Just as an anchor keeps a vessel confidently in place, large department stores have provided confidence to malls for decades.
But in recent years, as online shopping and mixed-used developments — such as lifestyle centers — grow in popularity, anchor stores have begun closing their doors.
Later this month, the Sears at Chapel Hills Mall will have its last day, said Jill Lais, regional marketing director for Chapel Hills Mall and The Citadel.
“National chains, like Payless Shoes and Sears, those retail concepts have cycled down,” she said. “These stores aren’t just pulling out of these two malls — they are basically shutting down all of their operations everywhere.
“Both chains were on a watch list last year for possibly filing bankruptcy, so it’s not like all of a sudden these closures are happening. We’ve known they were coming.”
The Chapel Hills Mall location and the Sears in the Broadmoor Towne Center are among 80 stores set to close across the country. The retailer has already shuttered 182 locations nationwide.
Mark Useman, executive managing director with Cushman & Wakefield – Colorado Springs Commercial, said it’s important malls fill any anchor-store vacancies.
“Those big anchor candidates benefit those smaller retailers in the mall,” he said. “When a mall loses one or two anchor stores, they’ve got to be able to repurpose that in order to generate the traffic you need to support those smaller retailers.”
Useman said those spaces will need to be repurposed because big department stores aren’t expanding any more.
“They’re downsizing or closing stores,” he said. “So there are not a lot of new potentials like that to come in and just take their place.”
Going forward, Useman said malls or the owners of the large stores will need to consider nontraditional uses for the space.
“They can be used for entertainment, like the trampoline park going in at the Pueblo Mall, or some other kind of venue besides just traditional department stores,” he said. “It’s not going to be easy to fill them, but it can be done.
“Look at [Chapel Hills]: The former Kmart space in the back of the mall was repurposed to expand the cinema, which again is an entertainment use.”
Michael Roslin, associate broker for Front Range Commercial, said some owners are redeveloping their malls to be more like lifestyle centers.
“The owners look at the anchor store vacancies as a chance to reposition their mall and maybe knock down some of it to create some sort of lifestyle segment to complement and enhance what they have,” he said.
In December, developer Mehrdad Moayedi purchased Collin Creek Mall in Plano, Texas, and announced his plans to turn the shopping center into a $1 billion mixed-used project.
His proposal includes tearing down sections of the 37-year-old mall and building townhouses as well as office space on the site, leaving about 400,000 square feet of retail space.
“There will be a lot of boutique retail — people not impacted by the Amazon effect,” Moayedi told the Dallas Morning News in December. “There will be 15 to 20 restaurants.”
Lais said Namdar Realty Group, the owner of the Springs’ two malls, has somewhat less ambitious plans locally, but the investment firm does expect to continue looking for new and different types of shopping experiences for customers.
“I feel very fortunate to work at the two malls in the city because I think that we’re constantly working to evolve and to look for ways to make both locations a great place to shop and be,” she said.
The mall has been in communication with the real estate company that acquired the soon-to-be vacant Sears space at Chapel Hills Mall about its plans, Lais said.
“We’ve had very proactive conversations with them about what’s next for that building,” she said. “They’re proactively seeking retailers to fill that space.”
Lais said she could see the new tenant including an entertainment option or a charter school similar to the one being planned for the former Macy’s location at The Citadel.
“There also are some shopping centers putting gyms in those larger square footprint buildings,” she said. “It really can be anything that will bring people to the shopping center.
“The important thing is those retail spaces evolve and the malls evolve with the changing times. That includes providing an entertainment value, such as events, and also other types of stores that provide some sort of entertainment.”
For instance, Lais said both the city’s malls have a for-profit Fun4kidz Playground, which has a ball pit, trampoline and air guns with soft foam balls for children.
Additionally, at Chapel Hills Mall, there is Gaming To You that has laser tag, dart wars and video gaming, she said.
“As long as shopping centers continue to evolve and change, kind of looking at the needs of the consumer and providing what’s necessary — like entertainment and different types of stores to come and visit — they can survive,” Lais said, adding that since Namdar purchased Chapel Hills about a year ago, 23 new stores have opened at the mall.
Right now, she said, both malls are at about 90 percent occupancy, but she declined to disclose how that compared to this time last year.
“You have a store leave and then you have a couple come in, and that’s just kind of how it ebbs and flows,” she said. “I think some malls may be dying, but the two in the Springs are doing well — we’re thriving. And we’re working to evolve and change.”
Aside from the Sears and recent Payless Shoes closure announcements, Lais said neither mall has been notified of other stores planning to shut their doors this year.
“Typically, in the first quarter, that’s when a lot of national retailers — particularly those who are looking at bankruptcy and things like that — tend to close their stores,” she said. “The upside to that is with some of the national chains going out, it’s giving regional and local stores the opportunity to go into shopping centers a little bit more.”
Lais said the malls have a specialty leasing manager in charge of attracting local and regional tenants.
“We also have a leasing office out of New York where our corporate offices are, and they handle a lot of the national leases,” she said. “It’s important for malls to have a good mix of national, regional and local concepts moving forward, and we have that at both malls.”