NEW YORK– Macy’s plans to close nearly 40 stores could be a death knell for many malls that are already on the brink. In most cities the sales have already begun. At least a dozen of those stores are in malls that are already troubled by store closings and declining sales.
“How difficult is it to replace Macy’s? It’s almost impossible,” said Howard Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment firm.
He said Macy’s was smart to identify its weak stores and to “do what you got to do.” But the malls left behind are going to have a tough time surviving without the legendary retailer.
Almost 500 workers in Virginia will be seeking new employment
Macy’s has announced the closure of six Virginia stores, three of which are located in Henrico, as part of a nationwide sweep that will see the closure of 36 stores. The two Macy’s at Regency and the store at Virginia Center Commons Mall will close.
There were 216 employees between both stores, and a total number of 489 employees will be let go in Virginia. The other Virginia locations that will be shuttered include Chesapeake Square, Chesapeake; Peninsula Town Center, Hampton; and Military Circle Mall, Norfolk.
“The department store business, it’s the worst segment in retailing,” said Davidowitz. “It’s the highest cost operator, they’re not growing, and they’re in a world where the customer is looking for a great deal.”
He said that some malls might be able to convert to other purposes, like hospitals, condos or corporate offices. But that kind of change is a lengthy and expensive process, and the mall is likely to sit abandoned during the transition, as a so-called dead mall.
The two-level parking lot along Quioccasin Road, adjacent to Macy’s, will come down to make space for new retail shops.
The new ownership at Regency envisions a future mixed-development plan for the mall, and recently announced plans to invest $30 million in renovations.
Developers Rebkee Company and Thalhimers Realty, based in Chesterfield and Henrico County respectively, hope to revive what was once the leading mall in the Richmond area. The plan for Regency’s future includes a shift away from just retail, with the addition of entertainment and dining, a spokesperson confirmed.
Regency plans to survive Macy’s loss, with big plans ahead
“While we would love to see Macy’s stay at Regency Square, we incorporated some departures into our overall investment analysis of Regency Square before purchasing the center,” Mark Slusher, Senior Vice President for Thalhimer Realty Partners, said.
In addition to a planned $30 million renovation to the 40-year-old shopping mall, Regency’s owners said it was “in negotiations with over 15 national retailers and entertainment companies interested in occupying the space being vacated by Macy’s as well as other locations within the mall.”
Those new tenants would be announced later this year. Regency would also like to attract more local restaurants and businesses to the indoor shopping center.
“Regency Square is committed to promoting local business and a family-friendly retail environment,” a Regency spokesperson wrote in a press release. “Both of which are important aspects of the ongoing strategy of creating a distinctive shopping and entertainment experience.”
In addition to new shopping and dining options, Regency has asked the county to improve the roads around the mall.
They hope the county allows “road design improvements to Quioccasin Road and Parham Road which will improve overall traffic flow to the shopping center, create the opportunity for a new and expanded signature entrance into Regency Square, and enhance the property’s visibility.”
“New stores facing outwardly toward Quioccasin will follow with openings in 2017 and a new prominent mall entrance will become the gateway for entertainment and restaurant uses to be added in 2018,” the press release continued. “Existing retailers will remain open and operational during the phased renovation process, which will be actively managed to minimize inconvenience to their customers.”
Regency plans to keep the mall indoor
Unlike the recent and successful renovations that transformed The Shops at Willow Lawn from an indoor mall into an outdoor mall, Regency plans to stay covered.
“With so many outdoor shopping options in the Richmond area, Regency Square will remain predominantly an indoor shopping venue. The center will also include various outdoor amenities thereby creating its own unique shopping and dining experience,” Julie Gordon, Regency Square’s Marketing Director, said. “Changes to the center will preserve what our customers love about Regency Square, while incorporating a fresh, updated look and modern approach to retailing.”
Regency Square’s General Manager Steven Bonniville said he hoped the changes would “breathe new life” into the shopping center.
“For example, Regency Square is considering interior renovations that incorporate more natural light creating an open-air feel,” he said. “While the final tenant mix is still under review, our current expectation is that approximately 250,000 square feet of space will be ear-marked for fashion and service retailers; 20,000 square feet for health and fitness; and 150,000 square feet devoted to restaurants and family-friendly entertainment.”
Many of the malls where Macy’s closing are losing lots of other tenants, according to local news reports.
At the Berkshire Mall in Lanesboro, Mass. Best Buy is closing. At the Pony Village Mall in North Bend, Ore. JCPenney is closing. The Cary Towne Center in Cary, NC, is losing Sears. The Eastfield Mall in Springfield, Mass., is losing JCPenney, American Eagle and RadioShack.
The sales have begun at Macy’s, starting Jan. 11 and running eight to 12 weeks. No refunds will be allowed, and all sales will be final.
