Tuesday, March 31, 2009

Dead Mall Serves as Film Set

The new movie Observe and Report was filmed in a dead mall, according to joblo.com. From the description, it sounds like a classic dead mall scenario:
"Interestingly enough, the mall is not completely abandoned since there are still three stores that remain open on either side of the mall. This means the inside of the mall is still open to the public and has become the local 'hangout' for elderly mall-walkers."
At least someone has a use for dead malls, huh? Mall developers nationwide should begin petitioning the movie industry to make use of their near-abandoned but still-interesting spaces. At least, until the movie industry collapses, as it inevitably will.

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Monday, March 30, 2009

"Satisfaction Guaranteed" is now "Satisfaction Per Our Discretion"

Having been around the world of retail for awhile, I have been able to follow some of the patterns that develop in the store management world. Managers are there for one thing - to manage and make sure the money is coming in. Anything that prevents the money coming in, no matter how small, needs to be taken out of the picture. Here's the thing though. Some of their choices aren't the best outcome. Take this for example: A customer comes in wanting a pack of batteries. The batteries ring up at 9.99. The customer says they are on the shelf for 5.99. They want the price changed. Before the cashier can do that, they must call a manager to verify the change. The manager reviews the situation, and denies the customer the price change. So then the customer walks out, not purchasing the item. Wouldn't it make more sense to sell the item at 4 to 5 dollars cheaper than not make anything off it at all? You would think so, but no. It looks better on paper for them to not sell it then sell it at a loss. I personally would think that it would be better to sell it for a certain amount than nothing at all. You make at least part of the money, the customer is happy, and they are more likely to come back. If you deny them the sale, they are less likely to come back to purchase other items they need. In the short-term it might not seem like a big deal, but if the occurence happens more and more, and not just for prices, for anything of the sort that requires management intervention, the long-term effect would pan out to bad business.

Speaking of bad business, it can be blamed in part on micromanaging. More an more it seems, managers are all about the numbers. It has always been about the numbers, though. The thing that has changed is the sense of pride. Pride for the company, pride for the employees, and pride for the customer. Pride has all but vanished. Numbers have reached the forefront. Here's the problem though. Management's ever increasing and changing policies turn people away due to hassle and the lack of feeling support or understanding(remember the old term that seems to be disappearing "Satisfaction Guaranteed or your money back"). This leads to people not coming into the store, which leads to management cutting back hours due to lack of incoming funds to justify paying employees, which leads to lack of employees to help customers and to help upkeep the store, which leads to people not coming to the store because it is dirty, cluttered, and there is no help, and the cycle goes on and on.

Another factor to speak of deals with managers and employee relations. Managers of old would help work with the staff, encourage and praise them, and help the store succeed and move in the right direction. Looking at present day managers, not all, but most are young, inexperienced, sit around their office, not coming out to help short-handed staff, and pretending to know everything there is to know about managing a store, when in fact they have much to learn. They talk down to their employees like they are nothing, and overall decrease morale around the store, which also affects business. Of course, this negative energy flows down the chain of command. The managers' managers reign terror on them, then they do it to the low end employees, and then it spreads out to where the sales happen. A person who is constantly being hassled and discouraged is not going to be able to put his or her best effort forward in completing a sale.

So to reiterate, micromanaging can be a downfall and could be one of the factors for the closure of other major corporations around the country. Management not paying attention to how policies, which are deemed to be in good interest at the start, can have a negative affect on cosumer's wants and needs. Managers who don't appreciate the work that employees accomplish. Managers who don't know how to be managers. Maybe you have seen the pattern I speak of. Maybe not. Maybe you'll start to notice :) Either way, it's out there, and it affects us all.

Kunstler Today: "America’s Standard of Living has to Be Reduced by 20 to 50 Percent."

