In 2016, a study by financial consultants Green Street Advisors found that 800 — or about one in five — department stores would have to close for that industry to claw back to pre-Recession profits.
This week, Macy’s announced it would close stores in four Philadelphia area malls, as a part of a longer list of 68 closures around the country happening this year. Plymouth Meeting and Neshaminy malls in Pennsylvania, and the Voorhees Town Center and Moorestown Mall in New Jersey will all lose the anchor store this spring.
Also looking ahead, Kmart and Sears announced 2017 closures this week, including three Kmarts leaving South Jersey.
In a statement, Macy’s said the closings are part of a plan that “supports the remaining stores, reinforcing the strategy of fewer stores with better customer experience.” Three of the 68 have closed, with most of the rest closing by midyear. All in all, the department store chain will eventually close 100 of its 730 stores.
The departures are a challenge but not necessarily a death sentence for area malls, according to Steve Wray, executive director of the Economy League of Greater Philadelphia.
“It gives the mall a chance to reposition themselves, but it also leaves a gap,” he said.
The trend away from malls as shopping-only meccas toward entertainment centers means those big boxes may be converted into something other than a retail use.
Mall owners now are now “looking at using that space for restaurants, for movie theaters, for entertainment, but also perhaps for linked-type stores,” he said, like a family of stories owned by the same company or selling the same type of goods.
In this region, King of Prussia and Cherry Hill malls follow a trend towards sprawling shopping centers with high-end and destination retail, mixed in with restaurants by name-brand chefs. But, their size and relative success can make it harder for smaller malls to compete for both foot traffic and marquee businesses, according to Wray.
PREIT, which owns three of the four area malls that Macy’s is leaving, did not grant a request for comment.
One of its effected properties, Plymouth Meeting Mall in Montgomery County, has already taken steps to adapt to a new retail climate. It’s added a Whole Foods, exercise classes and a bowling alley, as well as breaking ground on a Legoland Discovery Center last year.