Department Store Closures...

[Midpack]

Sad but not a surprise - and the pandemic really accelerated a trend that was already well under way.

Downtown > Suburban malls > Amazon. Evidently Amazon has converted some empty malls into warehouse space, and Amazon is booming - can’t hire people fast enough to keep up. I know the Amazon, FedEx, UPS trucks are constantly in my neighborhood, several times a day!

It is interesting that upscale stores have fared better. I’ve seen that in countless service industries, the top tier usually does much better than the rest. Nordstrom has always offered superior service versus the others, and it’s helping them maintain customers.

Nearly 40% of America’s department stores have closed in the past 5 years.

50% of the remaining 1600 stores are expected to close by 2025.

https://www.washingtonpost.com/busi...partment-stores-are-expected-shutter-by-2025/

 

[street]

Not surprising numbers because of the ordering from home, and hassle free buying. I do know small towns with small stores have been hit hard. It really has destroyed main street, down town America.

 

[marko]

Not surprising, but over the past 10-15 years--pre Covid--there we so many times that DW and I were in a store like Macy's, trying to find someone to check us out/help us with no one in sight. How many times over the past 10 years have you wandered around a Macy's/Dillards/Lord Taylor looking for someone to take your money?

Of course they were short staffed, so perhaps the model was failing even before Covid, Amazon, et al.

Just last week we were at a store, waiting in line for a long time in what was an obviously inefficient check out configuration and said to each other "and they wonder why everyone shops on line".

 

[JoeWras]

It is more than buying goods. There's the whole social aspect of the mall. Malls were big for teens. This habit would continue as they grew up, especially for girls.

Not anymore. Kids do a lot of socialization with structured time (sports teams, etc.) than before. They can meet online. Boys play video games and meet on twitch. Girls meet in a variety of ways online. Young adults of all genders spend time at the gym instead of the mall. So it really isn't that ironic that many of these spaces are being converted to gyms.

Add in the fact you can order anything online, and the business model craters.

 

[Ronstar]

We just went to a mall for the first time in 14 months. An upscale outdoor mall. A few stores closing or closed - including a Tesla store. We had to go to the mall to get DW some shoes - she can't pick out shoes online - she has to see them in person and try them on.

I prefer to buy things online, and it seems like most people are the same. Hard to beat buying from home and your package comes delivered to your door a couple days later. Most things I buy are specialty items not available in stores, so I have to buy online.

Department stores will continue to close, but those that provide customer service will be able to survive.

 

[Jerry1]

We had to go to the mall to get DW some shoes - she can't pick out shoes online - she has to see them in person and try them on.

This seems so logical. However, it is much different than my experience. Stores are not only under staffed, they are inadequately stocked. I doubt I could even find my size if I went shoe shopping. I go to Zappos or Shoes.com and they have every style and size I could imagine. If my normal size doesn’t fit for some reason or, I just don’t like the shoe, I can send it back for free. For me, that’s a quick trip to the UPS store which takes about ten minutes round trip. Usually, the shoes don’t differ from my size and I’m all set.

I don’t know how a store can compete with that. About the only thing a store has is immediacy if they have your style and size. I’ve not needed a pair of shoes that quickly in a long time. I hope your DW sees the light some day. She could literally have several pairs shipped to her to try on in the comfort of your home and have such a better selection. She just has to see and try them on before she “keeps” them. Totally possible via online retail.

 

[JoeWras]

I have a wide foot. EEEE.

I've been ordering shoes on-line before there was on-line, specifically since 1990.

I've had to ship a few duds back, but generally I do OK. I've learned a bit about the "last", or form that they use to make the show. My width partially comes from a thick foot. Anyway, I know which lasts work, and the on-line shop I use usually lists it. If not, I ask them questions.

I think if I went to a department store and asked the shoe jockey what last was this built on, they'd look at me like I was an alien speaking a different language.

