Your Neighborhood Mall May Be Closing

The 2020 edition of Black Friday did not offer the usual scenes of bustling stores and shoppers lined up outside discount chains and electronics retailers. Instead, most people bought online, if they bought at all.

American malls are dying out. Retail complexes all over the US are being clobbered by store closures sweeping the country. Retailers announced more than 8,600 closings in 2019 and according to a report done by Credit Suisse, between 20% to 25% of malls will close by 2022.

One of the biggest reasons that so many stores are failing is that people aren’t shopping the same way they used to. Rather than spending whole afternoons walking around the mall, many people prefer to shop in their pajamas at home. Shopping isn’t a pastime like it used to be — it’s more transactional.

The Covid-19 pandemic is putting another nail in the mall coffin. “It’s not Black Friday. It’s not people waiting in line the way we’re used to,” said Marshal Cohen, chief retail analyst at The NPD Group. Cohen said in hours of driving around retail centers, he saw lines only outside Macy’s flagship New York City store and a suburban Best Buy. “All the other stores, you would have thought it was like any other Friday in November,” he said.

I drove around my nearby Westfield Topanga Mall in Canoga Park California. The traffic cones were in place to guide the cars but there were no cars to guide. Visitors had no problem driving into the parking structure.

Mall giant Simon Property Group’s pursuit of Brooks Brothers, Lucky Brand and J.C. Penney illustrates how deeply the pandemic has reshaped the retail sector. Simon Property Group operates 175 U.S. malls and outlets, including the King of Prussia mall outside Philadelphia.

The Famed Mall of America in a suburb of the Twin Cities in Minnesota has three anchor stores and one is vacant. It’s behind on its mortgage payments, but has entered into a forbearance agreement with the special servicer on its loan that could help the megamall avoid foreclosure, even as it wrestles with lower customer traffic during the Covid-19 pandemic.

It all seems like a fool’s errand. Growing numbers of Americans have decided there are better ways to spend an afternoon than walking through a mall. The virus only reinforces that decision.