sears, Marshall’s, and Macy’s turn off their lights over the past decade, going into foreclosure in 2021.
The shopping giant is making a major comeback, however, and now houses 90 stores, 60 of which are small businesses, nonprofits, and activity spaces.
What once was Spencer’s is now a pinball museum, Brookstone became a scene for magic shows, and a former Foot Locker has been transformed into an art gallery.
Shoppers can also hit up pinball museums, take roller-skating lessons, and even visit a unique store selling Star Wars-inspired light sabers.
“It really is like a startup incubator for new creative retail, and I think Portland really needs that,” Matt Morrison, owner of Legion Sabers, told Oregon Live.
The Lloyd Center is now home to local food vendors such as Stoopid Burger, LoRell’s Chicken Shack, La Korita, and Yummy Treats.
Beyond just dining and retail, consumers can find everything from tabletop gaming stores and children’s puppet shows to electronic music classes at the revived mall.
The Lloyd Center will likely remain open at least through this year’s holiday season as long-term redevelopment plans move forward, according to developers.
“It’s amazing to see what’s been happening at Lloyd Center during this time of transition,” said Tom Kilbane, managing director in Portland for Urban Renaissance Group.
“There’s a very entrepreneurial spirit and a sense of community that’s developed. It’s a very Portland vibe.”
Although some malls are making a comeback, the retail industry as a whole is still struggling to stay afloat, characterized by mass bankruptcies and closures.
For example, an iconic 90s mall favorite is hosting closing sales with up to 75% off after its second bankruptcy – see the list of spots shutting down.
Meanwhile, a beloved furniture retailer is speeding up its closures with 30% off sales at six more stores just weeks after filing for bankruptcy.
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