Can fitness centers save malls?

Discussion
Rendering of Life Time's planned fitness complex at Southdale Center in Edina, MN - Image: Life Time
Jun 14, 2017
Tom Ryan

Southdale Center in Edina, MN, the nation’s first indoor regional shopping mall, is bringing in a three-story Life Time fitness complex as one of its anchors to reposition as a “healthy living, healthy aging, healthy entertainment destination.”

The 120,000 square-foot athletic “resort” will occupy redeveloped space where a current J.C. Penney store is located with an expected opening in early 2019. Rooftop pools and a beach club will be among its amenities.

The shopping center, opened in 1956, is currently anchored by Macy’s, Herberger’s and Penney.

“This project with Life Time is part of a larger vision for Southdale Center — to create a connected community epicenter,” said Michael McCarty, EVP of development operations at Simon.  “With new nearby apartments, the recently opened Hennepin County Service Center, a hotel coming soon, and this athletic resort on the way, Southdale is realizing that vision.”

Life Time chairman, CEO and founder, Bahram Akradi, said it has created detailed plans that transform retail shopping centers into “healthy lifestyle villages,” where people shop, live, work, entertain, socialize and exercise, visit their doctor and relax at the spa.

Said Mr. Akradi, “Our focus is to develop all-inclusive destinations that encompass the full spectrum of daily life for thousands of individuals, couples and families of all ages.”

With Macy’s, Penney and Sears all closing stores, malls are or will be soon looking for new anchors. But with department stores losing their appeal overall, shopping centers are seeking fresh ways to revive foot traffic amid the rapid growth in online selling.

A study earlier this year from JLL Retail, the shopping center owner, found that restaurants, supermarkets such as Whole Foods and Wegmans, and entertainment options such as movie theaters and Dave and Busters are being used as traffic drivers if not outright anchors at shopping centers.

DISCUSSION QUESTIONS: Do you think a fitness center could be a viable alternative to a department store as a mall anchor? Can many malls benefit by positioning themselves around healthy lifestyles?

Braintrust
"I'm glad to see malls taking the initiative to cater to the shopping and lifestyle priorities of the modern customer."
"In the successful mall of the future, traditional retail stores will occupy a minority of the space."
"To survive, malls need to become experience centers, not just shopping centers. Offering experiences like fitness centers makes sense."

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24 Comments on "Can fitness centers save malls?"

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Paula Rosenblum
BrainTrust

It seems that various malls are finding creative ways to become more relevant again. I think fitness centers might be okay, and hard goods and durable goods are projected to continue their upward sales trajectory for some time.

The main flaw with that “25 percent of malls closing” clickbait is that it drew a straight line between trouble with broadlines (typical anchors) and closing malls. There are definitely alternatives to draw traffic to the mall. The mall operators’ job is to find different kinds of traffic pulls. One size will not fit all, or we’ll be right back where we started from.

Richard Layman
Guest
6 months 1 day ago

There are three different issues. One is absorbing otherwise vacant space, especially in the context of department store consolidation and closure. Two is absorbing space with uses people actually desire. Three is whether or not the new uses will generate crossover clientele for the stores.

Property owners are driven by the first two and probably pay lip service to the third. But it’s unlikely that fitness center users are likely to be frequent retail customers for the co-tenants. Instead they are likely to be singly focused on whatever they intend to do at the fitness center. This is an issue in cities and increasingly restaurant-focused “neighborhood commercial districts.” Especially as restaurants become more high profile, listed on local, regional and national “best” lists, etc. Their customers don’t have much interest in exploring the rest of the shopping district, let alone tying shopping to their visit to the restaurant. They are exclusively focused on the restaurant experience.

Scott Norris
Guest

Up here in the North, however, in the ever-dark between November and March, there is an appeal to getting out of the isolation of our houses and being somewhere bright, warm, with other people, and getting exercise, perhaps go out to dinner, and maybe pick up groceries on the way home. (If we could put a heated dome over the Minneapolis Lakes you bet we’d be there every night!)

Really this development (and hotel tie-in, and government services center) brings Southdale so much closer to Victor Gruen’s original vision: he was bitterly disappointed that the mall ended up being only about commerce and not about community.

Mark Ryski
BrainTrust

Mall operators have space to fill and so they’re finding ways to fill it. Fitness centers, health spas and movie theaters can certainly help soak up some of the increasingly available and attractive space. Having tenants like these give people more reasons to visit the mall and so in this regard it’s helpful. That said, traffic intention/motive matters. Changing the tenant mix may give people a reason to visit the mall, but it won’t necessarily create a significant amount of sales opportunities for retailer tenants. Overall, it’s a sensible and practical move by mall operators.

