Megamalls Plot Their Comeback Following Covid-19 Closures

Teens are loitering outside Hollister. Shoppers are driving home reeking of Auntie Anne’s pretzels. Are malls finally healing?

Let’s check the directory

The megamalls that starred in Retail Brews past have mostly reopened, with vacancies where recently bankrupt tenants used to be. Here’s a sample:

American Dream welcomed shoppers back on Thursday, months after its retail stores had originally opened in March following several delays.

• A few dozen of its 300 storefronts opened, including Zara, H&M, and American Eagle; the anchor store where a Barneys New York was supposed to be is empty.
• The attractions that put American Dream in parents’ nightmares—water park, ski slope, Nickelodeon rides—are operating at limited capacity.

Hudson Yards reopened on September 9 with most of its tenants but without many shoppers. In the weeks since, it’s tried to lure them back with cutting-edge safety features like...QR codes.

Mall of America returned from pandemic leave in June, with 150 of 500 stores operating. Without the 150,000 daily visitors who crowded Mall of America’s four stories pre-pandemic, the shopping center laid off 211 workers last month and furloughed another 178.

What really counts

Walking groups had malls to themselves for months, but shoppers are slowly returning.

• In a September 15 Coresight Research survey, 53% of consumers said they were still avoiding shopping centers—the lowest ghosting rate since July.
• Visits to indoor shopping centers are ticking up by Placer.ai’s count, but they’re still 37% below 2019’s baseline.

Another problem: Megamalls’ finances. 1.5 mile waterslides are expensive without riders (or rent) to pay them off. Triple Five Group, owner of Mall of America and American Dream, is 90+ days late on a mortgage payment for MoA...and it used the property as collateral for American Dream loans.

• Still, Triple Five Group is plowing forward with plans to develop its largest center yet in Miami.

Bottom line: Select mall photos aren’t telling the whole story. The shoppers who want their Build-A-Bear fix will find fewer stores and eventually fewer centers altogether. According to real estate firm Reis, U.S. mall vacancies hit 9.8% in September—a record high. One-third of all malls are expected to close by 2021.