By CULLAN STAACK/ Montana State News
Shopping malls are losing some of their most valuable tenants—department stores—at an alarming rate. Retailers like Sears, JCPenney and Macy’s have been closing hundreds of locations over the last several years, leaving dead or dying shopping malls in their wake as they try to remain profitable amid the growing threat of e-commerce.
The slow death of the American shopping mall is not evenly distributed. A disproportionate number of recent high profile store closure announcements have been in communities that are already struggling, according to Conor Sen, a Bloomberg View columnist and portfolio manager for New River Investments. Bozeman does not fit the profile of a struggling community, and as a result, the Gallatin Valley Mall is not currently exhibiting any signs of future foreclosures.
However, the MTN News at KRTV.com reports that the North Dakota-based retailer Vanity will be closing more than 140 stores after filing for bankruptcy, including the store in Bozeman’s mall. While this appears to be a small anomaly for Bozeman’s economy and most likely will not have much of an effect on the success of the Gallatin Valley Mall, Vanity’s situation continues a problematic trend of department stores closing across the country.
With hundreds of collective store closures (Macy’s, Wal-Mart and others) and bankruptcies (Sports Authority and Sports Chalet) in 2016, the evidence is enough to make even the most devoted shopaholic wonder if the future of commerce is one big Amazon.com screen on your personal computer.
At least one market analyst feels pessimistic about the future of shopping malls with the convenience of online shopping at our fingertips.
“It’s going to be a year of transition and a year of reckoning and a year of awakening for retailers,” said Marshal Cohen, National Purchase Diary (NPD) Group’s chief industry analyst.
The issues that faced retailers in 2016 are likely to continue to face them in 2017, perhaps accompanying an even greater sense of urgency. The ongoing shift to online and mobile spending, a consumer taste for experiences instead of products, high promotional activity and a “hollowing out” of the middle class that leaves less disposable income on the table are all factors that contribute to the exponential growth of online shopping.
As Amazon and other major online shopping forums continue to gain traction amid falling shopping mall interest, economists suggest drastic changes and bold improvements. “Mid-tier malls are going to need to step up their game,” NPD’s Cohen says, referencing the addition of restaurants, movie theaters and lifestyle stores. “The food court won’t be good enough.”
– edited by Chelsea Anderson