 

[disneysteve]

Certainly not a new concept and has been going on long before COVID hit. COVID just accelerated it. The whole mall concept is simply outdated and the public has moved on to better, cheaper, more convenient options with endless variety and stock.


The physical stores that continue to do well are the high end and the low end. All the stuff in the middle has pretty much been captured by Target and Walmart and online shopping. And even those two are largely moving to online ordering and either curbside pickup or delivery.

 

[Midpack]

This seems so logical. However, it is much different than my experience. Stores are not only under staffed, they are inadequately stocked. I doubt I could even find my size if I went shoe shopping. I go to Zappos or Shoes.com and they have every style and size I could imagine. If my normal size doesn’t fit for some reason or, I just don’t like the shoe, I can send it back for free. For me, that’s a quick trip to the UPS store which takes about ten minutes round trip. Usually, the shoes don’t differ from my size and I’m all set.

I don’t know how a store can compete with that. About the only thing a store has is immediacy if they have your style and size. I’ve not needed a pair of shoes that quickly in a long time. I hope your DW sees the light some day. She could literally have several pairs shipped to her to try on in the comfort of your home and have such a better selection. She just has to see and try them on before she “keeps” them. Totally possible via online retail.

DW and I buy everything we can online, but we still don’t buy shoes online unless we are replacing the exact same shoe. We had a friend who would order as many as 10 pairs of shoes and then she’d return what she didn’t like/fit - she routinely returned 8-9 pairs - and thought nothing of it. We always saw that as dishonest, as all buyers are paying for all the excess shipping, it’s not free. But I am sure we’ll be buying more shoes online eventually...

 

[easysurfer]

Can't remember the last time I went to a mall to shop.

Only thing close is pre-pandemic, going inside a Kohl's to return something I bought from Amazon .

 

[JoeWras]

The physical stores that continue to do well are the high end and the low end. All the stuff in the middle has pretty much been captured by Target and Walmart and online shopping. And even those two are largely moving to online ordering and either curbside pickup or delivery.

The big box home improvement stores are uniquely positioned to continue to thrive for many different reasons.

Even so, I find myself buying small tools, parts and devices online more and more.

And guess what? You can buy annuals on-line and have them shipped. There is pressure to shop for things on-line that were considered impossible.

I recently ordered annual begonias as part of a test program for Big Box. The plants were of extreme high quality and survived shipping amazingly well. Look at how they were wrapped.

 

[Mr._Graybeard]

A department store in the Milwaukee area may have found the formula. Von Maur is the anchor of a retail development that includes luxury apartments. "The Corners" also includes restaurants, a comedy club and an upscale grocery store. They're doing well enough that they have announced plans to build a second store in Madison.

 

[Music Lover]

Certainly not a new concept and has been going on long before COVID hit. COVID just accelerated it. The whole mall concept is simply outdated and the public has moved on to better, cheaper, more convenient options with endless variety and stock.

Malls obviously can't compete with online shopping. I still like touching actual products and looking at them before buying. Online is more convenient and often a little cheaper, but that's about it. We rarely buy from Amazon, the only time we do is when there is no other choice. We will buy online from local stores, though.

I remember decades ago when people used to complain when a Walmart put a bunch of local stores out of business. Now Amazon is putting the big chains out of business.

I don't know why people think it's such a good idea to keep outsourcing local jobs.

 

[GalaxyBoy]

I went to the mall for the first time in a year just the other day, looking for some new clothes for summer (my account balances are at all-time highs and WTH, blow that dough!). After wandering around Belk for a half hour and not seeing the first salesperson I left. This is not a pandemic-related issue; I've had the same problem for years. A year or two ago I stood in the middle of a mall store and yelled "does anybody work here?!" Hearing no response, I left that time, too.

Before Penney's closed I stopped going there because the merchandise was always in such a mess you couldn't find anything.

In high school and college I worked at a small dry goods store (mostly clothing and shoes) that hadn't changed since it opened in the 1920s - even the cash register had to be cranked by hand. Believe me, if I took longer that 10 seconds to approach a customer or let the stacks get to be less than perfectly arranged I would have heard about it from the boss!

