U.S. department stores gained market share last year for the first time in 30 years, according to Custom Growth Partners. Though the increase was just a single basis point — from 2.4 percent in 2009 to 2.5 percent last year — it is significant given the sector’s recessionary struggles.
Department stores and malls took the opportunity to reinvent themselves during the recession, offering fresh merchandise and new concepts to receptive consumers. Macy’s is expected to post its best annual sales increase since 2005. And Nordstrom saw a record $9.3 billion in sales for the year, a 13 percent year-on-year increase.
“Despite these improvements, department stores are still closing poor-performing locations, which has led to a unique opportunity,” said John Bemis, executive vice president and director of leasing and development at Jones Lang LaSalle. “Approximately one in every four malls in the U.S. features at least one unconventional anchor.” Such anchors form a veritable kaleidoscope of different merchants, including supermarkets, wholesale clubs, gyms, cinemas, spas, medical facilities, colleges, religious institutions and even theater groups. Jones Lang LaSalle says these tenants draw a new consumer demographic, increasing store traffic and boosting sales.
For its part, mall owner PREIT isn’t relying on retailers to fill empty spaces at its malls. This month Voorhees, N.J., town hall relocated from an outdated, overcrowded facility to the new, 24,300-square-foot Voorhees Town Hall at PREIT’s Voorhees Town Center. Similarly, the National Entrepreneur Center opened at PREIT’s Orlando Fashion Square. Sponsored by Walt Disney World, Orange County and the University of Central Florida, the prototype 22,000-square-foot NEC houses 11 business-assistance organizations, including the UCF Business Incubation Center. PREIT says it sees the potential for both uses to be duplicated in shopping centers across the country.