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The Randall Park Mall in Ohio was once the world’s largest, with two million square feet. It has ben rotting down since 2009. (Photo by Nicholas Eckhart/Flickr)
The Masters of the Universe like to talk about our “consumer economy,” as if we have discovered the equivalent of the perpetual motion machine: an economy that can prosper while consuming, without having to produce anything except fast food and loan documents. Such an economy has the future of a snake that has swallowed its own tail — that full feeling is not going to last. Such an economy is not a “consumer” economy — that is almost an oxymoron — but a consumptive economy, which is to say one suffering from a wasting disease.
People trapped in a burning building don’t spend much time worrying about whether they have a wasting disease. So it’s understandable that with the American oil revolution imploding and the stock market reeling drunkenly along the edge of a cliff, not much attention is being paid to the spreading dry rot of ordinary American retail business. Still, it’s there.
Familiar brands, friendly to and beloved of the American middle class, are going the way of — well, the way of the American middle class: Sears. J.C. Penney, Kohls, Radio Shack, Target, and many more — are announcing store closings and layoffs on a regular basis. Sears, perhaps the most iconic, lost $300 million last year and is accelerating its store closings, with 235 now on the chopping block. Masters of the Universe immediately brightened to bullish on Sears because of all the real estate the company now has for sale (remember the thing about the snake, and the full feeling not lasting? Or the guy who is burning the siding from his house in his fireplace to stay warm?).
This wasting disease does not affect only the elderly. Preppy young things such as Wet Seal (teen clothes – bankrupt, 338 stores dark, 3,700 laid off), C. Wonder (preppy stuff, gone, 11 stores), and Aeropostale (75 stores closed, 75 more doomed) are sinking to their knees. Target — okay, more middle-aged than preppy, now — just closed all 133 stores in Canada and laid off 17,000 people. (For a list of all the US stores whose closings in 2015 have so far been announced, go here.)
In addition, the country is becoming littered with closed and rotting shopping centers — abandoned cathedrals of the Consumer Church of America. Once the acme of civilized middle class life, the cultural center-of-mass for two generations, malls are creatures of suburbia, and proliferated with it after World War II. Once built at a rate of 100 per week, there hasn’t been a major new one built in America since 2006. Those that remain have become increasingly irrelevant — and insolvent.
Veteran retail consultant Howard Davidowitz expects as many as half of America’s 1,000 or so malls to fail within 15 to 20 years. He predicts that only the 400 upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive. But midmarket malls, he says, are “going, going, gone.”
What is the reason for what is becoming a mass extinction? Did Internet online sales strike like an asteroid and suck all the oxygen out of big box stores? Well, the Internet accounts for about 13% of retail sales now, hardly a crippling blow. Is it, then, a mass migration of people from the suburbs to the center cities, leaving the malls stranded in a depopulated wasteland? Hardly. A sudden, massive change in tastes? No, that’s not it.
Consultant Davidowitz knows the answer. “This isn’t rocket science,” he says. “What’s going on is the customers don’t have the fucking money.”
Oh.
Geez, Mr. Lewis – you may as well be channeling my thoughts lately.
Not only have i sent all my (paltry) stocks to liquidity in the last week, but the fact that retail America is imploding and rotting in place has been a constant carp of mine since the masters of the universe played the stingy card and decided not to give raises to anyone for a while (10 years and counting). i used to remark on practically a daily basis on the vacant stores, the rotting, old, closed and abandoned restaurants, the land for sale for so long the locations need new signage, as the existing ones look as bad as the ignored acreage, and the real hoot, the COMING SOON signs that have been there so long that their message is a constant reminder to anyone driving past that “soon” may never actually arrive.
i did this for so long my wife threatened to not cook for me if i brought it up again or added to it. Now, it’s okay if SHE notices a newly closed establishment, but she doesn’t want to hear about it afterward (like a year later) because it’s too depressing. i leave it at “you’re in for a rude awakening sweetheart.”
Great quote to end the piece too, Tom. i asked the question aloud, many times:
“How [“the f*&#” ]are all these businesses supposed to exist if there’s no money to spend on them?” Davidowitz nails the answer. It used to be we couldn’t afford “the luxuries.” That pared down to shopping only for the necessities. Now, we’re starving, rationing our money to pay the bills, living paycheck to paycheck, and are slowly drowning in debt like being stuck in a sinkhole [you think you finally may have a leg up and your car breaks down or the water heater takes a shit on ya]. People used to take pride improving their homes, now we’re lucky if we can afford to paint a room. Things are breaking down and not being repaired too, but abandoned and left until “i’ll get to it soon.”
