Chapel Hill Mall will lose its Sears store by spring, or a year after Macy’s, another of its anchor stores, closed down. The shuttering presents challenges for the Kohan Retail Investment Group, which purchased Chapel Hill last summer, and for the mayors of the surrounding cities, Akron, Cuyahoga Falls and Tallmadge. Worth emphasis is that the trouble for malls and department stores is national in scope.
The ways we buy things are changing dramatically and at a faster pace. For decades, the model worked successfully. Department stores served as the primary attraction to malls, drawing shoppers, smaller retailers setting up shops nearby to catch their share of consumers.
Department stores proved a strong enough presence that mall owners would keep them happy by, among other things, charging reduced rent. Then, Walmart, Target and the likes of T.J. Maxx enhanced their presence elsewhere, followed by shopping via the internet, Amazon, notably, becoming a big player. Separate brands now invite shopping online.
As a result, Macy’s and the others have watched their clout diminish. Shoppers have headed for other destinations. Online sales amounted to 8 percent of overall retail activity last year. That may not seem like a significant share, revealing, as analysts have noted, how department stores, not unlike many other businesses, must straddle to two worlds, cyber and traditional. Actually, the online share applies pressure at the margins for companies with expectations of annual growth.
The Sears announcement involved closing 26 stores nationwide, part of nearly 200 shutting down since 2010. Macy’s joined Sears this month in saying its plans call for eliminating more than 10,000 jobs and closing 68 stores, also nearly 200 in all the past six years.
Kohan Retail Investment Group specializes in distressed malls. Mike Kohan told Jim Mackinnon and Marilyn Miller, Beacon Journal staff writers, that he provided free rent to Sears at another location, and the closing soon happened, anyway. Department stores are seeking to strike back against others carving off pieces of their business, say, a Sephora in beauty products, or a fast-fashion outlet such as H&M. Macy’s Backstage, a discount version, will add stores this year. Macy’s and other department stores will expand online shopping, too.
Meanwhile, malls, and local economies, must adapt to the changing market. Perhaps there is promise in recycling portions of department stores. What adds to the difficulty is that not only is retail overbuilt in many locations. This is happening across the country, suggesting a trend all the more formidable for one community.
Consider also that malls serving more affluent consumers are performing much better, mirroring the income inequality divide in the larger economy. True, too, is that successful reclamations of troubled malls largely have taken place in high-growth areas.
Which leaves Dan Horrigan, the Akron mayor, and his colleagues Don Walters in the Falls and David Kline in Tallmadge, hoping Kohan Retail arrives at ways to sustain Chapel Hill. Horrigan, in particular, doesn’t want to see another shambles such as the Mad Max-like Rolling Acres Mall. The best he can do is develop a broader and productive economic development strategy around the priority he has set — boost the city’s population, enhancing its neighborhoods, making Akron a place where young families, especially, want to live, work and stay.