In his regular Monday morning essay, James Howard Kunstler says America will reduce its standard of living by as much as 50 percent, whether it likes it or not:
"The lowering of living standards by 20 to 50 percent essentially eliminates all but the must critical commerce, meaning that most of the stores in the malls and strip malls lose their customers and shed employees, while the mall and strip mall owners lose their rents, and the bankers lose performing commercial real estate loans. As all this occurs, tax revenues go way down, schools can’t pay their employees or buy diesel fuel for their yellow bus fleets. More people lose the ability to carry health insurance. Hospital emergency rooms are overwhelmed. Health care descends to Third World levels."
Much more at Kunstler's blog.

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Chicago-Based Mall Developer is $30B in Debt

The Washington Post has details on how General Growth is trying to avoid bankruptcy. The paper notes that if the company fails -- and it seems almost impossible that it won't -- it "would be among the largest real estate downfalls in U.S. history."

The developer has malls in almost every state and has been in business for half a century.

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Earth Hour as Observed by a Shopping Mall

This one kind of says it all. On Flickr.


Saturday, March 28, 2009

"Is the Economy Killing the Shopping Mall?"

This is the question posed today at The Moderate Voice.


Dead Malls are the Canary in the Coal Mine of the Economy

A new department store opens in your town. Nothing like it existed before. It stands alone for many years and prospers, selling a mixed variety of goods and services to cater to its local populace.

Another investor sees the profitability to be had by a store of this type and decides to open their own department store in the same town. It flourishes and causes the original store to flutter. The original store panics, and is now forced to reinvent itself to be like more the new store, if not better than. It spends money and adds departments and more services, and the tug of war continues.

Either one of these stores, at some point, finds that it's not worth continuing to pump money into versus the overall value of their store, and gives up. They let the store decay to the point where shoppers don't feel safe or limit inventory and selection, until finally announcing closure.

But why would the owner choose death? Another anecdote.

I own a 1985 Chevrolet Caprice. It was my first car, and I loved that car. When I got it, it was ten years old. A used car, but in decent enough shape. No warranty.

As things went wrong, as with all cars when driven regularly, I spent the necessary funds to keep my beloved chariot in motion. But I never spent more than absolutely necessary; no wasteful spending.

Fast forward, five years later and I am older, and money is tight. There are many more miles on the odometer and something major breaks. My choices are to cut my loss and junk the car, or take a chance and fix it, ever so tightly keeping my fingers crossed that something else doesn't break. I take a chance because I still think the life that remains is worth the investment.

A year later brings with it another problem, and another decision. I love the car too much to get rid of it, so I fix it again, and lose out even more. Its okay though because I know what I will get out of this is more profitable transportation. But...I don't.

Now, I'm caught in the middle. I don't have enough for a new car, but don't want to use what little I have to fix this one. At some point, we all have to decide which option is more economically viable and profitable. So this time, what do I do?

I go and buy second car! This new car is awesome. I still love my old one, but I don't have to fix it up as spic-and-span as before because I'm not relying on it as much. Years pass, and now this car is dying. I try to use the original one, but it is unreliable. The new one is also now unreliable. What do I do now?

These are the same practices, and questions mall owners face on a regular basis.

Malls all over the U.S. are now closing for the same reason I had to consider getting rid of my cars, and the same reason department stores, jewelry stores, restaurants, and banks have to close: negative equity.

A Dead Mall is just a store that's going out of business because it can't compete, does not want to take a chance where the end result would be losing its fight, or the owner gets greedy and cashes out.

That's all a mall is: a store that is competing for your business. It is not a communal center, it's private property. It's a store that sells stores. A specific chain within a mall is just a product sold at the store, but like most products, it can be sold in other stores. And it may sell better at the newer, more popular store. "Products" leave dying malls and go to live ones. Or, they leave because the free market drives them out. People don't like the product, and don't buy it anymore. Whatever the reason, less product means less traffic. Less traffic causes other "products" to pull themselves from the store, eventually leading to a store that can't offer you very much selection.

