Business Insider/Hayley Peterson
Hundreds of shopping malls in the US are at risk of closing.
Since the start of the year, more than 1,500 store closures have been announced by retailers including JCPenney, Macy’s, Sears, American Apparel, The Limited, and Abercrombie & Fitch. Most of the closures will happen over the next several months.
The nation’s highest-performing malls, which are characterized in the industry as “A” and “B” malls, should be largely insulated from the fallout.
These shopping centers, which represent about 30% of malls in the US, are already battling declining customer traffic, falling occupancy rates, and low sales productivity, according to the real estate research firm Green Street Advisors.
When they lose a tenant, especially a department store, it’s often challenging to find a replacement.
“Lower productivity centers are increasingly at risk of obsolescence,” Green Street Advisors analysts wrote in a recent report. “The top 300-400 malls by quality should fare well for the next several years, but it is reasonable to assume that several hundred lower quality malls will either close or become irrelevant retail destinations over the next 10 years.”
Source: Business Insider SG