Will the Death of Malls Save the Suburbs?

[Emprise du Lion]

Originally Posted by ue

EDIT: General question for Americans... how popular are department stores like JCPenney, Macy's, and Bloomingdales still? I understand Sears is pretty much dead, but Nordstrom and Neiman Marcus are quite popular.

Honestly a better question might be what department stores aren't struggling right now. All the ones you listed are to a certain degree. Generally speaking though, the lower to mid-range ones are hurting the most. Sears is at death's door, and JC Penny is right behind it. Macy's, which owns Bloomingdales, is on planning closing 100 stores, even as it's pushing openings of Macy's Backstage stores. Nordstrom is pumping the rollout of Nordstrom Rack locations, as sales there are apparently steadier than traditional Nordstrom stores. I believe Saks is also increasing its Saks off 5th range.

Basically they're being cannibalized by each other, the internet, and discount stores like TJ Maxx and Marshalls.

[ue]

Originally Posted by Emprise du Lion

Honestly a better question might be what department stores aren't struggling right now. All the ones you listed are to a certain degree. Generally speaking though, the lower to mid-range ones are hurting the most. Sears is at death's door, and JC Penny is right behind it. Macy's, which owns Bloomingdales, is on planning closing 100 stores, even as it's pushing openings of Macy's Backstage stores. Nordstrom is pumping the rollout of Nordstrom Rack locations, as sales there are apparently steadier than traditional Nordstrom stores. I believe Saks is also increasing its Saks off 5th range.

Basically they're being cannibalized by each other, the internet, and discount stores like TJ Maxx and Marshalls.

Interesting. Nordstrom always seems pretty successful, although I've only ever been to them in their home base in the Pacific Northwest and within Canada. Are traditional downtown department stores, such as in New York, Chicago, and San Francisco, in resurgence?

I'm just trying to compare it to the experience with Canada, where there has similarly been a death to department stores in general. Sears Canada, which was largely considered immune from the perils of the American counterpart, is now dying a slow death and selling off prime retail locations to Nordstrom and Simons. Target, which replaced the HBC (The Bay) Zellers, closed after only 2 years in business, leaving a bunch of shopping malls, including very financially strong ones, with gaping holes in their properties and a lack of viable tenants to take up such a large square footage within the mall. Here, a lot of the biggest and most powerful department store chains bit the dust decades ago (Eatons, Woolworths/Woolco, Kmart Canada).

That being said, there's also a bit of a lesser-spoken upswing in certain department stores. Hudson's Bay (The Bay), which a decade ago was on a slow deathly trajectory, has completely rebranded itself. There aren't really any new stores (in Canada, they're expanding to the Netherlands), but many of the major locations in prime markets (especially Toronto and Vancouver) have been completely remodelled to a more upscale fashion and have seen increasing popularity again. The locations in Edmonton for the most part still need some love, not to mention the smaller markets, so it hasn't fully trickled down.

Additionally, Quebec-based Simons began an endeavour to expand into English Canada a few years back with the store at West Edmonton Mall, and now there are locations built or under construction in Vancouver, Calgary, Toronto, and Ottawa. Simons is "new" and "fresh" for English Canada and is very on top of trends and have thus had great success lately.

Nordstrom has also been met with success where they've expanded in Canada thus far. High end Holt Renfrew has had some downsizing, closing stores in Winnipeg, Ottawa, and Quebec City, but in an effort to streamline things, including complete rebuilds and expansions of their stores in Vancouver and Calgary (and I think Toronto).

[Emprise du Lion]

Originally Posted by ue

Interesting. Nordstrom always seems pretty successful, although I've only ever been to them in their home base in the Pacific Northwest and within Canada. Are traditional downtown department stores, such as in New York, Chicago, and San Francisco, in resurgence?

Nordstrom isn't doing nearly as bad as Macy's, but its profits have dipped. Department stores have been in decline since 1999. The recession only gave many of them yet another bodyblow.

As for downtown department store health, NYC is the exception rather than the rule. Many large American cities don't even have department stores downtown anymore, including cities with healthy growth and economies. NYC keeps adding them, whereas even in Chicago, Macy's is trying to rent out space in its flagship State St location.

Although I will say that there are a bunch of regional department stores that I am unfamiliar with in terms of their health. Many Americans bemoan the loss of their city and region specific department stores a decade ago (just ask a Chicagoan when they think of Macy's vs Marshall Field's), so some of those regional ones *might* be in better shape.

I'm just trying to compare it to the experience with Canada, where there has similarly been a death to department stores in general. Sears Canada, which was largely considered immune from the perils of the American counterpart, is now dying a slow death and selling off prime retail locations to Nordstrom and Simons. Target, which replaced the HBC (The Bay) Zellers, closed after only 2 years in business, leaving a bunch of shopping malls, including very financially strong ones, with gaping holes in their properties and a lack of viable tenants to take up such a large square footage within the mall. Here, a lot of the biggest and most powerful department store chains bit the dust decades ago (Eatons, Woolworths/Woolco, Kmart Canada).

That being said, there's also a bit of a lesser-spoken upswing in certain department stores. Hudson's Bay (The Bay), which a decade ago was on a slow deathly trajectory, has completely rebranded itself. There aren't really any new stores (in Canada, they're expanding to the Netherlands), but many of the major locations in prime markets (especially Toronto and Vancouver) have been completely remodelled to a more upscale fashion and have seen increasing popularity again. The locations in Edmonton for the most part still need some love, not to mention the smaller markets, so it hasn't fully trickled down.

Additionally, Quebec-based Simons began an endeavour to expand into English Canada a few years back with the store at West Edmonton Mall, and now there are locations built or under construction in Vancouver, Calgary, Toronto, and Ottawa. Simons is "new" and "fresh" for English Canada and is very on top of trends and have thus had great success lately.

Nordstrom has also been met with success where they've expanded in Canada thus far. High end Holt Renfrew has had some downsizing, closing stores in Winnipeg, Ottawa, and Quebec City, but in an effort to streamline things, including complete rebuilds and expansions of their stores in Vancouver and Calgary (and I think Toronto).

What's interesting is that Macy's feels like it used to be better in the past. Many times you'll go into a Macy's, including its flagship stores, and they just feel rundown.

I'm also shocked that Target failed in Canada. They're everywhere in the US, although they're typically not located in malls. They're usually stand alone stores located by themselves, or in a massive strip mall/power center type of atmosphere.

A condensed city version did end up moving into the location of an old department store (Carson's) in downtown Chicago though. Quite a few other city Targets are also due to open in Chicago in the next year or so.

Also these articles should give you some info regarding department stores here in the US:
http://www.costar.com/News/Article/A...-in-NYC/179992
http://www.denverpost.com/2016/08/11...g-with-appeal/
http://www.businessinsider.com/tradi...uggling-2016-5

[kilbride102]

^ I believe target's biggest problem in canada was a huge management failure. I remember reading an article last year that really tore apart target's leadership. Canadians were exicted for target and expectations were high. Even simple things like store shelf sizes and items being measured in metric system at the store level while distribution centers used inches caused massive problems. Store shelves were empty while product wasted away in DCs. Bad first impression that they could not recover from.

[ue]

Yeah, Target Canada failed from mismanagement and a poor distribution channel. But it's hard to not see issues with distributing stock when you all of a sudden acquire hundreds of new stores. When Walmart entered Canada, they slowly converted old Woolco stores and slowly expanded their distribution network. Target had a lot of hype and failed to live up to expectations and since they took Zellers with them, there has been a void in the low-end retail market here since.

Yeah, the department stores in New York seem almost institutional in stature. I don't know anywhere else in North America quite like that, even well regarded flagship Hudson's Bay and Simons stores aren't quite that revered. I assumed downtown department stores would do well in Chicago as well; it seems to have a fairly healthy retail core on Michigan Ave north of the river.

[Citylover94]

Boston's Downtown/Back Bay has several department stores that all seem to be doing pretty well. I don't know if this is still the case but several years back the Downtown Crossing Macy's had the busiest men's department in the country by sales volume. The other department stores are all in the Back Bay and include Lord and Taylor, Saks Fifth Avenue, Barneys New York, and Neiman Marcus. Cambridge also has a Macy's and a Sear's which seem to be doing well. They are located in the CambridgeSide Galleria which is an urban mall.

[Emprise du Lion]

Originally Posted by ue

I assumed downtown department stores would do well in Chicago as well; it seems to have a fairly healthy retail core on Michigan Ave north of the river.

Between Michigan Ave and State St there's Macy's, Nordstrom, Neiman, Saks, Bloomingdales, and Barneys. There's also a tiny Carson's over by the Sears Tower.

The trouble is that State St flagship Macy's (rather than the Water Tower Macy's) is the most iconic department store in the city because it used to be Marshall Field's, a Chicago specific department store. It's the view of many in Chicago that Macy's bought Marshall Field's, took over their flagship store, and then promptly ran it straight into the ground. They're not necessarily wrong, as the store was nicer in the past.

Overall though, plenty of department stores to pick from in downtown Chicago. I just don't know what the sales are for those specific stores today versus in years past. I do know that Michigan Ave lost Lord & Taylor a decade or so ago though.

[Crawford]

Originally Posted by Emprise du Lion

The trouble is that State St flagship Macy's (rather than the Water Tower Macy's) is the most iconic department store in the city because it used to be Marshall Field's, a Chicago specific department store. It's the view of many in Chicago that Macy's bought Marshall Field's, took over their flagship store, and then promptly ran it straight into the ground. They're not necessarily wrong, as the store was nicer in the past.

Marshall Field's State Street store was unprofitable as is Macys State Street store. The issue isn't the name on the building, but the location. Retail shifted to N. Michigan Ave. and unfortunately you can't move a building 10 blocks north.

I think people are painting far too dire a picture for both malls and department stores. Top tier malls have never been more profitable. Department stores are generally quite profitable. Really only KMart/Sears is doomed. The other major U.S. department stores are doing (relatively) fine.

[Jonesy55]

I think online shopping is a general trend that will affect physical stores though wherever they are, city centres or suburban malls, if $x billion gets spent at online retailers with no physical presence then that is $x billion taken out of consumer spending in physical stores, no real way around that.

