Worcester Business Journal

14 Worcester Business Journal | June 26, 2017 | wbjournal.com F O C U S E N T R E P R E N E U R S & I N N O V A T I O N As retailers close and new competition arrives, the Greendale Mall relies on nearby residents National retail store closures This year is projected to be the worst year this millenium for retail store closures, the main lifeblood to fill mall vacancies. *Projected based on year-to-date rate Source: Credit Suisse BY GRANT WELKER Worcester Business Journal Digital Editor J anga Samal, an employee at Bling Bling Fashion, got up from his chair where he was putting blous- es on hangers to be displayed. No customers were in the store, but he wanted to show just how slow the day had been. "Look," he said. A receipt showed the day's total revenue: $45.92. One sale was made, but also a return. "It's like that every day," Samal said. Bling Bling Fashion, a Greendale Mall store selling mostly women's cloth- ing and accessories, is not alone. The Worcester mall is emptier than ever; and as retailers across the country are expected to close thousands of locations this year, Greendale may need an unlikely rebound to avoid becoming another mall that couldn't make it through the online shopping trend. The mall has survived so far, but it's hard to argue it's thriving a year after it was bought out of foreclosure auction. Of its 44 storefronts, including anchor stores and the food court, 19 will be vacant with the closure of the clothing store Rue21 and Payless ShoeSource. More than 50,000 square feet of retail space will be dark. A new low for retailers Most days, just about all a Greendale shopper would hear is the echoing sound of loudspeaker music and the dinging of arcade games at Wow Family Entertainment. Escalators to the food court and DSW are out of order. Store signs of retailers that didn't make it remain, from Aeropostale to Dollar N Things, as odd reminders of what was once there. The mall's website even seems to address the surprising nature of the property still operating, saying "Yes, We Are Open!" Shopping malls practically anywhere are facing increasingly difficult chal- lenges, from online retailers, changing consumer habits and rising property costs. This year could mark a new low for retailers — even worse than the Great Recession. Global financial firm Credit Suisse has projected more than 8,000 retail locations will close this year, about four times as many as last year and far surpassing the roughly 6,000 in 2008. For malls and shopping plazas any- where, there are simply fewer ten- ants to go around. Retailers have already announced hundreds of planned closures this year. When struggling retailers have decided to close stores, they've often cho- sen their Greendale Mall locations, including American Eagle and GameStop. Rue 21 and Payless ShoeSource are closing their Greendale Mall stores among about 400 others each is shuttering. Avoiding the Galleria's fate One only needs to look about three miles south to downtown Worcester to see a mall whose useful life had ended. Worcester Center Galleria opened in 1971, the same year as Auburn Mall, but suffered in its later years as an outlet store center and closed in 2006. The roughly 25,000-square-foot Greendale Mall has so far avoided the same fate. It was a year ago this month the bank owning the property bought it out of foreclosure auction for $11.8 mil- lion after owner Simon Property Group defaulted on a loan. Only a decade prior, the property was valued at $65 million. KeyPoint Partners, the leasing agent for the mall, did not return messages seeking comment. "I hate to be pessimistic about this because I think the city is doing well," said Robert Baumann, an economics professor at College of the Holy Cross, and one of several experts who expressed hesitancy the mall could have a strong future without a major invest- ment. "I'm just not optimistic about that industry." Malls destroyed by other malls Even though the pervasive assump- tion is shopping malls have been hurt most by online retailing, that isn't neces- sarily the case. Competition from other malls was found to be the most common reason that malls went belly up, according to Wells Fargo Securities, which reported this spring malls built from the 1970s to the 1990s were overtaken by more mod- ern shopping centers with better ameni- ties. Older malls were pushed down the shopping hierarchy, and a tipping point often came when a key anchor closed. Greendale Mall has survived at least in part, store workers said, on a reliance on residents from surrounding streets, many of them immigrants, who may 0 2,000 4,000 6,000 8,000 10,000 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17* 4,475 4,163 8,640 Store closures Robert Baumann, economics professor, Holy Cross The Greendale Mall is more than one year removed from its foreclo- sure auction, but a high vacancy rate still plagues the shopping center. Finding a way to survive P H O T O S / G R A N T W E L K E R

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