Posted on 06/03/2019 7:23:12 AM PDT by Red Badger
Mall-based retailers reported dismal earnings last week, reminding investors of the sector’s fundamental problems
Retailers’ earnings season has gone from bad to worse. The bleeding intensified last week, with shares of Abercrombie & Fitch plummeting 26% on Wednesday, the biggest percentage decline since the company went public. PVH Corp., owner of brands including Van Heusen, Tommy Hilfilger, and Calvin Klein, dropped 10% that day, too. On Thursday, women’s wear chain J.Jill was down a jaw-dropping 53% and on Friday, Gap Inc. slid 9%.
It is hard to miss what all of these retailers have in common: They are mall-based.
While retailers posted generally strong numbers in 2018, raising hopes of a retail renaissance, this year has seen a reversion to the pre-2018 trend: department stores and mall-based retailers giving up share to discount stores and e-commerce. The perceived renaissance now seems to have been largely a function of lean inventories, not an actual increase in demand. Now inventory is high again, and retailers are resorting to promotions.
Gap, for example, warned Friday that it may have to rely on promotional activity in coming months to move unsold merchandise off shelves. That will weigh on gross margins. The company, which posted its weakest quarterly sales in three years, has suffered not merely at its namesake brand, where comparable-store sales were down 10% for the quarter, but also at Old Navy, typically its best performer. Comparable-store sales there fell 1%. By comparison, in the same period last year they climbed 3%.
(Excerpt) Read more at wsj.com ...
Mall troubles are likely related to the falling manufacturing centre. When the only jobs available are low paying service jobs, that’s income that is not available in terms of discretionary spending.
Bingo!................
Are you talking about Eastland Mall? They had an ice skating rink on the bottom floor. I learned how to ice skate there and spent many weekends there- we were from SC so my parents would drive up for the weekend because it was a nice place to go and shop. My church would even bring our youth group up twice a year too. Last year I Googled it because my family was going to be coming through Charlotte and I wanted to take my daughter there to show her a part of my youth. When I saw pictures of what that mall had become I cried.
Another nail in the mall coffin is public bus stops/terminals.
A big HUGE nail is Amazon.
The old order changeth yielding place to new And God fulfills himself in many ways Lest one good custom should corrupt the world......Alfred, Lord Tennyson
No, I am not posting about the failing Democrat party....... I am thinking of Malls trying to compete with the newer very large strip centers.
Mall walkers and young mothers could be shoppers again but thought would have to be put into incentives:
A study was done on mall shoppers and crime years ago - it had some interesting conclusions.
Early malls had upscale stores with safe monitored bathrooms and in-store lunch restaurants etc.
In the name of efficiency, Food Courts pushed out store lunch places and Mall Management put bathrooms down long hallways (not to compete with higher priced retail space) - places that became common crime sites. This was the reason for concern with ‘out-of-control’ teens ... The study showed over time shoppers started limiting mall shopping to less than four hours - or the time available between natural trips to the bathroom.
Malls were able to fame the problem in terms of ‘racism’ so they didn’t realize the real problem was easy to solve. Put in large well lit monitored bathrooms for shoppers so shoppers and ‘teens’ don’t meet down dark un-monitored hallways...
Correct!
There was a time building a mall, with tax advantages and other things was a guaranteed profit maker... So, way, way, way too many malls got built for the real demand...
That’s no longer the case, so mall deaths were always a given... then add to the mix that brick and mortar retailing in general is in decline and you will have the continuation fo decades of mall closings.
There will always be malls, but not nearly the number there were in the 90s
Also, the Apple and Microsoft stores are jammed. But that's about it. Most of the stores have more employees than customers.
Millenials refer to Sears, Penny’s, Macy’s and Dillard’s as ‘fogey stores’...............
Its not just those...
Tax laws and other things made building a mall, no matter how STUPID it seemed a guaranteed money maker.... So needless to say, WAY TOO MANY GOT BUILT.....
Laws and other things change... so that’s no longer the case.... So, even without Amazon, or other factors, the number of malls was ALWAYS going to fall....
You basically had forces that weren’t “market” driving the building of malls... indirect subsidies made building a mall a guaranteed win for the investors... now that things have changed, they have to prove their existence, and so the number of malls was ALWAYS going to decline, no matter what.
Of course online retail hasn’t helped malls either, but even if Amazon didn’t exist, you would still see the decline in malls that has been going on since the late 90s
IIRC, the “Dawn of the Dead” mall is still open. Ironic!
repurpose the malls into deportation staging centers.
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Good idea. They hold lots of people. Our local dead mall was a staging center for Katrina refugees way back when.
Every town has the same two malls: the one white people go to and the one white people used to go to.~~Chris Rock
Our local high schools have open lunch where they leave school and drive to the mall food courts. The rival schools attack each other in the parking lots. I don’t go to malls ever anymore.
I moved to Charlotte 4 years ago. Are there any good parts of this town? By the way, if the former mall you are thinking of that was razed was located on Central off Sharon Amity Rd, it’s just a big empty place now.
New Orleans did something like that as well - the "empty half" of the mall was used for "city and state offices" (the city owned the property by that time). DMV, city tax offices, voter registration - branch offices of pretty much every social spending program available - all in one neat place. Mercifully, Hurricane Katrina took it out.
I can't tell you how many hundreds of hours I worked as an unpaid MSFT support/user.
Nor how many times an Indian MSFT person told us to reinstall windows on one of the computers.
Nor how many times I had to reinstall drivers after reinstalling windows.
Nor how many times MSFT changed the user interface and the team had to spend time relearning what worked fine.
Nor how many buggy versions of major products were released to the public by MSFT, including system software.
In 10 years, I've gone to the Apple Store twice for support. Once for a bad memory chip.
That covered 15 devices across their product line.
I'm glad you are happy with MSFT. Keep buying. The S&P 500 needs help!
We would make it a point to do our Christmas shopping there to support the smaller businesses in the mall.
But, high rent has forced most of the stores to shut down. Macys and Barnes and Noble are still there, but REI shut down.
Now, in place of the stores, fitness places have opened up: Yoga, Boxing, TaeKwon Do, dance, Pilates....the vacant REI store will be a Planet Fitness.
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