U.S. Markets close in 6 hrs 22 mins

The death of malls is going to reshape the teen experience in America

Myles Udland
Markets Reporter

Clichés are clichés because they are true.

And one of the dominant clichés about teen socialization in the US is that the local mall is the center of the universe.

But recent reports have made clear that malls in America, and in particular the anchor stores that brought these malls into existence, are dying. And these closures stand to completely reshape the teen experience in the US.

This week, both Sears (SHLD) and Macy’s (M) announced they would close stores across the country.

On Wednesday, Macy’s announced it would close 68 stores, resulting in the loss of 6,200 jobs across the company. Sears said in a statement on Thursday it would close 150 stores, including 41 Sears locations and 109 Kmarts. The company did not specify how many jobs would be lost along with the closures.

REUTERS/Jim Young

In December, Business Insider’s Hayley Peterson wrote that a wave of store closures was about to hit American retail. And while some of the Macy’s and Sears closures announced over the last 48 hours were previously telegraphed by the company, many of these closures are new. The wave of closures, in other words, is here. And this trend seems unlikely to end soon.

In a December 2015 report, real estate consultant JLL (JLLnoted that at the time, the US had six times more retail square feet per person that the UK, with 2,375 square feet per 100 inhabitants. The firm added that this was more space than France, Denmark, Finland, Portugal, Spain, Italy, and Germany combined. 

Peterson also cited figures from Morningstar that showed the US had 23.5 square feet of retail per person compared to 16.4 and 11.1 square feet per person in Canada and Australia, respectively, the two countries with the next-highest per capita retail space.

And so taken together, these figures make clear that more closures are coming to the retail sector as the shift to online shopping and the over-saturation of America’s retail footprint provide a one-two punch to the sector.

The red line shows the increasing percentage of e-commerce sales in total US retail sales while department store sales steadily drop as part of the total. Source: FRED

But the additional upshot of the closure of stores like Sears and Macy’s is that these aren’t typically downtown-type stores, but the anchor tenants in malls across the country. The dominance of Macy’s and Sears — among other stores like Kmart or higher-end retailers like Bloomingdale’s, Saks Fifth Avenue, and Nordstrom (JWN) — came alongside the advent of the US mall.

And from this network of growing malls brought to life by movie theaters and major department store retailers grew the common space at which American teens congregated to waste time, as captured in this classic scene from the 2004 movie “Mean Girls.”

Malls provide many communities with a climate-controlled, central location for parents to dump their pre-teen and teenaged kids to roam and enjoy the first outlines of something like freedom. The mere presence of likely-unemployed middle school or high school students does not, however, lead to sales.

For while parents might spend money at stores their kids find trendy — look at the rise and then struggles of retailers like Abercrombie & Fitch (ANF), American Eagle (AEO), and Aeropostale, among others — these teenaged roamers filling the common spaces of American malls are not core customers. And as other US consumption habits shift online and away from mall-based department stores, the free space for America’s teens to hang disappears.

But it is this loitering around the commerce spaces of America that, for many kids, is a defining part of the childhood effort to fight off boredom and make friends.

In 2017, many would argue the internet, and particularly communal online spaces like Snapchat groupchats, GroupMe text messages, and multi-player online games, serve as substitutes for the mall. And the demise of malls has, in some communities, certainly already put out of existence the mall-as-common-space for teenaged residents.

But the acceleration of this decline will, in time, likely put hanging out at the mall out of reach as one of the core, shared coming-of-age time wasters for American youths.

And that’s just as big of a cultural shift as changes in how we shop.

Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland

Read more from Myles: