1 in 3 American malls are doomed

[Hawkeye10]

About one-third of American malls are not long for this world, retail analyst Jan Kniffen said Thursday.

The CEO of J. Rogers Kniffen Worldwide Enterprises spoke after Macy's reported its worst sequential same-store sales decline since the financial crisis. Macy's and other retailers got slammed by a warm winter and cool spring, as well as the continued migration of millennials to fast fashion and off-price stores, Kniffen said.

"On an apples-to-apples basis, we have twice as much per-capita retail space as any other place in the world. The U.K. is second. They're half of what we are. So, yes, we are the most over-stored place in the world," he told CNBC's "Squawk Box."

With the U.S. having an estimated 48 square feet of retail space per citizen, the footprint is poised to decline "pretty fast," Kniffen said.

In his view, about 400 of America's 1,100 enclosed malls will fail in the coming years. Of the survivors, about 250 will thrive and the rest will struggle. Likewise, Macy's probably needs 500 of its roughly 800 existing stores, he said.

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

 

[Van Basten]

I'm shocked that Kmart is still even a thing!

 

[Winchester]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

Good they need to convert them to Amazon warehouses.

 

[Jack Fabulous]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

What is the cause of all of this? Ever hear of Amazon?

 

[shrubnose]

Where will all of the mall rats go?

Are any bowling alleys still open?

 

[Erod]

Malls have become a primary hang-out for gangs and people that have absolutely nothing to do. They're not safe.

And those Jamaica-beach-like salespeople in the center walking area that badger you to death to try their skin care products or sit in their vibrating chair.....

No thanks.

 

[Winchester]

Malls have become a primary hang-out for gangs and people that have absolutely nothing to do. They're not safe.

And those Jamaica-beach-like salespeople in the center walking area that badger you to death to try their skin care products or sit in their vibrating chair.....

No thanks.

Have? They always were the hangouts for people with absolutely nothing to do... that and old people wanting to do laps indoors.

 

[Redress]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

Hrmmmm.....

 

[Winchester]

Hrmmmm.....

Never underestimate the lure of being able to say "Thanks Obama".

 

[azgreg]

Good they need to convert them to Amazon warehouses.

With drone delivery?

 

[Redress]

Never underestimate the lure of being able to say "Thanks Obama".

 

[danarhea]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

Don't forget online ordering, which has also taken a big bite out of the malls.

 

[gdgyva]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

this is nothing new

has been in the works for at least a decade now

why fight the crowds, the noise, the parking, and the traffic when you can let your fingers do all the work

and whatever you need is shipped directly to your door in days...or less

i used to own stock in a number of REIT's that owned commercial large properties (malls and strip malls)

i sold all of it a few years back, and bought amazon with the proceeds....

their earnings still suck...but the stock price keeps going up

macy's, jc pennys, sears, and all the cornerstone mall retailers are having issues

it is only a matter of time

 

[Redress]

With drone delivery?

I live in the greater Atlanta metro area. I miss drone delivery by just a few miles...I R pissed.

 

[Hawkeye10]

Malls have become a primary hang-out for gangs and people that have absolutely nothing to do. They're not safe.

And those Jamaica-beach-like salespeople in the center walking area that badger you to death to try their skin care products or sit in their vibrating chair.....

No thanks.

Agreed, that was really dumb, it wrecked a lot what remained of the appeal of malls in the drive for revenue. We dont like clutter generally anymore, that was a 1980's thing.

 

[Hawkeye10]

this is nothing new

has been in the works for at least a decade now

why fight the crowds, the noise, the parking, and the traffic when you can let your fingers do all the work

and whatever you need is shipped directly to your door in days...or less

i used to own stock in a number of REIT's that owned commercial large properties (malls and strip malls)

i sold all of it a few years back, and bought amazon with the proceeds....

their earnings still suck...but the stock price keeps going up

macy's, jc pennys, sears, and all the cornerstone mall retailers are having issues

it is only a matter of time

There is something new going on though, you cant deny that. Why are these guys suddenly looking at Great Recession like numbers? JCP had 11 quarters of per store sales gains as they try to save the company, analysts were expecting +3% yoy today......what they got was a negative number instead. WTF? And yes we can talk about mistakes Macy's has made management wise but Nordstrom tends to do things well, and their customers clearly have money, and yet they are suddenly getting creamed.

Lots of questions about what is going on.

 

[azgreg]

There are two malls near me. One was just about completely out of business. Walmart went in and the light rail has a stop there and now it is flourishing. The other one is half empty, but Walmart is reported to be going in there as well opening later this year. We shall see.

