A number of major department and mall anchor stores have struggled or gone out of business over the past few years.
Macy's has closed hundreds of stores while Bed Bath & Beyond ended up being liquidated after a bankruptcy filing.
Burlington Stores, an anchor in many strip malls, has closed nearly 40 stores, and mall staple Rue21 has filed for bankruptcy and has closed all its stores.
Related: Essential retail chain files for Chapter 11 bankruptcy
It's easy to blame this on Amazon and digital retailers, or people going to malls less often, but that's not actually what's happening. Mall traffic is down from prepandemic highs but it has been climbing.
"During 2023, visits at indoor malls were down 5.8% compared to 2019 — a dramatic improvement from being down more than 15% in 2021. Similarly, open-air shopping center foot traffic was down only 1% last year compared to 2019," according to a new white paper, "The Comeback of the Mall in 2024," by foot-traffic analytics firm Placer.ai.
A news release citing the white paper notes that visits for the shopping center industry at large were down 2.3%, and "foot traffic may yet pick up again in 2024."
A number of retailers are struggling, and a major chain, which filed for bankruptcy once before, has continued to struggle and will close some locations.
Image source: Shutterstock
J.C. Penney struggles to do it right
Brookfield Properties and Simon Property Group SPG bought J.C. Penney out of bankruptcy in 2020 largely to keep the department store as an anchor for their malls.
That's a smart strategy given Macy's struggles, the closure of Bon-Ton in 2018, and the general lack of retailers looking to anchor malls.
J.C. Penney closed about 20% of its stores as part of its 2020 bankruptcy. But the chain, which operates 633 stores — most of which are mall anchors — has continued to struggle under its new ownership.
Sales have been dropping. The company's fourth-quarter net income fell 8.9% to $41 million and net sales dropped 5.9% from a year earlier to $2.3 billion, according to a Securities and Exchange Commission filing.
Sales dropped 8.9% for the full year to $6.9 billion with net income dropping more than 86%.
At the time, the company hinted at making some cost-saving changes.
"We are carefully managing risk to ensure the stability of our business if the retail environment is challenged in the balance of 2024,” the chain said in an email to RetailDive.
Sign up for the Come Cruise With Me newsletter to save money on your next (or your first) cruise.
J.C. Penney is closing locations
While J.C. Penney executives have talked about the opportunity to open more stores, the company has actually decided to close four locations.
“Regretfully, we are unable to continue our current lease terms for these store locations and have been unable to find suitable locations in the market," the company said in a media statement.
"We are grateful to our dedicated associates and the loyal customers who have shopped at these locations throughout the years. We continue to work to make every dollar count for America’s diverse, working families and welcome them to shop at our other JCPenney stores in the area and at JCPenney.com."
None of the affected locations are in malls owned by Brookfield Properties or Simon Property Group malls.
More Retail:
- Ulta CEO sounds the alarm on a growing problem
- Lululemon releases a first-of-its-kind product
- Target store introduces a new 'over 18' policy
- Amazon launches genius new subscription product
The four locations are anchor stores at the Shoppes at Bel Air in Mobile, Ala., Sikes Senter in Wichita Falls, Texas; and Elm Plaza in Waterville, Maine. The J.C. Penney at the Westfield Annapolis Mall in Annapolis, Md., will close in 2025, according to RetailDive.
Want the latest cruise news and deals? Sign up for the Come Cruise With Me newsletter.
J.C. Penney did make an effort to find more affordable locations in all four markets, but it said it was unable to do so.
