Starting in 2008, the argument that malls in the United States are dying gained traction. This New Yorker piece takes apart the argument by segmenting malls based on location and type. In this sense, only one type of mall in one place requires last rights.
As Malcolm Gladwell discussed in this piece, the enclosed shopping box located in a remote location accessible only by freeways happened by accident. The first American mall was conceived as part of a larger development. None of the remaining development occurred. Instead the legacy of that first mall remains a forlorn looking object plopped in the middle of a vast acreage of blacktop parking lots.
The death of these malls starts in the early 1980s because of these malls reliance on mass retailers such as J.C. Penney, and Sears to fill space and attract consumers. In various regions other retailers such as Marc’s, Marshall Field, and Famous Barr occupied considerable space in these malls. Two forces conspired to kill these malls.
One, consolidation among mass retailers. The Macy’s known today reflects a decades-long consolidation of regional retailers. In early 1992, saddled with debts mostly owed to mall owners, Macy’s filed bankruptcy to reorganize the retailer’s debt. The process harmed mall owners’ financial position because Macy’s renegotiated new lease deals. The resulting consolidation also meant fewer tenets, which left considerable dead space in these malls.
Two, disappearing middle class. Consumers for J.C. Penney, Sears, and Macy’s have been dwindling for the last 30 years. All signs indicate the middle class will not return to pre-1980 levels. With fewer consumers, the mass retailers that occupy a large chunk of mall space will die. In turn, so will the enclosed mall.
Malls such as outdoor malls and lifestyle malls will continue to exist. Indeed, Simon Property, one of the largest mall owners, kept those type of properties in its portfolio. However, the company jettisoned almost all of its indoor, anchor-dominated malls.