Here’s what happens to malls after department stores close


Just days into the new year, major retailers have already announced plans to close hundreds of stores.

On January 4, Macy’s released a list of 68 stores that it’s closing as part of a previously announced plan to shut down 100 struggling locations over the next few years.

And on the same day, Sears Holdings said it was closing 150 unprofitable Sears and Kmart stores.

What happens when major retailers abandon malls

Read more: Confirmed: These Macy’s locations are closing

In addition to thousands of lost jobs, the closures will result in hundreds of abandoned storefronts nationwide. But what happens after these retailers skip town? Here are three likely scenarios:

1. New tenants move in

To preserve the overall health of shopping centers and malls, the ideal situation is to have a new tenant ready to take over the vacant space.

That’s the case in Bowling Green, Kentucky, where Belk will replace a closing Macy’s location.

Since industry experts believe that there are simply too many department stores, it’s not likely that new tenants will be lined up to save every mall with a vacancy.

However, there may be more retailers willing to replace outgoing stores in strip malls.

Here’s why: Some stores that are traditionally found in shopping centers, like T.J. Maxx and Marshalls, have continued to thrive and reportedly plan to open thousands of new stores.


Fitch Ratings predicts that the following retailers will also have a strong 2017:

For the thousands of employees who will lose their jobs as a result of the Macy’s and Sears closures, it may be worth applying at one of the retail chains on Fitch Ratings’ list.

Here are the 50 best places to work in 2017, which includes some retailers.

2. Malls die a slow death

The loss of an anchor tenant can negatively impact other stores, especially at malls that have been struggling for years.

Green Street Advisors predicts that several hundred malls may close over the next decade. According to a 2016 report in Bloomberg, properties reliant on Macy’s, Sears and JCPenney are the most vulnerable.

The mall that I used to go to when I was a child was among those that suffered a slow, painful death.

When it opened in 1979, the Laurel Mall was the place to be, but it had only a handful of stores remaining before it was demolished in 2012.

This video uploaded to YouTube shows the mall’s depressing final days:

3. Total redevelopment

Mixed-use developments have replaced some troubled shopping centers and malls. The new spaces usually include a combination of retail, housing and offices in one area.

That’s the game plan for one site near Kansas City that used to be home to Kmart.


Meanwhile, other old shopping centers have been redeveloped into medical facilities, colleges, churches and even parks. So there really can be new life for dying malls after all!

Read more: These 5 restaurant chains face a difficult 2017

Clark’s take on Macy’s and Sears closings

Reacting to the latest news, Clark said the department store model is broken, and consumers are increasingly turning to online and discount merchants for better deals.

However, he said this is not a crisis, “unless you’re a Macy’s stockholder.”

“Other employers are looking to hire and are begging for workers in so many different fields, not just retail,” Clark said about the people who will be looking for new work.

Bottom line: Retailers that provide a good value to consumers will continue to do just fine!

Read more: These major retailers are closing stores in 2017

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