 

[Jerry1]

We always saw that as dishonest, as all buyers are paying for all the excess shipping, it’s not free. But I am sure we’ll be buying more shoes online eventually...

I see nothing dishonest about it at all. I don’t do that just because I know what I want but if I wanted to try something new, I’d order a few of them. Sure, that cost is passed to others, but I see no premium on the cost side showing up for this. And, it must still be cheaper than a brick and mortar store.

We got a pair of shoes for my grandson the other day. They had obviously been tried on (laces were tied and stuffing removed from one shoe), but they were not in any way scuffed or whatever. Of course that could happen at a physical store too. I just don’t see the down side. And, like JoeW, I have a wide foot. They’re just not stocked in the physical stores.

 

[Dean56]

Oh yeah, I remember growing up and Sears was my family's go to store for everything. Clothes, shoes, toys, appliances, lawn & garden equipment, tools. My mom would buy me the "Toughskins" jeans because I was always kneeling down working on bicycles and the area around the knees would develop holes in them. I was a dedicated "Craftsman" tool guy. That's all I bought....they are still available at Lowes & of course Amazon. It's sad that all the department stores are dwindling and going out of business. These days shopping is aided by technology. The Covid pandemic also accelerated the shop at home mentality that we see today. You gotta ask yourself....will there be many brick & mortar stores left in 20 years??

 

[Midpack]

I don't know why people think it's such a good idea to keep outsourcing local jobs.

Most people buy based on price/value and convenience period, they aren’t “thinking” about moral choices at all. Most people decry outsourcing their jobs, but don’t act on behalf of others jobs.

I went to the mall for the first time in a year just the other day, looking for some new clothes for summer (my account balances are at all-time highs and WTH, blow that dough!). After wandering around Belk for a half hour and not seeing the first salesperson I left. This is not a pandemic-related issue; I've had the same problem for years. A year or two ago I stood in the middle of a mall store and yelled "does anybody work here?!" Hearing no response, I left that time, too.

Before Penney's closed I stopped going there because the merchandise was always in such a mess you couldn't find anything.

You have cause and effect backward. The lack of help in retail stores these days is because online has trashed brick-n-mortar margins, not the other way around. We (collective) didn’t want to pay for store clerks, so now we don’t have them. But it is hastening their inevitable decline...

 

[disneysteve]

We had a friend who would order as many as 10 pairs of shoes and then she’d return what she didn’t like/fit - she routinely returned 8-9 pairs - and thought nothing of it. We always saw that as dishonest

I see nothing dishonest about that at all. In fact, it's exactly Zappos business model. It's what has made them so successful - letting people shop at home. Not sure if you need a 7 or 7.5 or 6.5? Order all 3 and return the 2 that don't fit. Is it actually "free"? Of course not, but it's factored into their pricing. They know exactly how their customers are shopping. If they wanted to stop it from happening, they'd need to change their return policy.

 

[jazz4cash]

When I was working I spent significant time driving through small towns an hour or so from major cities and it was sad to see so commerce in many towns disrupted by the big malls. Many small town CBDs had Sears as the anchor right in the middle of town (across from the courthouse, city hall, etc). The malls built on the outskirts by the highway, on the bypass, killed the CBD. There is no planning for how these spaces evolve. Something new gets built and the old space is discarded. Now it’s the malls that are being discarded. It feeds into the trend to quickly put up cheap structures that are not built to be flexible or long lasting.

Kohl’s and Target seem to surviving in the mid price space and Walmart of course. Kohls has embraced AMZN by accepting returns for online orders. At the lower end Dollar Stores are also thriving. I’m really surprised how many retailers run their online as a separate business with little to no integration with B&M locations.

