More Bad News For Malls

Source: silverdoctors.com

Malls continue to lose stores and the trend for this year looks like it will be more of the same. I recently read articles indicating that the flagship stores are scuttling more of their locations. If you can call Dick's Sporting Goods a flagship, I would anticipate that they will be downsizing after their decision to end selling assault rifles.

Last year Dick's was the only ray of hope for the malls, they opened large stores to replace the vanishing Sears and Macys. Over the past decade, malls have been losing ground on their profitability. The major change was etailing. Understanding the reasons malls came to be was that the people wanted convenience. Prior to malls one would have to make several different stops to complete their shopping list, malls main selling point was one stop shopping.

With the advent of etailing, the malls are no longer the most convenient way to shop. People are moving away from the malls not only due to etailing but the economy is forcing people to cut back on their frivolous purchases. Regardless of what the BLS reports current unemployment is, reality paints a different picture. As the economy worsens more people denying that we are in trouble are waking up to the fact that our country is bankrupt, we are living on borrowed time.

Source: silverdoctors.com

In the attempt to stave off bankruptcy, merchants are charging off sales which have been purchased online but returned through the brick and mortar stores. The merchants leasing space in a mall usually have to pay a percentage of their sales as part of their lease. By reducing their reported sales will also lower the amount of their future lease increases.

It appears that society is moving away from a mall-concentric society. I really don't see that as a bad thing as malls are turning into cesspools where teenagers hang out to cause havoc. Understand I am not attempting to stereotype teenagers, but the fact remains that malls are becoming a breeding ground for crime.