Hot on the heels of my podcast is another retail rumination. By now, it’s safe to assert that the conventional enclosed shopping mall—long the paragon of middlebrow American commerce—is an eviscerated zombie, trudging onward with no clear goal, and a huge contrast compared to the heydays of the 1970s and 80s. I’d wager that up to one-quarter of malls are, for all intents and purposes, dead: characterized by vacancy rates of over 40%, while mom-and-pop stores that lack a national presence dominate the remaining occupied space. Some of these malls are merely struggling but retain viability because of an anchor tenant that lingers amidst an otherwise underserved market. Others are so far gone that they’ve recruited churches and Community Theater to fill the vacancies; their only option in years ahead is to join the hundreds that have already closed.
A recent Atlantic Citylab article is a bit more sanguine than I am: while it recognizes the dire straits of a sizable chunk of middle-market malls, it suggests that any that aren’t dying (that is, the remaining 75-80%) are doing just fine. But are they? My previous ponderings on this beloved subject suggest otherwise. While about half of American malls are surviving well enough, even the standard for what constitutes “well enough” has downgraded considerably, as manifested by my blog articles on Oxford Valley and Quaker Bridge malls. Neither is dying. But Oxford Valley lost one department store in 2008 and has yet to replace it, while Quaker Bridge’s occupancy rate among its in-line tenants remains stuck at around 80%. This is normal at this point. And it constitutes a satisfactory performance by 21st century standards; from a 1985 lens, any mall that couldn’t secure all of its anchor tenants would be a disappointment.
Looking beyond the dead, the dying and the significantly maimed, what remains are the one-quarter of malls that still prosper, most of which attract a higher-income demographic. While a handful of middlebrow malls are thriving—my home city’s Greenwood Park Mall comes to mind—the majority of today’s successful malls typically have at least one of the following department stores as anchors: Nordstrom, Lord and Taylor, Saks Fifth Avenue, Bloomingdale’s or Nieman Marcus. Such is the case with Bridgewater Commons, just outside Somerville, New Jersey. 
It‘s a high performing, medium-sized mall on the fringe of the heavily urbanized portion of metro New York City, ringed by the I-287 beltway. While the department stores—Bloomingdale’s, Lord and Taylor, Macy’s—should be a dead giveaway that this mall is part of the top quartile, there’s no point in focusing on that because they speak for themselves. More interesting are the subtle details, like this humble storefront on the second floor:
Currency exchange is a standard feature at an international airport, particularly Travelex. But it’s not every mall that offers one as a permanent fixture. No doubt it’s a testament not only to the purchasing power within Somerset County, but to the county’s advantageous location in greater New York City. Somerville’s streetcar suburban character quickly gives way to car-oriented, expansive homes on large wooded lots to its west, helping secure Somerset County as one of the nation’s twenty wealthiest—an opulent satellite to an alpha world city. The outer-ring New Jersey suburbs undoubtedly host a lot of households whose breadwinners owe their livelihood to Wall Street and global trade, endowing them with incomes that help keep Bloomingdale’s—and Travelex—in business. Furthermore, it’s probable that affluent international visitors frequent this mall: it’s close to a variety of corporate headquarters with a multi-national presence, it’s reasonably accessible by NJ Transit’s commuter rail and bus (or a one-mile walk), and the inordinately low cost for apparel in the US has long attracted consumers from other first-world countries (though probably much more when the dollar was weaker).
The third and final indicator that Bridgewater Commons isn’t your run-of-the-mill middle class mall is the least conspicuous, but it’s patently visible here:
Do you see it? If not, let’s try capturing the storefront from a different angle.