David Livingston
Guest
6 months 1 day ago

Fitness centers absolutely benefit a mall. With an aging population, early retirees and a focus on health, the fitness center is the new workplace. Instead of going to work, many spend their day at a high-end fitness center exercising, taking classes, lounging at the pool and having lunch. With complementary daycare, Wi-Fi and exercise workstations for laptops, I’m seeing more people turning the fitness center into an office. Some of these facilities have thousands of members. In my opinion you want to have a club that caters to higher-income people. Avoid the $10 a month-type clubs with minimal features.

Dick Seesel
BrainTrust

Creating a fitness center out of an existing mall anchor is a creative way to reinvent excess real estate instead of waiting for another retail tenant or tenants to emerge (unlikely) in today’s overspaced environment. I’ve been in the J.C. Penney store in question and it was grossly overspaced for the volume it probably generated during the last few years.

Students of retail history (and Minnesota natives like me) know that Southdale was the first fully enclosed regional mall in the U.S. It served its purpose as a retail mecca — and community center — for many years, but the mix of anchors and nearby competition from Mall of America has made it less relevant in its current form. So the Simon team deserves credit for finding new reasons for people to come to Southdale and other malls like it.

Max Goldberg
BrainTrust

To survive, malls need to become experience centers, not just shopping centers. Offering experiences like fitness centers makes sense. Malls have the physical space and the parking spaces necessary to pull this off. A large fitness/wellness center will attract hundreds of customers each day. And that many be hundreds more than would be drawn to another department store.

Lesley Everett
BrainTrust

Time is one of the most important commodities in our busy lives and if we can get and do several things in the same place then it’s a bonus. This seems like a good replacement for department stores and we could see a positive sales impact for malls with more people taking advantage of their favorite stores being in the same place as their leisure and health activity, and vice versa.

Art Suriano
BrainTrust
I think a fitness center is an excellent idea and just one of many outstanding concepts that can help the mall of the future transform itself into a desirable place to visit. We forget that malls have been changing since they were popping up during the 1950s, first all-outdoor, then enclosed with food courts, then with movie theaters and arcades and more. Easton Mall in Columbus was one of the first “village” style malls. Malls will continue to find what works for them because malls have a few benefits other than just shopping. Many customers go to the mall just to browse and get some exercise, or perhaps to get some food and catch a movie. All of this is fine because more often than not it leads to impulse buying or finding an item the customer may return for the following week to purchase. So whether it’s the state-of-the-art fitness center, the newest and greatest entertainment center, convention hall, whatever; if it’s different, exciting and has lots of appeals, curious customers will respond. That’s… Read more »
Ian Percy
BrainTrust

Do we really need more fitness centers? They, like all other categories, are typically over-built by a factor of five. So some will move into vacated stores in struggling malls often leaving other empty spaces behind them. Chances are this is reorganizing the deck chairs on a sinking ship.

Using the space for this function may take up space, but how many people finish their workout and then go shopping? As much as I can tell most people workout before work or after, neither time is a springboard to shopping.

Chris Petersen, PhD.
BrainTrust

The age of malls is over, at least as originally conceived. Malls simply can’t draw enough traffic via stores alone to justify the premium retail leases.

Perhaps the healthiest thing for malls to do is to stop thinking in terms of “anchors” to replace the dying department stores. Bahram Akradi has coined a very appropriate term: “lifestyle villages.”

The large physical space formerly known as the mall needs to find multiple ways to attract customers to make multiple visits. What better way than a fitness center which results in multiple visits per month? However, a fitness center attracts a small core group of customers. Malls need a variety of lifestyle experiences and businesses beyond stores to attract a broad base, especially Millennials.

In the successful mall of the future, traditional retail stores will occupy a minority of the space. The key for those retailers is to figure out how they can transform to tap into the new “mall lifestyle” and become a part of it.

Ian Percy
BrainTrust

Excellent contribution, Chris. The notion of “lifestyle villages” is exactly the idea that needs development. Previously in RetailWire, I’ve pointed out that perhaps we need to return to the ancient concept that the marketplace was where you went for everything — for food and stuff you need but also for news, social engagement, entertainment, public debates and so on. It was the true heart of the community.

Karen McNeely
Guest

Heck, some people even visit a fitness center multiple times a week! I don’t go near the place, but my Millennial children go about five times a week.

