Jodi’s Journal: The truth about dying malls, Sioux Falls and the future of retail

May 20, 2018

It was only a few feet, but it represented a chasm in the world of retail.

After I walked past a sign at The Empire Mall proclaiming “We’re finally here!” from Forever 21, I reached Younkers, where going-out-of-business banners blared the department store’s upcoming closure.

In a matter of steps, I experienced one of retail’s many ongoing shifts. Forever 21, a clothing chain known for value pricing and fast-rotating merchandise, was expanding. Younkers, a victim of parent company Bon-Ton’s inability to turn a profit in eight years with its different brands of department stores, was going away.

The way we shop, the way we experience retail and the way stores and restaurants build loyalty have changed enormously in the past decade. They will continue to do so, as the world moves toward uncharted territory including autonomous transportation and augmented reality.

That’s why I’ve gone for the past several years to RECON, the retail industry’s largest real estate convention, which this year runs May 21-23.

It’s a chance for me learn more about what’s driving this industry — a critical part of the Sioux Falls economy —  and to share it with you.

Sure, we often get to share news about national retailers making plans to come to Sioux Falls and new developments set to bring more opportunity for expansion. We’ll do that again this year during our upcoming week of coverage. But my hope is to also put some needed context to the changes we’re experiencing in the Sioux Falls retail market.

Each year, approaching RECON, I ask myself if it’s worth it to go. Is there enough new to discuss?

My commitment this year was solidified by the Younkers closure and some of the questions and commentary I heard around “dying malls.”

There’s no denying malls in some communities are struggling. These are places where the demographics — mostly population and income levels — no longer support the traditional model of an enclosed shopping mall.

But that is simply not the case in Sioux Falls. It might have been had someone 20 years ago decided to build a second enclosed mall in the market; but because we were conservative and didn’t overbuild, The Empire Mall performs extremely well. The mall estimates it draws 12 million annual visitors – many times the population of this state. Its sales per square foot would stack up against any comparable property anywhere.

So when news came out that our first mall department store anchor was pulling out, I was able to respond with confidence that the proverbial sky wasn’t falling. I knew that other concepts likely would line up for that space. It might take a little while, as many larger national deals do, but I don’t see it sitting empty for long. It might even become another department store, rare as that is in the industry today.

Younkers likely won’t be our last significant closure, either. And Forever 21 definitely won’t be our last major new retail opening.

“We’re excited to make these announcements about how we’re going to redeploy space in a way that’s more interesting for customers and more productive for the property,” said Les Morris, director of corporate public relations for Simon, when I talked to him ahead of this year’s convention.

“All the lights are green. We’re very busy with redevelopment and expansion projects.”

This is the type of context that’s valuable for me to learn and to use in my reporting for you in our retail coverage, this week and all throughout the year.

I’ve been granted access to leadership at some of the industry’s biggest players, and I’m excited to share their perspectives with you. I’m equally excited to catch up with the many talented commercial real estate brokers representing Sioux Falls at this year’s RECON event. We’ll tell you which properties they’re marketing, how retailers are responding and what happens next to bring new deals to town.

I love covering this industry because it leads the way for so many others, in areas from the customer experience to marketing strategies. Watch those elements in retail, and you’ll get a preview of what’s ahead in health care, hospitality and even banking.

I invite you to visit siouxfalls.business often throughout the upcoming week, follow us on Facebook or on Twitter, and sign up for our free e-mail newsletter on the front page of our website.

I’m guessing by the time I check back in with you next week, I’ll have determined this reporting trip was a gamble worth taking.

Jodi’s Journal: The truth about dying malls, Sioux Falls and the future of retail

It was only a few feet, but it represented a chasm in the world of retail.

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