Saturday, April 11, 2015

Why J.C. Penney and Sears Anchor Mall Stores are Closing

“It’s not like stores are dead, but you’re going to see a reimagining of retail and malls ,” says Barbara Kahn, a Wharton marketing professor and director of the Jay H. Baker Retailing Center. “Many smaller retailers are going away.”

Kahn says that “A” malls — i.e., destination shopping centers that feature high-end luxury retailers such as Niemen Marcus, Macy’s, Bloomingdales, Nordstrom and increasingly, Apple — are thriving, investing in their locations and providing a differentiated experience for customers. Brands have to be in these malls to be seen, explains Kahn. The malls, which have fashioned themselves as regional attractions with a strong selection of entertainment and retail destinations, can command premium rents in exchange for the foot traffic retailers garner.

The mall shakeout is occurring in the “B” and “C” malls, which are anchored by the likes of Sears or J.C. Penney and surrounded by smaller stores that feature commodity products more easily procured at Amazon and online outlets, says Kahn. Without many of their once-stalwart tenants, many “B” and “C” malls are filling their empty storefronts with drug stores, health clubs, clinics, churches, spas and beauty services.

(via Wharton Magazine)

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