The Detroit News reports that Macy’s now plans to close 100 stores. The company will announce in the coming months whether any of its 19 Michigan locations will be part of the closures planned for early 2017.
Announcements like this have become common in recent years, as retailers try to figure out the proper mix of retail channels. Early this year, CNN proclaimed “Store closings are the hottest trend in retail.”
Malls with declining sales will suffer even more as large retailers continue to pull out of under-performing locations. According to Fortune:
“In the cases of Penney and Sears, it’s easy to see where they’d likely pare their fleet: Both chains have a large chunk of their stores in so-called C and D malls, which is real estate parlance for weak malls with declining sales per square foot. Macy’s, Dillard’s and certainly Nordstrom, are in better shopping centers.”
As retailers continue to cut their expenses, and their brick and mortar footprint, millions of square feet of empty retail space will hit the market over the next few years. Landlords, along with commercial real estate brokers, will need to become even more creative to fill this flood of available space. Malls, in particular, will have to find new ways to lure shoppers to their location.
Paul Bensman, Associate Broker / CEO of Locations Commercial Real Estate Services, feels that many retailers are putting a nail in their own coffins by cutting back on service and selection in their mall stores and encouraging online ordering.
"Take Lord & Taylor, for example. Over the last 30 plus years, I enjoyed shopping the men's department at Lord & Taylor. The last few years of shopping there have not been so pleasant, and it seems to get worse every visit. When entering the store, you see a sign on the door that says Shop Lord & Taylor 24/7 Online, and it gives their web address. To me, this sign says, ‘don't come in, just turn around and go online.’ When I do enter the store, I find a smaller variety of goods to choose from. It feels like Lord & Taylor is trying to force consumers out of its stores and onto its website.
One particular day, I went to the store to get a new dress shirt for a wedding I was attending that day. Men, more than women, often shop out of necessity. I could not find the shirt I wanted in my size. The men's department had clothing just piled up on tables; the displays looked worse than Walmart on Black Friday. It took me over 10 minutes to find a sales associate, and it took them another 15 minutes to check the stock. After the search the sales associate, told me that they did not have my size in stock, but they would ship it to me at no charge.
I needed the shirt that night, so I told the associate ‘no thanks’, left the store, and went to another store in the mall to purchase the shirt.
I’m not saying that better service alone will save the brick and mortar retail world; retailers must find the right mix of online sales and in-store sales to survive. Department stores should be more than just somewhere to place or pick up your online order. If retailers want to stay alive today, they need to step up their service, and give the consumer a reason to shop their stores. They must offer, service, selection, and competitive prices to stay in the game. I know that I would pay a little more to get good service and selection – plus the ability to run into a store at the last minute and buy a shirt."