Still haven’t picked up on it? Let’s look at another, more middlebrow mall fifty miles away, with a photo taken just a few days later.That’s right: Aéropostale has pioneered a completely different logo from the one most of us would recognize—the one the company has used for years. This decision could indicate two most likely motivating forces: the retailer has modified its brand for Bridgewater Commons to convey an ambiance that is more distinctive, more recherché. (Notice the backlighting on the Bridgewater logo: a timeworn strategy for conveying upmarket consumables.) The other motivating force is that the 40-year-old company is rolling out an entirely new logo, and it has decided that the affluent consumer of Bridgewater Commons is more brand-sensitive than elsewhere in the country. My vote is that the latter option is the correct one: the website deploys the softer, cursive, lower-case font instead of the forceful red from prior years. By the metrics of the advertising community, it’s a radical rethinking of the logo, but probably a necessary one, considering the brand has suffered the same plunging sales volume as many other youth-oriented retailers. And, according to this Forbes article, the most damaged companies have been those whose identity depends on their name and logo rather than the design, placing The Gap and Aéropostale in inauspicious company with more innovative, ductile “fast-fashion” counterparts like H&M or Forever 21. Such a brand overhaul is a testament to how much Aéropostale needs to reinvent itself, and clearly Bridgewater Commons offers a smart test market.
But it’s not the only one. Down the hall is another reincarnation.
I’ll confess I’m less familiar with this brand’s overall performance, or whether it has “rolled out” the new logo nationwide yet. But this article suggests that Columbus-based L Brands Inc. (better known for Victoria’s Secret and Bath and Body Works) has reintroduced White Barn as a standalone brand after years of dormancy, having lost the candle wars to the ubiquitous Yankee Candle Co. Perhaps I’m showing my age and candle ignorance, but this is the storefront I remember. Now it’s just “White Barn” and only operates out of about 30 locations (and, interestingly, the Bridgewater Commons location does not yet appear on the website at the time of this posting).
Will this upscale New Jersey mall—one of several fancy retailers near the I-287 beltway—prevail in the new era of retail? Time will only tell. But the evidence presented here indicates that some key tenants think it’s got staying power. One thing is certain: across all American malls (both flourishing and dying), virtually none of the in-line tenants that adorned the halls in 1975 still exist. I think of names from my childhood: Buster Brown, Chess King, Thom McAn, B. Dalton’s, Mr. Bulky’s. The retail sifting will continue through our surviving malls. But by 2025, who knows with the sieve will look like.
9 thoughts on “Measuring malls through malleability.”
It’s an ever-changing tenancy to be sure. Interestingly, White Barn and Bath and Body Works perform better in middle tier malls in less cosmopolitan areas. Large cities or proximity to large cities brings more competition and a more savvy shopper who sees the brand as mass-produced. Smaller cities and towns have more customers likely to perceive the brand as exclusive or desirable. It’s the opposite in very high end brands. Smaller markets have a niche base who will keep the store alive, but it will not be nourished with traffic. Even consumers who could afford these products are less likely to buy because it’s not what their friends buy.
Location has begun to fascinate me as I have moved from Midwest to East Coast and back. Further, you’re spot-on when you pinpoint the presence of non-American tourists, particularly on the coasts. Working in those malls necessitates an embracing of foreign cultures with appropriate staffing- Chinese or Japanese speakers, Portuguese speakers, and more commonly, Spanish speakers.
Eric, there’s sort of a connection between your hometown and the Bridgewater area: it is home to Big Pharma. Merck has its HQ and big operations in North Jersey, including White House just 15 minutes west of Bridgewater. And the former Imclone, now Lilly Oncology, is in Bridgewater. It is not surprising that a high-end mall would be located where well-paid pharma jobs exist in large numbers.
Thanks for the observation, and I have to ‘fess up that NJ can far more rightfully claim itself the epicenter of Big Pharma than Indianapolis, or anywhere in the Midwest. Indy has Lilly, but nothing else stands at Lilly’s caliber or magnitude, and many of its ancillary products (such as your aforementioned Lilly Oncology) are still there in northern Jersey. Thus, it’s no surprise that the incomes in that region can support multiple upscale malls. To the best of my knowledge, the entire state of Indiana only has one upscale mall: the Fashion Mall at Keystone at the Crossing, which is at a similarly located corporate park area near Indy’s I-465 beltway.
