Bill Emerson

Mickey Drexler Takes on Shopping Centers

January 30, 2012

FROM RETAILWIRE:
At Financo's 22nd annual Retail & Consumer Industry Seminar and CEO Event held on the first night of the recent NRF Convention, Mickey Drexler, the legendary apparel merchant, urged shopping malls to "get more creative" to reverse the weak traffic trends amid the increased discounting options at retail and online. What steps should shopping malls be taking to differentiate themselves from heightened discount competition?      [more...]

This is one of those discussions where everyone is correct. Some malls are doing well and showing growth. These are typically what has always been referred to as the "A" malls. It also doesn't hurt to have an Apple store, which is so productive that it raises the sales productivity for the entire mall. The B and C malls are failing.

The harsh truth is that the biggest problem for the mall is that there are simply too many of them. In the last study I read, there was 46 square feet of retail selling space for every man, woman, and child in America. In Europe, the equivalent number is 2.5 feet. More deadly is that most malls are carbon copies of each other - same stores, same product, same promotions. The internet now commands 8% of total retail and is growing rapidly. Unless the malls can figure out how to offer value different from the internet, either through unique products and/or exceptional service, the ultimate answer is to close the B and C malls.