 

[humbolt]

I've never liked malls. I've never liked that white stuff that forms in the corners of Bill Nye's mouth, either. If the malls and Bill Nye's mouth both close, I'll be happy. These are the only two obstacles between me and complete bliss. Wait a second. There's bubble packs, too. Malls, Bill Nye and bubble packs. And those things you buy at the grocery that claim to hold two servings. Two servings? For what? A mouse? Liars. So, malls, Bill Nye, bubble packs, and misleading labeling. That and whatever perversion of real food some health nut is hawking - like this beet crap some woman is pushing. Who in the hell needs to consume the equivalent of ten beets a day or whatever? And it doesn't taste like dirt? That's a selling point? So, malls, Bill Nye, bubble packs, misleading labeling, and beet poison.

 

[Citizen.Seven]

It's been at least seven years since I bought anything in a "mall", and nearly 20 since I even semi-regularly shopped in them. About the only thing would be suits or other nice/formal clothes at an anchor store like Macy's or similar, but even then there are MUCH better options than going to a mall. A great many of them are GFZs so no, no thank you, I'll take my business elsewhere.

 

[LowDown]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

A lot of malls have already failed. They fail all the time, always have. I don't think this is anything new.

At least in the Houston area the cycle tended to be that old malls dwindled as new ones were built.

 

[poweRob]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

I like the concept of a mall but I don't like how they are run. There are companies that are there to put stores in malls. This is why they are all the same stores and all goddamn cookie cutter and terrible. All the stores they choose are not daily shopper stores which is why they die. They are clothes, shoes and things you buy on occasion.

I'd like to see them transformed into more of a hangout place like, have better food choices and coffee shops/bakeries. One mall over here in Santa Fe does well, it has a Sprouts grocery store, an Albertsons grocery store, a post office and a couple nice sit-down restaurants. These are things you can shop daily or rather regularly. That gets traffic into the malls to shop the other stores more simply by pulling more regular traffic there.

Have the food court have some booths and wi-fi rather than dirty tables and metal chairs. Put up some baffling to help with reverberating junk noise that malls have due to so much hard materials making everywhere you go sound like a nonstop noise factory. This helps make it a collaborative place if you wanted to work/lunch meeting with some folks. Simple things like that.

And if you can't sell out the spaces, instead of having a dead store space just cordon it off in chunks and have some office space for lawyer's offices or any other kinds of rent-able business offices. Having offices there will help keep the food courts making money for the lunch period.

 

[Carjosse]

http://www.cnbc.com/2016/05/12/1-in-3-american-malls-are-doomed-retail-consultant-jan-kniffen.html

Almost all of the main retailers are reporting horrible sales numbers, JCP today being just the latest. JCP, Sears, Kmart are all going away, Macy's is going to shrink big time, there is just no way we avoid a massive shrinkage of brick and mortar stores. Lots of controversy about why the numbers are so bad, but my gut instinct is that increased housing and Obamacare healthcare costs are sucking people dry, people simply have little money to spend, and what they do have they want to spend on experiences rather than accumulating crap. However I do note that a increasing number of experts are saying that retailers have not modernized the shopping experience inline with customer expectations, that this failure to perform has lead to a boycott of the entire sector in favor of Amazon.

Oh well, I hate shopping in general and mall in particular. It will be sad to see all of those malls dead, all of those people out of work, but it is going to happen anyways.

It has nothing to do with Obamacare, a little bit to do with property prices but 99% of it is the death of the traditional retailer and the rise of e-commerce. You can see this is because not only in America is this happening (therefore Obamacare and housing prices are not to blame), it is around the world. In today's market you have to be a master of both brick and mortar and e-commerce. Pureplay retail and pureplay e-commerce are both dying but they need to expand into each other's spaces. E-commerce sites like Amazon are opening stores and the stores you named are ditching physical locations for e-commerce. Why would someone go to a mall when you can just go to Amazon, which is both more convenient and cheaper. I think you are vastly overestimating the effects on income from Obamacare.

 

[americanwoman]

It's too bad, I have great memories of hanging out at the mall. I don't go as much since the ones closest to me closed and recently the one I did go to changed their food court and removed the place that made this amazing chicken teriyaki.

 

[americanwoman]

Why would you go to a mall when you can just go to Amazon, which is both more convenient and cheaper.

For me it would be to get out. If it's the middle of winter, it's a nice place to go kill some time, walk around, and window shop. I enjoy the convenience of shopping from home but I am also more the type to want to walk around and get out of the house.

 

[Carjosse]

For me it would be to get out. If it's the middle of winter, it's a nice place to go kill some time, walk around, and window shop. I enjoy the convenience of shopping from home but I am also more the type to want to walk around and get out of the house.

Well that is why companies like Amazon are opening them, to showroom their products, let people feel and touch them, then go home and order them. Showrooming has become a very important part of e-commerce. But overall people just do not want to go out and shop all that much anymore.