Our local mall in Annapolis, MD (a Westfield property) appears to be doing very well still by the measures in this article (Norstroms, Lord and Taylor, Macys et al). Thanks to your articles, I am always trying to take a more careful look. One thing I see is a proliferation of low brow kisoks often staffed by extremely pushy eastern European men and women. What do you make of these? A canary in the coal mine or just an attempt by the property owner to capitalize on some unique demographic?
Thanks for the response, Alex. I’m not aware of a national trend of low-brow kiosks run by Eastern Europeans, though I long ago noticed that mall kiosks did seem to function as an effective entry point to mainstream America for immigrant entrepreneurs. Many kiosks I have witnessed have been staffed (managed?) by Southeast Asian immigrants, and I think we’re probably all aware of the trend for young Middle Easterners (usually but not always males) with impeccable English selling Dead Sea-themed skin rejuvenation products, using tactics a bit more up-front than Americans would come to expect but still very courteous and never “pushy” (at least in my judgment). Perhaps what you’re seeing is reflective of immigration trends around Annapolis, which I’d imagine would get a little bit of everything?
Thanks for the heads up, Astara. Yeah, I guess I learned that I know next to nothing about White Barn. I had always thought of it as the “other” mall candle company, kind of like there used to be the “other” store competing with Bath and Body Works (does anyone else remember Garden Botanika?). Anyway, good to know those details that distinguish small and big markets. And I’d be hard-pressed to think of a Midwestern mall that would have a Travelex store–maybe Water Tower Place in Chicago?
Hmmm, I don’t even think they do, though there are also numerous currency exchanges in Chicagoland. I used to buy my bus passes there before I started the digital pass. I do remember Garden Botanika! Shockingly, they still exist as Zidle.com.
I learned that tidbit about BBW/White Barn from working there.
And it made sense to the businessperson in me, though I’d never considered it that way.
I wonder if you might elaborate more at some point on the overall fragility of these malls that seems, if not unique, a rather specific trait. It seems like if a mall isn’t 100% occupied, including all its anchors, with national or upscale local chain stores, then the only trajectory is decline and eventual abandonment. They don’t seem to follow the more gradual “filtering” process you see with housing or offices, where units slowly become less desirable and cheaper, moving downmarket, maybe getting renovated or adapted to some other use. With malls it seems they’re either at peak performance or spiraling towards doom. But why? What makes them so un-adaptable? Is it a “too big to fail” kind of situation? Big box stores face some of the same issues, but strip malls and Main Streets, and even dowdy residential neighborhoods don’t seem to crash and burn so hard.
Good points, Jeffrey. Bear in mind the two malls I have mentioned at the beginning (and have blogged about on previous occasions)–Oxford Valley and Quaker Bridge–are both underperforming, but I see no evidence that they will close. They could hang in there for another twenty years, much more akin to filtering. Furthermore, Lafayette Square Mall on the east side of Indianapolis has been a low-rent and basically a “dead” mall for over a decade, but it’s still limping along without any real discussion of closure that I’m aware of. Conversely, some malls decline to nothing quite rapidly, such as Bannister Mall in Kansas City…which represents still the most extreme example of suburban decay I have ever seen. (Also a blog topic of mine, picked up by The Urbanophile quite a bit later.)
This Bridgewater Commons article went to Huffington Post, and there, a Canadian commenter noted that malls often amortize their loans relatively quickly (in about a decade), so after that they can continue to operate at a mediocre status for many years and still remain fundamentally profitable. This could be true, and may explain how companies like Simon Property Group remain successful despite the fact that their fundamental model is imploding. It would explain why malls sprung up like mushrooms even into the 1990s, when quite a few malls had already died. And it suggests that even the shortest lived malls–like the Dixie Square in Harvey, IL–might have managed to eke out a return before its precipitous decline.
Here’s a link to the Huffington Post version of my article: http://www.huffingtonpost.com/eric-mcafee/evidence-of-affluence-sub_b_9183930.html