More Empty Space at the Mall; Life Gets Harder for Bored Teens « The Washington Independent
The bursting of the retail bubble that we discussed on Monday continues, and at a faster pace than expected. Mall vacancies reached a 10-year high in the fourth quarter of last year, Bloomberg reports. Things are only expected to get worse, according to research firm Reis Inc.
Regional mall vacancies rose to 7.1 percent last quarter from 6.6 percent in the third quarter. It was the highest vacancy rate since Reis began tracking regional malls in 2000, as well as the largest quarter-to-quarter jump in vacancies, according to New York-based Reis. More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc. and Sharper Image Corp., filed for bankruptcy protection in 2008 as the credit squeeze and recession drained sales. Vacancies will rise further until the job market recovers, housing prices stabilize and lending resumes, restoring consumer confidence, said Reis.
You could rent “Clueless” these days and it would seem like a period piece. Empty stores at the mall also have a psychological effect – any shopper can see that things look bad, and that may make them leery of spending. Given the increase in consumer spending of the past two decades, that is probably a good thing in the long term. Plenty of people with too much credit card debt could stand a few more empty stores.
It’s true the recession might not go away anytime soon if we (wisely) choose not to spend our way out of it. But then we won’t have double-digit interest payments on our debt, either. The other upside would be that malls might lose their status as the place for pre-teens to hang out, thereby chipping away at the gloss of the shopping gods. There might not be a lot of pleasant memories to come from this economic downturn, but saying goodbye to the mall culture as a permanent fixture in young lives could be the rare bright spot.