The day the malls stood still - Top Stocks Blog - MSN Money
 
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The day the malls stood still

Posted Dec 31 2008, 09:43 AM by Minyanville
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Goodbye, malls. Paltry sales at retailers have finally taken a toll on the buildings that house them, and many economists are predicting serious trouble ahead for mall owners.

According to an article on CNBC.com, “the dismal holiday shopping season… could take down some US malls struggling with vacancies, softening rents and their own large debt loads.”

Some mall staples, like KB Toys and Circuit City, have already filed for bankruptcy. The International Council of Shopping Centers estimates national chains closed approximately 6,100 stores in 2008, and fourth-quarter mall vacancy rates could top 7%, the highest since regional mall performance was first measured.

Moreover, anchor stores like Sears or Macy's, critical to a mall’s well-being, are suffering badly.

Malls, originally part of the post-World War II suburban sprawl, have become a sort of flagship for American consumerism. Convenience. Bounty. Air-conditioning. When Americans packed up and left the cities in droves, leaving downtown districts dilapidated and impoverished, all that wealth went straight to the mall.

Now where will we go?

An abandoned mall is an eerie thing indeed. At Deadmalls.com, you can see this for yourself: Unsettling photographs of empty food courts, deserted department stores, and escalators arrested in mid-motion.

Nothing drives home the reality of our economic situation like a darkened storefront, empty parking lot, or vacant restaurant. These are the tangible signs of a landscape in crisis - and the panic they inspire helps keep what money we have left in our wallets.

Luxury malls, anchored perhaps by a glittering Saks or Nordstrom, are particularly at risk for a major slowdown. Terrified consumers are unlikely to drop that extra $400 on cashmere.

Malls, however, have always been more than the sum of their parts: They’re also the place where we spent a thousand teenage nights, the place where we tossed pennies into fountains and played air hockey at arcades. As the 1995 film classic Mall Rats makes clear, malls aren’t just a place to shop - they’re also a place to steal, fight, fall in love, and fornicate in elevators.

Malls have always been about possibilities. Where else can one hop effortlessly from a Piercing Pagoda to a Sunglass Hut?

As usual, no one captures the wonder of malls better than Homer Simpson.

“I want to shake off the dust of this one-horse town. I want to explore the world. I want to watch TV in a different time zone. I want to visit strange, exotic malls... I want to live, Marge! Won't you let me live?”

Mall owners are probably asking all of us the same question.

Top Stocks blogging partner Todd Harrison is founder & CEO of Minyanville.com. This post was written by Minyanville Contributor Cory Bortnicker.

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Comments

 

The malls can only survive if one things happen.  They provide bargains and put quality items on sale.  If that doesn't happen - there gone!  Middle class folks are seeking bargains and the best bang for their buck to survive.  Mall stores are notorious for high priced items and depend on young people and eletis spending behaviors, that's not so good right now!

Malls have been the death knell for many a thriving downtown business district, and represent a superficial lifestyle the hallmark of which is conspicuous consumption.  Let them go dark.  At the very least, I doubt that there are going to be many more new ones built, and I'm fine with that.    

Lets go back to mom and dad stores downtown and close these losing stores down and let main street become main street again.

Many a crowd rushed to the malls when imported items were coming in to this county being manufactured overseas.  How could we not, everything was cheap.  As more manufacturing, research, customer service, programming, and other jobs went overseas for other products to be provided at lower costs, we are all losing our jobs and if lucky, have a job but with lower pay/benefits.  So what's the surprise?  The amount of spending could not remain and smart mall owners should have seen this coming.  

The author writes that malls provide opportunity, and then without a hint of irony quotes Homer Simpson.

The reason these malls are dying is because the American consumer's unstoppable quest for a bargain has slowly over the last 25 years led to their actual jobs being shipped overseas. Now they don't have the money to shop in these malls.  It's no coincidence that the stories attached to al lot of the malls on deadmalls that the author linked to involve one anchor store replacing another anchor store replacing another anchor store until the Wal-Mart down the street closes everyone down because they can't compete.

Americans only have themselves to blame for this. Robber baron capitalists have been allowed to run rampant to the point that their particular brand of capitalism has completely hollowed out its host, causing the whole thing to collapse. And now people shake their fists at Wall Street? NOW? 15 years too late!

its not only malls its hi prices on everything. middle class people are tired of paying .let them close , i dont care . JESUS is comming soon anyway.

The challange is for creative ways to use both "big box" and strip mall space to enhance the quality of life in communities. Boarding the real estate up while supposedly waiting for a "recovery" (and more of the same) won't do it.

How about the obvious?  Convenience.  Malls used to be convenient ways to shop -- much of what you need under one roof.  The convenience was worth paying somewhat more.

Now, with big-box stores such as Walmart being a model of the " all you need under one roof" convenience factor for the basics, and e-tailing taking care of much of the rest with total convenience -- AND both of these things allowing reasonable prices -- the practical appeal of malls is basically gone.

So, unless you expect the hordes of teenagers who inhabit the malls to take up the slack -- the malls are in big trouble.  Considering how often their poor behavior (fighting, loud, roudy, rude, etc) likely discourages would-be practical shoppers from going to the malls, it's rather unlikely, IMO.  (For the many - probably the majority of teenagers who act like  reasonable young adults - that's unfortunate).

The article states vacancies could reach 7%.  within a year, mall owners will look back with fondness to the day when mall rates were only 7%.  Many malls are heading for 30% and more vacancy rates.  Of course, due to high dept loads, this will cause closure of many malls.

I say that is good.  Malls are a cancer in this country.  They represent most what is undesirable and even despicable of American society and it's citizens, mass consumerism for it's own sake of useless products.

I believe the time of the American mall is coming to an end, and none to soon.

we as americans need to get back to the basics and stop trying to take over the world.  I agree the malls are probably about to be a thing of the past and if we dont start taking care of this planet and each other we are in big trouble indeed.  Also, we should stop lying to ourselves and each other.  We  really need to get back too GOD!

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