Some former titans of shopping are coping with vacant storefronts
From shuttered storefronts to near-empty corridors, hard times have hit some of the region's largest shopping malls.
Once the pillars of local consumerism, malls from Frazer to Monroeville to West Mifflin are struggling with vacancies as the nation's deepening recession takes its toll on retailers and shopper confidence.
At Century III Mall, one wing of the sprawling West Mifflin complex is nearly empty because of an exodus of stores. By a Pittsburgh Post-Gazette count, more than 30 storefronts are empty.
In Frazer, the Galleria at Pittsburgh Mills is coping with some 37 vacancies, as the huge ranch-style mall continues to struggle to find a niche since its opening in 2005.
And in the east suburbs, Monroeville Mall, where the 1978 cult classic "Dawn of the Dead" was filmed, finds itself amidst a real-life retail horror story, with roughly 20 empty storefronts by the newspaper's count.
Some local malls are bucking the climate, most notably Ross Park Mall, which has become an upscale mecca with stores like Nordstrom, Tiffany's, Michael Kors and L.L. Bean. But even it isn't immune. About a dozen stores were vacant during a recent visit, although new tenants have been named for six of them.
Experts say it's no surprise that area malls are taking it on the chin, with retail sales slumping nationwide and big-name chains such as Circuit City, Boscov's, KB Toys and Steve & Barry's going bankrupt.
"It's a tough environment for anybody serving consumers," said George Whalin, chief executive officer of Retail Management Consultants near San Diego.
Nor are the struggles limited to the Pittsburgh region. Erin Hershkowitz, spokeswoman for the New York-based International Council of Shopping Centers, said malls throughout the country are grappling with similar issues.
"People are afraid of losing their jobs as unemployment is on the rise. People are losing their homes. This certainly is going to have an impact on malls," she said. "There are just a lot of consumers who are unable to spend like they used to."
It could get worse before it gets better. The shopping center group reported earlier this month that chain-store sales were down 1.6 percent in January compared to the same month in 2008. It is predicting sales in February will fall one to two percent.
Too many stores, too much spending
The gloomy retail climate prompted one expert, Burt P. Flickinger III, managing director of SRG Insights, to predict 2,000 to 3,000 shopping malls and shopping centers nationwide could go belly-up this year.
He also estimates 200,000 retail stores and restaurants will file for bankruptcy in 2009, about 70,000 more than average.
"With consumer credit being cut and so many people being laid off, shoppers just don't have sufficient spending power for all the new shopping centers and shopping malls and retailers to produce a profit," he said.
Mr. Flickinger blames the industry crisis on a combination of factors, from overbuilding by developers to overspending by consumers. Last year, he said, it came home to roost.
"After 25 years of overspending and 25 years of overbuilding, retail went into the tank," he said.
Mr. Flickinger believes the retail industry is about 400 days into a 1,000-day recession. He doesn't expect things to bottom out until next year before a "good bounce back" in 2011.
As far as recessions go, "This will be the worst one in nearly 70 years," he said.
One recent survey found 40 percent of the people who redeemed gift cards at Wal-Mart did so for groceries.
"People can't afford the basics, so shoppers aren't buying discretionary items," he said.
That's not good news for shopping malls and the plethora of specialty retailers in them. Ms. Hershkowitz said specialty apparel spending is down significantly, along with luxury and department store buying.
Les Morris, a spokesman for Indianapolis-based Simon Property Group, said the occupancy rate at that company's 164 malls has slipped from 93.5 percent to 92.4 percent -- still "pretty healthy" but also an indication of the retail slump.
"It's a harder environment out there, no question about it," he said. Simon owns Ross Park, South Hills Village and Century III malls.
