Thursday, September 20, 2018
Business

What will fill the mall of the future? Probably not more department stores

When the Maas Bros. department store chain went defunct in 1991, Burdines was there to replace it. In 2004, Burdines was wiped away as stores were converted to bear the Macy's name.

But when the time comes, what will replace Macy's? Probably not another department store.

Department store chains have defined the way Americans have shopped in traditional malls for decades. But in recent years, those household name brands have reported significant sales losses year over year, and they are shuttering stores faster than they're opening them. Some experts say it's because department stores are antiquated and they're failing to keep up with the fickle demands of younger shoppers. Maybe that's why fewer shopping centers are relying on traditional department stores to be the anchors they need to draw new customers these days.

"Malls just don't need the big anchors to drive traffic like they used to," retail analyst Jeff Green said at the International Council of Shopping Centers conference in New York last week. "They don't pay rent, so they're costly to a center if they don't bring in shoppers. Now you're seeing centers who used to have four anchoring department stores get away with just one."

We've seen the subtle changes in bay area malls over the years as new brands that aren't department stores have taken over anchor spaces. Saks Fifth Avenue closed its longstanding department store at WestShore Plaza and was replaced by a Dick's Sporting Goods store. Dick's has moved into big-box spaces in malls across the bay area — it has two other stores in Westfield Citrus Park and Westfield Brandon.

Sears leased part of its anchor space at Westfield Countryside in Clearwater to a Whole Foods Market grocery store. A Costco Wholesale opened in a former Dillard's spot at a Westfield mall in Sarasota.

Last year, an upscale spa and health club called Life Time Athletic opened next to Nord­strom in International Plaza. It filled a space left vacant by furniture retailer Robb & Stucky. University Mall is making room for a 37,000-square-foot "health club" as part of an overhaul of the 41-year-old property near the University of South Florida. It's replacing a JCPenney department store.

Furniture stores, bowling alleys, restaurants, even Target stores and Dave & Buster's entertainment centers have filled empty big-box spaces in shopping centers around the country. It's a move that is supposed to give shoppers more reasons to visit a mall again and again, said Justin Greider, vice president of retail brokerage in Florida for Jones Lang LaSalle, a real estate firm.

"You're seeing big spaces being replaced by more restaurants," Greider said. "With so many people buying online, shopping centers have had to add new elements that make people want to come to a center for more than just to shop. With a restaurant and a bowling alley or a movie theater, they can spend the whole day there."

Just like most sectors of the retail industry, department stores suffered during the recession and have struggled to find their niche in the recovery.

"After the recession, we saw retail rebound in two opposite segments — the high-end, luxury brands started to pick up, as did the value-based retailers like T.J. Maxx and Ross. It's those ones that got caught up in the middle that have suffered," Greider said.

A slew of new brands, dubbed "fast fashion" stores, like H & M, Uniqlo and Zara, are capitalizing on millennials and Generation Z by selling inexpensive merchandise and changing the offerings more frequently than department stores. These new stores can have brick-and-mortar spaces nearly just as big as a department store in some cases, too.

"They offer more 'uniqueness' than what you'll get in a department store," Greider said. "It's sort of the same story for restaurants, too. Mom and Dad shopped at JCPenney and eat at Outback Steakhouse, so millennials want to try something else."

These new brands, along with the cultlike following for brands like the Apple Store or Restoration Hardware, now known as RH, drive just as much interest in a mall, or more, as an anchor used to.

In an effort to stay in the game, Macy's launched a line of outlet-like stores called Macy's Backstage this year. No stores have opened in Florida, but the ones in New York feel similar to a Nordstrom Rack, where apparel, shoes and accessories sell for prices similar to an outlet. It's a model that's worked for Nordstrom for many years, and if it's successful for Macy's, the middle-class retailer could reach a younger demographic with its Backstage line and create a more upscale environment in its department stores.

Nordstrom has been aggressively opening Rack stores for years now, but basically halted opening any new department stores. Saks, too, has pushed its Saks Off 5th outlet brand more. Sears and JCPenney have tried to go the way of discount retailers, but haven't found much success.

At the shopping centers conference in New York, real estate brokers and shopping center operators were hard-pressed to recall any interesting discussion about new department store trends or stores opening.

