A Failing Anchor Sinks All Mall Businesses

"The rise of online shopping and changing consumer habits are battering the big department stores known as anchors that once lured shoppers to malls—leaving landlords with empty space and forcing them to undertake expensive overhauls to stay relevant," according to an article by Liam Pleven.

"Macy’s, which reported a 31% decline in fourth-quarter earnings on Tuesday, in January said it would be closing nearly 40 locations. Sears Holdings Corp. and J.C. Penney Co., which report fourth-quarter earnings later this week, also are closing stores," adds Pleven.

In total, report Pleven, anchor stores, like the department stores listed above, are experiencing a great contraction of the foot traffic necessary to drive sales: "Department-store chains would need to close about 500 stores—equal to about 15% of all anchor space at U.S. malls—to generate as much sales a square foot as they did in 2006, according to a recent report from Green Street Advisors, a real-estate research firm."

The article begins with an anecdote from the Ridgmar Mall in Fort Worth in Texas and concludes by examining the effect of anchor closures on the business model of malls there and elsewhere around the country.