The American mall, as its consumers know it, has evolved over the past 50 years, and even the last 20. As the online shopping trend quickly clicks forward, more malls have struggled as consumers visit retailers online and create less foot traffic.
But Simon Property Group, based in Indianapolis, has not just changed that perception for its 108 properties, it has become the leader in the American mall space. Owning properties like the Fashion Mall closer to its headquarters and others like the Roosevelt Field complex in Garden City, N.Y., and the King of Prussia mall outside Philadelphia, the locations that it invests in are not only doing well, but they’re arguably the future of what a prospering mall will look like. And at the same time, the group’s 72 luxury outlets are following a similar modern trend.
Most of Simon malls are now considered the “A Malls,” according to Fortune, and it’s easy to see why.
Stroll through Simon’s Indianapolis’ Fashion Mall, and you’ll find some of the more common retailers like Gap, Nordstrom and Pottery Barn, but you’ll also find a Tesla dealership and unique local restaurants like Napolese (a pizzeria) and sweet shops like California’s See’s Candies. Niche retailers like Swatch watches and David’s Tea have also found their way into the space. And if you’re tired of shopping, take a pause on leather couches paired with charging stations for revitalizing your cell phone.
The Fashion Mall is not alone. Simon Mall has overhauled its empire to continue to pull in customers by focusing on the malls that work well and investing in them while letting go of those that haven’t done as well.
“We’ve cleaned a lot of stuff out, and we’re very sensitive to creating the environment where those retailers can do the most business,” CEO David Simon explained to investors back in July.
Outside Philadelphia, the King of Prussia mall is now the second largest mall in the country, especially after Simon added another 50 stores — part of a $200 million renovation. The Roosevelt Field mall is a former airstrip — the actual place where Charles Lindbergh departed on the groundbreaking transatlantic flight — but recently received a $300 million renovation as well, complete with a luxury wing including a new Neiman Marcus. According to Green Street Advisors, Roosevelt Field mall, which is about 2.4 million square feet, generates nearly $1,000 in annual retail sales per square foot, which is more than double the average of malls across the country.
As Simon continues to lead in the mall space, experts say the business will show the country how the American mall will evolve to thrive: a recipe of unique, technology and pampering-related retailers. It won’t just be basic mall stores, but rather medical clinics via Walgreens or CVS may move in, along with gyms and other fitness facilities. Dry cleaners may also find their place next to those clothing stores. There will be more luxury stores, but not completely, as Simon knows that these malls need to offer a variety of options to make every shopper have a reason to come to the location.
But Simon isn’t going to oversee all malls. It can’t and has no intention to.
So what will happen to those malls that are not getting love from consumers? Experts say they’ll get repurposed, and some already have. Some former malls are now office and even medical spaces. Experts say they may be turned into warehouse-type locations for online retailers like Amazon.
“There is no need to window-shop or go to 12 different stores if they’ve already researched online,” D.J. Busch at Green Street told Fortune.
Researchers say for every 100 Americans, there are nearly 2,400 square feet of space in shopping centers and, between 1960 and 2000, hundreds of malls built each decade. That’s contrasted with the fact that since 2010, only nine new malls were constructed. The ones that thrive, however, are the ones that are in areas of the country that can already support at least five malls, according to experts.
So while online retail expands, some of the American malls are in trouble. But if Simon owns the mall, it’s likely one proving that the overall concept of the American mall is staying put, just evolving to a tech-focused destination.