"The discussion is about what offers the best experience that shoppers will come back for," Grei­der said. "Which might include — maybe — one department store."

Contact Justine Griffin at [email protected] Follow @SunBizGriffin.

Comments
Could Trump starve a Tampa Bay transit project of federal funds?

Could Trump starve a Tampa Bay transit project of federal funds?

ST. PETERSBURG — The Central Avenue Bus Rapid Transit line has succeeded where other Tampa Bay transit projects have failed. The project aimed at connecting downtown to the beaches has avoided anti-transit sentiment while securing money and support f...
Updated: 3 hours ago
Tampa General nurses record the last heartbeats of dying patients, making a family memory

Tampa General nurses record the last heartbeats of dying patients, making a family memory

TAMPA — As John Reisinger waited with family at Tampa General Hospital, grief settled in like a fog. So some of the details are hazy.But he remembers the moment when three women in white lab coats approached him.The day before, his niece, Jessica Rau...
Published: 09/21/18
Artificial intelligence might not threaten the human race, but it could be coming for your job

Artificial intelligence might not threaten the human race, but it could be coming for your job

You likely have heard how artificial intelligence is changing the world, from smart phones that keep getting smarter to all the experimenting with driverless vehicles.The rapidly improving technology has also begun replacing workers, especially anyon...
Published: 09/21/18
Former Tampa Bay exec and Chico’s CEO Shelley Broader discusses changing retail in St. Pete visit

Former Tampa Bay exec and Chico’s CEO Shelley Broader discusses changing retail in St. Pete visit

ST. PETERSBURG — When Shelley Broader worked in Tampa Bay, she was turning around a failing grocery store.It was the early 2000s. Amazon wasn’t a powerhouse yet, people were still on Myspace and no one was ordering groceries online. On Thursday, she ...
Updated: 3 hours ago
St. Pete approves biggest budget in city history: $717 million

St. Pete approves biggest budget in city history: $717 million

ST. PETERSBURG — The City Council blessed the largest budget in city history on Thursday night, adopting a $717 million budget that starts Oct. 1.The 2019 budget is about $200 million more than the current budget. That massive increase was driven by ...
Updated: 11 hours ago
Marijuana use is now as common among baby boomers as it is among teens, federal data show

Marijuana use is now as common among baby boomers as it is among teens, federal data show

Talk to your grandparents about marijuana - before somebody else does.The latest release of a massive federal drug use survey shows monthly marijuana use has skyrocketed among older Americans. The past decade, in fact, has seen a sea change in the de...
Published: 09/20/18
Tampa Bay’s fastest selling used car is a Prius. Do you drive the slowest selling car?

Tampa Bay’s fastest selling used car is a Prius. Do you drive the slowest selling car?

Apparently, a lot of people in Tampa Bay are trying to get their hands on a Toyota Prius. An analysis by iSeeCars shows that the eco-friendly car is the fastest-selling used vehicle in the area, averaging 19.2 days on the market. That might not be su...
Published: 09/20/18
Cargill recalls more beef on E.coli worries from Colorado plant tied to previous recall

Cargill recalls more beef on E.coli worries from Colorado plant tied to previous recall

Cargill Inc. is recalling more than 132,600 pounds of ground beef possibly contaminated with harmful E. coli bacteria that food-safety investigators believe has already caused 17 illnesses and one death.The beef originated at a Cargill slaughterhouse...
Published: 09/20/18
Colorado-based alternative fuel company to hire 45 at new $10 million factory in Plant City

Colorado-based alternative fuel company to hire 45 at new $10 million factory in Plant City

PLANT CITY — Alternative fuel firm MLMC Florida will open a $10 million factory near the Hillsborough-Polk county line and will create 45 new jobs paying an average salary of at least $58,383 a year, officials said Thursday.Based in Parker, Colo., ML...
Published: 09/20/18
Publix has pumpkin spice everything on sale, and other deals this week in coupons (Sept. 20-26)

Publix has pumpkin spice everything on sale, and other deals this week in coupons (Sept. 20-26)

Sometimes, the coupon gods align. And, man, that’s beautiful because everyone loves so-cheap-it’s-almost-free stuff.Vegetarians rejoice: This week’s steal of a deal is for you. Publix has Quorn "chick’n" nuggets and patties on BOGO (buy one, get one)...
Published: 09/20/18