As more and more of the former middle class find themselves firmly in the ranks of the working poor, and still sinking, the dawn of the idea that the whole worldview of consumerism that we’ve been indoctrinated with is complete bullshit and that we’ve all been summarily HAD will be the beginning of the next reign of chaos as people default, their communities go bankrupt, and the dominoes continue to fall outward to their tax bases, municipalities, and states. The money system and the economy are going to seize up like a machine with no oil before long.
Then they BIG PLAYAS can say “We WON!” But THEN what?
Malls still exist… unlicensed strip malls. Haven’t you ever seen them in low rent areas? They don’t have much to spend on looking fancy like Aeropostale, but they go all out on iron bars to protect the windows from being broken.
The death of the mall is part of the “coming apart” of America. People still need to buy clothing and consume, but only the elites can afford nice things now, and the elites have always been critical of malls. The poor can no longer afford mall products and will have to make do with their strip malls.
Mr. Lewis, I am bemused by your inclusion of a photo of Randall Park Mall. I was there ONCE, over a decade ago (it’s “east side” and I’m “far west side”), and it was a sight to behold. Apparently, no more. Yet, this is an affliction, as you’ve duly noted, affecting every shopping center across this country and, perhaps, a few others. Given this obvious fact, how many ask themselves, “What were we thinking?“? Do YOU think that “we,” as individuals or as a species, have EVER given much thought to anything? If so, “When and how so?” I’ll grant that there have been a few that believed, probably rightly so, that they could control and/or influence the behavior of the masses for their own exclusively personal gain. How do YOU think that “we,” as individuals and as a “society,” will react/respond as the symptoms you elucidate continue to propagate?
@ the other Tom, if your “sweetheart” ever refuses to cook for you, you are most certainly welcome at my house, as is Mr. Lewis, for meals you will not want to forget, despite their “simplicity.” :)
I think that some of us are going to get over the sickness of making cash the highest human value; I think that some of us are going to rediscover the glue that once held human culture together, the bonds of family, community and reverence for the land. I think that those of us who do this have a shot. Otherwise, not a chance.
I concur wholeheartedly “that some of us are going to get over the sickness of making cash the highest human value” and “are going to rediscover the glue that once held human culture together.” However, I still wonder if there will be a sufficient number adopting that paradigm soon enough to have ANY effect. I am certain “humans” are facing unprecedented challenges ecologically, economically and culturally on a truly global scale which revolve around energy and material production and consumption and, hardly least, ingrained and programmed beliefs and perceptions of how things are and should be, especially in OECD countries. I have very strong doubts that the necessary changes will, or even can, occur in a effectual time-frame. While it is apparent that you, Mr. Lewis, and other commentators and bloggers here and elsewhere are already striving to exhibit and foster the new thinking, I see at least an order of magnitude more people not only continuing as usual but exacerbating the causes that have precipitated the 6th mass extinction event. I really do hope that I am wrong, despite my misanthropic tendency, but I think the final, succinct sentence in your comment (above) sums up the situation astutely.
Good analysis, and we’re not done yet. The effects recession that will be caused from oilfield layoffs has yet to be felt, and that will cause another round of contractions. Davidowitz has it right and makes your point, although let’s not overlook the Amazonification of the retail economy. I believe your 13%, and think that the death of retail will further goose that number significantly.
As much as I loathe the way Amazon treats its workers, I frequently use it on account of the fact that it’s a major pain in the butt getting around a major city on public transit, let alone public transit that has been subjected to many cuts over the years. (Seriously, county bus service almost always seems to be the first thing they put up on the chopping block in Milwaukee County. It’s freaking depressing.)
Here in Singapore where I live the malls are still largely as busy and heavily air-conditioned as ever, as far as I can tell. (A couple of my favorite book retail chains have ceased to exist, though.) But one reckons it’s merely because Singapore happens to be situated at one of the high points of the sinking ship…
I said it before here at The Daily Impact but I’ll say it again: if the human race makes it, our remote descendants will look at the whole edifice of modern economics the same way WE look at Aztec mythology.