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Shopping malls in decline
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February 21, 1997: 7:19 p.m. ET
Free-standing stores and a change in image are hurting big shopping centers
From Correspondent Katharine Barrett
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NEW YORK (CNNfn) - America's love affair with the shopping mall seems to have stalled, and many say a shake-out is coming.
Competition has hit from stand-alone mega-stores like Barnes & Noble and Bed Bath & Beyond.
There are fewer department stores to "anchor" malls, and women are now working more and shopping less.
"Another factor is the real explosion of retail space in this country," said Bill Acheson, a REIT analyst at Smith Barney. "It has roughly doubled since 1970, and has grown by a third since the mid-80s. Quite frankly, personal income growth has just not kept pace with it."
In addition, a creeping sameness to malls across the country is also blamed for a mall malaise sweeping older, smaller shopping centers from Denver to Des Plaines.
Some are being sold, others demolished, and still others "de-malled" and turned back into old-fashioned shopping centers. Analysts say 600 of the country's 2,000 malls could close or convert by the turn of the century.
In their heyday, America's malls were hailed as the "new Main Street" - a place to shop and socialize. Today, the average shopper spends 20 percent less time per mall visit than she used to, which translates to spending less money.
Mall sales last year rose less than 3 percent, which is lower than inflation.
"One of the deep, dark secrets of mall developers today is the decrease in traffic during mid-week," Alan Millstein, chairman of the Fashion Network, said. (50K AIFF)
Some developers are fighting back by offering entertainment, food, and even virtual reality. Analysts say the survivors will be mostly super-premium malls, which might even thrive by taking over weaker competitors.
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