Just like T.G.I.Friday's that has been eclipsed by Chili's, Flingers, or Chotchskis, or another T.G.I.Friday's, the mall of yesteryear failed to reinvent itself, or, did not want to. There simply was too much competition and not enough value and enticing variety, or interest by its owner to make it worth the investment.

Many malls ended up in the hands of wealthy real-estate investors. An investor in the game simply to make a quick buck is the one who bails on their mall as soon as possible if they don't have the latest and greatest winning formula for a mall. They walk away with their pockets full, and the community is stuck with a shell of a building and a lot of unemployed people. They don't care about the long term impact of their investment when it goes bad.

Investors artificially boosted our economy into the stratosphere with a super-sized slingshot that perhaps they did not care to understand, or did but didn't care about the consequences, and now we're all facing the harsh reality of the physics of gravity. Large firms and banks spent years spending money on projects that lose money in the grand scheme. They kept bailing themselves out and painting pretty pictures, then reached a breaking point so big they couldn't continue. The stores they shop at succumb to the same practice! It started small, and has made its way up the monetary food chain.

We despise the practice of spending money we don't have, so how can the government give all this money to irresponsible companies that, if truly in a capitalist open free-market, would have failed a long time ago? And, logically, that makes the federal government just as irresponsible as the companies they're trying to save.

In addition to bailing out banks, auto makers, and in that mix surely companies that own and develop malls, each state government is receiving money to spend on "shovel-ready" projects that are meant to bolster the economy.

In particular, I read a disturbing article regarding one of New York State's plans for their share. Since driving and highways are a hobby of mine, the fact that this can tie into my pastime and the history of retail and malls only makes me more ticked that I have to live in this state of decline.

New York is going to take millions of dollars of its stimulus money to improve handicap access to its existing Upstate New York train stations.

Let me tell you about our train service. The train station is ten miles from downtown. It's only served by Amtrak, which costs a small fortune to utilize, and takes hours longer than driving a vehicle to the locations it serves. Our tracks are extremely antiquated and cannot support high-speed rail travel on much of their length, and is not directly connected to the state's major cities. If only I could hop on a train in Glens Falls and get a fast trip to Rochester or Binghamton, I would most certainly take advantage of it. There is no commuter service in our small towns, and most cities... and there will never be.

A new interstate has not been constructed in New York since the early 1980s. While improvements to existing rail lines are part of this package, no mention has ever been made of building new rail lines, or highways. Money is being pumped into an archaic and outmoded system. New York's roadways and bridges are crumbling, its rail system inconvenient and overpriced, and neither have any redundancy. Parts of the interstate system that were on the original drawing board were never completed, and the communities they would have served suffer today as a result.

New York adamantly refuses to spend money on new infrastructure. This is the other spin on a dying mall - the lone mall that has been allowed to crumble to disrepair. Its the department store above, but that never got competition, and never improved. Profits were pocketed and not reinvested into the business.

States can be compared to stores that sell themselves to their citizens. New York would be out of business if not for its parent company bailing it out on a regular basis. The coffers are always empty, but when money does come in, it goes right to projects that remind you why we're in such a dire strait. There are some other states do think ahead, and are building new roads and rails, creating new opportunities for communities. They find ways to raise positive equity... as should all stores, whether the novelty store, jewelry store, department store, malls, state, and federal governments. They don't rely on loans, and they shouldn't, because as we've learned, there is no guarantee.


The system we are all stuck in has been built up so large that there doesn't seem to be any easy way to fix it.

It's a loose comparison between malls owners, corporations, and the government corporations that are supposed to spend our money in our best interest. Spending decisions have been and continue to be made with little or no basis on the long term impact on the property, its effectiveness, or its people at the heart of the operation. One mall is left to ruin, either alone or having been replaced by another, just sitting to rot. An infrastructure is ignored while money is pumped into the bureaucracy, and when an opportunity to expand is presented, money must be spent to rebuild the original, failing system that if planned correctly in the first place, wouldn't need it.

