Death Knell of the Mall
People who are hoping for an economic recovery that restores the way we were living before can go right on hoping. America is going to be a very different place after The Republican Depression of 2008.
The day of the big SUV, the McMansion, and mallrats is all but over. As a result, you can look forward to a lot of those suburban jungles disappearing over the next few months and years. General Growth, the mother of a lot of the malls, has taken a powder, but this is only the beginning.
I do not know what kind of economy is coming to replace the borrowed one we just lost. About all I do know is that it’ll look a lot different. If there is a revival of the mom-and-pop neighborhood store, that is a result I could live with. Some think that’s what is coming. Me, I’m not sure of even that yet.
America’s second largest owner of shopping centres, General Growth, collapsed into bankruptcy protection today with debts of $27bn ($18bn) as “mall fatigue” among cash-strapped consumers took its toll.
General Growth’s portfolio of more than 200 shopping centres includes landmarks such as New York’s South Street Seaport, Boston’s Faneuil Hall and the biggest open-air mall in the world, the Ala Moana Centre in Honolulu, Hawaii.
Its Chapter 11 filing is the biggest bankruptcy for a US property company on record.
The Chicago-based company blamed “broken credit markets” for difficulties in refinancing its loans.
“While we have worked tirelessly in the past several months to address our maturing debts, the collapse of the credit markets has made it impossible for us to refinance maturing debt outside Chapter 11,” said chief executive Adam Metz.
Throughout the US, shopping centres have been struggling as the recession bites into consumer spending. Many leading locations have cut back on opening hours. Vacant shops are commonplace and retailers are offering deeply discounted prices.
General Growth’s origins go back to 1954 when two brothers, Martin and Matthew Bucksbaum, expanded their family grocery business by building one of the midwest’s earliest shopping arcades, the Town and Country Centre in Cedar Rapids, Iowa.
It has accumulated malls across America including Water Tower Place in Chicago and the Grand Canal Shoppes at Las Vegas’s Venetian casino. With its partners, General Growth also owns properties in Brazil and Turkey.
The company has been laden with debt since it bought a rival developer, Rouse, for $14.2bn five years ago. As financial problems mounted, General Growth had a management shake-up in October in which Metz replaced Matthew Bucksbaum’s son, John, to become the first non-family chief executive since the company was founded.
I’ve never been a fan of mall shopping anyway. I’m one of those weirdos who would rather pay a little more to a smaller store just to try to keep it open. It looks like maybe more of us will be perusing the little places very soon.
Tags: economy, failure, general growth, recession, republicans
April 17th, 2009 at 5:16 pm
Thus the consequences of the Bush Depression forever lives on.
April 17th, 2009 at 7:59 pm
The only thing I like about our mall is Aunti Annies pretzels. The rest kind of sucks. I honestly don’t know how this will play out.
April 17th, 2009 at 8:33 pm
Malls are for “gatherers” and time wasters. When I shop, I’m a “hunter”. I know what I want and I go get it. I want to park close, get in and get out. The only time I “gather” at a mall is when I need to give a gift and have no clue what to get. It happens maybe once a year.
April 17th, 2009 at 10:26 pm
The commenter @ #3 makes good sense. I think that’s what I am. Not to mention I have NO patience wandering around looking for ‘something.’
April 18th, 2009 at 12:48 am
I love the irony in the founder’s name — Bucksbaum.
April 19th, 2009 at 2:30 am
I have two main gripes about malls.
First, they’re 98.5 percent devoted to women and children. Clothes, shoes, jewelry, clothes, shoes, jewelry, and more clothes, shoes, jewelry. Occasionaly, items in those categories are even for men.
Second, rarely do you find anything there that’s not available at a bunch of other places, usually for a lower price. The reason is because mall stores have higher overhead than most other retailers.
I must admit that when in the mood I can enjoy roaming a mall. I don’t resent them as a format for retailers.
As to malls being on the way out, time will tell, but I’m not so sure.
April 19th, 2009 at 2:49 pm
SW, they have to be on the way out. There is no middle class in this country anymore, fuel prices have people saving every dime they can somewhere else, the credit market has dried up… the basis of survival for the mall has dried up in the last few years.
April 20th, 2009 at 6:43 pm
JR, I take it the malls are harder hit in your area than in mine. We spent Saturday afternoon at a main one here a couple weeks back and it was busy. People were buying, too, although I have no way to no how much. But many on their way out were toting bags, and checkout people were staying busy in many of the places.
That said, several stores in the place were empty, which isn’t unusual this time of year. In some past years there were so many vacancies in the first quarter that the place was starting to look like a ghost town. But most years, by July or August it’s back to full or nearly so.
April 20th, 2009 at 10:37 pm
SW, the reports are coming in from all over; even DC’s malls are beginning to founder. The new way is coming, whatever that happens to be.