Here in the UK e-commerce is a big thing and it seems to be that less attractive local retail cores are suffering from that but if you have a retail core which is a nice place to spend time in generally with good architecture, a nice pedestrian environment, frequent events happening etc then the slack created by fewer stores for practical day to day purchases is being taken up by more and more service type business like cafes and coffee shops, restaurants, beauty salons etc where what they offer can't be so easily bought remotely.

[ardecila]

^ State St is still a hub for mid-market and bargain priced retail. It has all the same stores you would expect to find in a suburban shopping mall in a middle class suburb, and it functions as the primary shopping district for the majority of people who live in the city. What it is not, is a tourist destination or a luxury retail hub.

[NorthernDancer]

Malls aren't dying in Canada at all. Maybe a few of the smaller, "down and out" 1950s, dated malls. But the larger and more popular malls keep expanding. Square One in Mississauga for example is in the midst of adding 500,000 additional square feet of retail which will bring it from 1.6 million to 2.1 million square feet of retail square footage, making it the second largest mall in the country.

Other Toronto-area malls are also undergoing (or have recently undergone) large expansions. Sherway Gardens and Yorkdale for instance. Sherway Gardens recently added Saks Fifth Avenue, Nordstrom, and an entire new wing of smaller stores. Yorkdale is adding Nordstrom, Simons, and a bunch of smaller stores. Yorkdale will have around 1.8 - 1.9 million square feet of leaseble retail space when completed I believe. Making it one of the largest malls in the country.

The malls that have struggled are one like Honeydale in Etobicoke, which is directly across the street from more modern, good-sized mall. And Galleria Mall northwest of downtown Toronto, which is going to be torn down for a huge, multi-towered residential and retail development.

Maybe our longer winters are the reason indoor malls remain immensely popular in Canada?

[ue]

Originally Posted by NorthernDancer

Malls aren't dying in Canada at all. Maybe a few of the smaller, "down and out" 1950s, dated malls. But the larger and more popular malls keep expanding. Square One in Mississauga for example is in the midst of adding 500,000 additional square feet of retail which will bring it from 1.6 million to 2.1 million square feet of retail square footage, making it the second largest mall in the country.

Other Toronto-area malls are also undergoing (or have recently undergone) large expansions. Sherway Gardens and Yorkdale for instance. Sherway Gardens recently added Saks Fifth Avenue, Nordstrom, and an entire new wing of smaller stores. Yorkdale is adding Nordstrom, Simons, and a bunch of smaller stores. Yorkdale will have around 1.8 - 1.9 million square feet of leaseble retail space when completed I believe. Making it one of the largest malls in the country.

The malls that have struggled are one like Honeydale in Etobicoke, which is directly across the street from more modern, good-sized mall. And Galleria Mall northwest of downtown Toronto, which is going to be torn down for a huge, multi-towered residential and retail development.

Maybe our longer winters are the reason indoor malls remain immensely popular in Canada?

Canada =/= Toronto.

But yes, this is an overall trend in both Canada and what I've seen in the US. Malls in desirable areas that serve a more regional focus (e.g. Yorkdale for North York, Sherway for Etobicoke, to use a Toronto example) but the neighbourhood mall is dying in favour of the neighbourhood power centre. Aside from 3 'Mills' malls and a few semi-enclosed outlet malls down east, there really aren't any new malls being built in Canada. It's the already successful ones that are expanding or updating.

In Edmonton, you've traditionally seen this with WEM, Southgate, and Kingsway, though now you've got Londonderry trying to compete with Kingsway, and City Centre doing some renos to keep competitive with the new developments surrounding the downtown revitalization. On the other hand, you've got Capilano, Westmount, and Meadowlark that have been subsumed by regional centres and power centres and have thus turned into an outward facing neighbourhood power centre. There are rumours of this happening to Bonnie Doon too, now that Target is gone and now Sears is leaving. Mill Woods and Sherwood Park are the only malls offhand that still seem to have a modicum of success in an almost neighbourhood scale, but even they have a decent radius to take from and could be more than they are, but there isn't demand. The demand is very concentrated in the 3 main malls, with nods to the 2 others trying to compete. We also had the old Heritage Mall completely bulldozed 15 years ago to make way for a TOD.

[NorthernDancer]

Originally Posted by ue

Canada =/= Toronto.

Malls across Canada are thriving. Hell, the Vancouver area just opened a large indoor mall (Tsawassen Mills) this year. So no, there's no difference between how malls are performing in Toronto and the rest of Canada.

[ue]

Originally Posted by NorthernDancer

Malls across Canada are thriving. Hell, the Vancouver area just opened a large indoor mall (Tsawassen Mills) this year. So no, there's no difference between how malls are performing in Toronto and the rest of Canada.

You clearly didn't read the rest of my post.

[Minato Ku]

Who care if Canadian malls are thriving or not ? I think it's not the point of this thread.
I think that here we should rather talk about redevelopment plan for dead malls.
Could an area where used to stand a mall become a nice urban neighborhood ?