 

[Midpack]

I see nothing dishonest about that at all. In fact, it's exactly Zappos business model. It's what has made them so successful - letting people shop at home. Not sure if you need a 7 or 7.5 or 6.5? Order all 3 and return the 2 that don't fit. Is it actually "free"? Of course not, but it's factored into their pricing. They know exactly how their customers are shopping. If they wanted to stop it from happening, they'd need to change their return policy.

I get that, your example is reasonable. This women literally ordered 10 pairs at a time with NO intention to buy more than 1, maybe 2 by her own admission. She bragged about it. All buyers shared the cost of her 8-9 returns every time, not her. That’s taking advantage of a merchants good will and other customers IMO.

 

[disneysteve]

I don't know why people think it's such a good idea to keep outsourcing local jobs.

This is not outsourcing. Outsourcing is when companies move their operations out of the country.


When we shop online from Amazon or Zappos or Target or wherever, those orders are still processed and delivered by US workers, very often locally. In every case, the delivery is handled by a local worker. In the case of Amazon, there are several distribution centers in our region that employ hundreds of local folks. As someone else mentioned, Amazon is constantly hiring. Even throughout the pandemic, they've hired tens of thousands of new employees. Many of the folks who lost their jobs when other retailers closed got new jobs (and often higher paying ones) with Amazon either in the warehouses or driving their fleet of delivery vehicles.


We do not buy our groceries online (except for the occasional specialty item ordered from Amazon or elsewhere) but when I go shopping at our local store, I think there are more Instacart employees in the aisles than there are regular customers. Online grocery shopping has created jobs for hundreds of people in our area. Places like Target and Walmart also hired a lot of people to pick online orders.

 

[gayl]

I unfortunately return more than 1/2 my online clothing purchases. Don't even get me started on shoes! There's only 1 brand I can wear (Skechers) but recently they've updated their online service. Now I can ask if it has a "tall toe box" and "Tim the Shoe Guy" let's me know if it's worthwhile. "He" even suggests an alternative if the toe box is to slim (not wide feet just fat toes). I guess Amazon could be an option but they don't know their products.

 

[Freedom56]

There are far too many malls in this country. More than anywhere else on this planet. The Amazon Prime truck can now be seen seven days a week on our street making deliveries. It's much more convenient buying online from Ebay, Amazon, or other sites. The local mall just scrapped plans to convert the shuttered Sears store into a Costco after they realized that Costco would wipe out other smaller stores in the mall including the fast food court. They still have a JC Penny and Macy's store to worry about. The other problem is that the landlords are asking too much for rent to the point where a small retailer is better off operating in their home and selling online through the Ebay and Amazon market places.

 

[gayl]

Great space alternatives:

Mall -> housing: (online shopping) https://www.kron4.com/news/bay-area...hilltop-mall-in-richmond-with-retail-housing/

Office Complex -> housing: (WFH) https://patch.com/california/walnutcreek/new-walnut-creek-housing-near-shadelands-moves-forward
https://www.paloaltoonline.com/news...lding-near-california-avenue-caltrain-station

 

[disneysteve]

The other problem is that the landlords are asking too much for rent to the point where a small retailer is better off operating in their home and selling online through the Ebay and Amazon market places.

This is a great point that we don't hear nearly enough. The internet has made it possible for millions of people to start their own business without having to pay the overhead required for a B&M location. My wife has a sewing business the operates out of our living room. I've had an online collectibles business since 1986. Lots of people make and sell jewelry, clothing, soap, candles, toys, and all sorts of other products. If the business is big enough, maybe they rent a small commercial space but the transactions themselves are still 100% online.


And there are some great hybrid options cropping up too. Around us, there is a store in a downtown business district that has weekly "pop up" shops. Basically, for $20/day you can rent a space to sell your wares. My wife has done it a couple of times. It lets small businesses get public exposure without the huge financial commitment of renting their own store. If malls want to survive, maybe they should do more of this. There was a mall in the Orlando area that went this route and created a bunch of mini stores for local artists, crafters, and small businesses. There were still a few traditional stores and food locations, but the bulk of it was the small businesses.