Jasmine Glasheen
Staff

Fitness centers and grocery stores can be very successful in driving traffic into malls, as can indoor events such as craft fairs, ethnic festivals and art showings. Brand outlets are another option. I’m glad to see malls taking the initiative to cater to the shopping and lifestyle priorities of the modern customer.

Karen McNeely
Guest

This is so smart. I really hope that they also add a grocery store, options for prepared meals and other places in the mall that would make this a one-stop shop. Convenience is the internet’s largest competitive edge. Having multiple functions under one roof with a place you have to physically go to (you can’t exercise on the internet) gives brick-and-mortar a way of competing with that convenience.

Scott Norris
Guest

Southdale in fact had a big Red Owl grocery store when it opened! However, there’s a very impressive Lund’s as well as a SuperTarget and a Cub Foods within a couple minutes’ bike ride. But the on-site restaurants (many with outside entrances) really should consider how to site and fulfill a prepared-meal location more convenient to where the LifeTime patrons will be moving through!

Lee Kent
BrainTrust

Of course! This is a great idea and use of mall space. Malls are destinations and can house anything. They do not, as we have learned, have to be all about shopping. Consumers want convenience and experiences. It’s past time to think outside the box. So to speak.

For my 2 cents.

Craig Sundstrom
Guest

“…opened in 1956…” This is, of course, THE original enclosed mall … the ancestor of all that have come since; and Victor Gruen, who developed it as a new “town square” for suburbs that lack them, would probably smile at the mention of “connected community epicenter.”

All that having been said, I’m dubious of the one being a “replacement” for another. The whole point of the clustering of shops in a shopping center is the synergy that develops (go from Dayton’s to Donaldson’s and pass all the shops in between). I just don’t see that relationship between a Macy’s and a gym (even a big one with cabanas).

Patricia Vekich Waldron
BrainTrust
Patricia Vekich Waldron
Retail and Marketing Expert; Former IBM Executive
6 months 1 day ago

I know Southdale well — given the change in demographics, it’s a great option to revitalize America’s first enclosed mall. Here in San Diego, one of the few busy tenants at Horton Plaza is the 24 Hour Fitness.

Sandy Turner
Guest

Fitness centers, grocery stores, farmer’s markets, and pop up retail are all great ways to draw the consumer away from their computer and to engage them in the B&M retail world.

Today’s consumer no longer wants to go to one place for clothes, a different place for groceries, a third place to work out, and so on (hello, Amazon). That said, a consumer will consider going to several different places if they feel each retailer engages them and offers an experience.

So proximity alone will not make a mall anchored with grocery, fitness, or anything else for that matter, successful. The shopping mall’s best bet is to offer the benefit of proximity to retailers who have already mastered the customer experience.

Meaghan Brophy
BrainTrust

Absolutely. Gyms and fitness centers are anchors for many strip malls. Why wouldn’t they work as anchors in traditional malls? I wouldn’t expect a gym to drive traffic to other retailers, but I think the concept of the mall, as we know it will soon be replaced altogether. Mall operators need to find new tenants outside of their traditional spectrum. Gyms, grocery and health stores, and spas are all successful categories still bringing in customers. Within the coming years, malls will not be exclusively retail destinations, but “lifestyle” destinations.

Ricardo Belmar
BrainTrust

We’re seeing more and more mall owners become increasingly creative at finding new tenants to replace anchor stores that are closing. Fitness centers may work well depending on the demographics of nearby customers. But it may not work everywhere. The key for malls is to diversify here and not create more cookie cutter malls everywhere. Otherwise they’ve just traded one failing tenant for another one destined to fail later for lack of uniqueness.

Min-Jee Hwang
BrainTrust

I agree with Max in his point that malls need to tap into experiences in order to survive. There are countless studies about how Millennials currently have the highest spending power and they prefer experiences over material goods. Is a gym the answer? Maybe not. But it’s a step in the right direction. Getting consumers in the area of the mall to work out, go bowling, or see a movie are great ways to improve traffic. Vacancies are the norm at many malls, but filling that space with something that fosters experiences, instead of just shopping, will help improve the chances of that shopping center sticking around.

cisco support
Guest
5 months 20 days ago

Fitness centers play an important role in our life. It is the place where every person wants to go to remain fit.

These days many malls have fitness centers — it is one of the ways to attract the people towards the mall. Yes, fitness centers are playing an important role in saving the malls.

wpDiscuz
Braintrust
"I'm glad to see malls taking the initiative to cater to the shopping and lifestyle priorities of the modern customer."
"In the successful mall of the future, traditional retail stores will occupy a minority of the space."
"To survive, malls need to become experience centers, not just shopping centers. Offering experiences like fitness centers makes sense."

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