Reis in the News
By Daphne Howland
Source: Retail Dive – Can Retailers Break Up With the Malls?
A lot of stores are leaving the mall these days.
Singer-songwriter Paul Simon made it sound easy. “Just slip out the back, Jack. Make a new plan, Stan,” goes his 1975 ditty. “Just drop off the key, Lee, and get yourself free.”
Supplements retailer GNC earlier this month did make it sound fairly easy to leave. The company July 22 said it would likely halve its mall presence in the process of closing down as many as 900 locations, most of them in traditional malls. That would add to an industry store closure tally that already this year has surpassed all of 2018. To date U.S. retailers have announced 7,426 store closures and 3,039 openings, compared to 5,864 closures and 3,258 openings last year, according to Coresight’s most recent accounting, emailed to Retail Dive.
That’s terrible news for malls, where traffic declines are already undermining stores, potentially accelerating the current era’s vicious cycle for malls and their retail tenants.
GNC CEO Ken Martindale sought to assure analysts that the company will be free to just drop off the key. “[T]he negative trends in traffic that we’ve seen in mall stores over the past several years has accelerated during the past few quarters, putting additional pressure on comps,” he said on a conference call Monday, according to a Seeking Alpha transcript. “As part of our work to optimize our store footprint, we’re increasing our focus on mall locations. And as you know, we have a great deal of flexibility to take further action here due to the short lease terms we have across our store portfolio.”