The Future of Retail & Adaptive Reuse of Malls

The Future of Retail & Adaptive Reuse for Malls

COVID-19 has changed our lives in so many ways. Not just in how we interact personally but monetarily as well.

The first six months of 2020 will have a lasting impact on the American economy.

Whether the recovery is quick to happen or slow to develop, businesses will need to adapt to a rapidly evolved economy that has left many retailers already reeling from the effects.

Traditional mall anchor stores such as JCPenney, Neiman Marcus, Nordstrom, Kohl’s and Macys have been devastated by stay-at-home orders that are only just now lifting in many states. Two of the largest retail giants – JCPenney and Neiman Marcus – were already struggling in the eCommerce era, but have filed for Chapter 11 bankruptcy protection this quarter. JCPenney alone has already or will close nearly 250 stores. That’s 30 percent of its locations.

And with those closures comes a shrinking sales market for designer brands that have traditionally found steady customers inside large chains. Big box stores probably were not going to last forever in their current state, but the COVID-19 crisis has hastened that decline by years.

“Malls and big anchor tenants are going away — or at least they’re going to be greatly shrunk,” Steven Cox, a marketing professor at Queens University of Charlotte, told the Charlotte Agenda. “That’s going to just accelerate dramatically.”

In fact, according to a report from Green Street Advisors, “over half of mall-based department stores [will] close by the end of 2021.” Green Street goes on to predict, “This could trigger co-tenancy clauses for in-line tenants and accelerate the downfall of many malls across the country.”

Leadership teams at the retail giants and others like them are scrambling to figure out how to regain revenue that was already sliding due to the rise of online shopping and the decline of in-store purchasing.


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Some brands are already moving products to other locations, including online sales. Others will open their own retail locations, be it outlet stores or single-brand shops like we’ve come to know with The Gap, Hollister, Express and similar mono-branded shops.

One of the newer innovations beginning to take hold is subletting space within a larger store in order to operate a sort of mini-retail outlet. Think a layout like you’d see at Lids Locker Room inside Macys, or Sunglass Hut kiosks and Sephora stores inside JCPenney, but for single brands of clothes or other retail items. In this way, brands hold more control over what and where they sell – instead of working on consignment with the retail giants.

Robert Burke, Chairman and Founder of Robert Burke Associates, a consulting firm specializing in retail and fashion, has said that, with the fall of anchor stores, malls will need to get really creative in adaptive reuse. He expects brands to move away from wholesale and focus instead on a direct-to-consumer and a model within department stores where they control their own space and inventory.

Under the kiosks-within-an-anchor model, a single JCPenney location could be converted into dozens of such mini stores, all in need of occupancy, building, electrical and other essential permits. While adaptive reuse sometimes gets a bad rap for being expensive, it offers environmental benefits, creates jobs for laborers, and usually bolsters economic growth within the neighborhood. According to a 2016 report by the National Trust for Historic Preservation and Preservation Green Lab, historic rehabilitation has a 32-year track record of creating two million jobs and generating $90 billion in private investment.

Permitting for these smaller spaces-within-a-space does not have to be complicated, especially if you work with an ICC-certified permit expeditor who can templatize the project across the country. For example, at Express Permits, we’ve worked with several national brands to replicate retail spaces in multiple locations across the US. Our nation-wide experience helps us know what to look for in terms of local permit regulations, and our ICC certification ensures we understand how plans work under different sets of codes.

Turnaround and communication will be the keys to successful mall re-use as space and opportunity change. By working with Express Permits, you will maximize your time and limit the red tape that bogs everything down. Contact Express Permits to help you bring your 21st century idea to life.

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