Chain goes out of business, malls close, banks close, states suffer, people suffer, and money still doesn't grow on trees.

Welcome to the world: the next dead mall.

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Kunstler Tells Aspen Conference "It's Basically Over."

The Aspen Times seems a bit astonished by author James Howard Kunstler's message, delivered yesterday at the Aspen Environment Forum:
We really can’t restart the consumer credit thing. Even if the bank wanted to lend, we’re not going to lend more people money to buy more flat-screen TVs. It’s basically over.
You can read coverage of Kunstler's appearance at The Aspen Times.

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Time Photo Essay: Stores That Are No More

The haunting vista of deadmalls across America catches Time Magazine's attention in this excellent photo essay.

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Dying Mall Blamed for Closure of Utah's First T.G.I.Friday's

This article from Utah's Deseret News caught my eye because of the claim that "a slumping business environment surrounding [a] partially demolished shopping mall," is the reason that the first T.G.I.Friday's to open in Utah is shutting its doors.

No mention is made of America's overall "slumping environment," or the fact that a T.G.I.Friday's might fail to attract diners because their food is A., Overpriced and B., God-Awful. No reference is made, also, to the possibility that bad, overpriced restaurant chains shuttering their doors might actually be a good thing. In fact, the piece ends on the dubiously optimistic claim that "many [laid-off workers] will be rehired when the company opens a new T.G.I. Friday's location near Valley Fair Mall in August."

Hopefully Deseret News's intrepid editors will save this piece to copy and paste a year from now when the Valley Fair Mall's T.G.I.Friday's goes under.


Friday, March 27, 2009

"A Sense of Normalcy Should Return Soon."

"A sense of normalcy should return to the industry soon," a developer told a Las Vegas meeting of the International Council of Shopping Centers. In Business Las Vegas has a report on the event, which seemed infused with an optimism that doesn't seem altogether realistic, especially for a city like Las Vegas, which is one of the least well-positioned places in the United States to withstand the privations promised by the Long Emergency.


The Vanishing Shopping Mall

So what exactly happens when a mall vanishes?

This great article from The Week takes a look.

Thursday, March 26, 2009

What's in Store for the Suburban Mall?

That's the question asked in this exceptional article from The Daily Beast, written by Lee Eisenberg.

Deadmalls.com Prime Mover Brian Florence gets some virtual ink in the article, but with or without the "personable chap from Glens Falls, New York," it's a terrific piece on the end of the mall era. I liked Eisenberg's writing so much that I subscribed to his blog.

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Closing Stores Leave Ghosts Behind

Perhaps you've noticed as the economy has worsened, many extinct retail outlets are not being revived in some other form, as they would have been in years past.

In the boom years of the American economy, if a large retail store closed a location, it was typical for another, oftentimes similar retail chain to move into the space. Within the Deadmalls phenomenon, we've seen time and again once-prime retail space in shopping malls succeeded by dollar stores, shoddy magazine stands or even cut-rate churches.

The National League of Cities says the trend is changing. CNN has a report on their new survey that says over three-quarters of respondents to the poll said they've seen a decline in new retail start-ups.

In the short-term this will be devastating for communities all across the country, but long-term, it will be interesting how our evolving, downsized culture finds a way to use those spaces. If you've ever wondered what it would be like to live in a shopping mall or hold a farmer's market in a McDonald's, you may not have long to wait.


New Deadmalls.com Blog Contributor

Hi, I'm Alan David Doane, and for a long time I've been interested in issues of cultural decay and suburban sprawl, so it's very exciting to me to finally be a part of the Deadmalls blog.

By way of establishing my Deadmalls cred, let me point you to two interviews I have done with author James Howard Kunstler, one from 2000, and another, more recent (and timely) one from 2007.

Kunstler has been kind of my spirit guide as the entire world slowly slides into what he calls The Long Emergency, and he certainly saw our current and near-future state of affairs coming long before most other observers ever noticed we had any problems at all here in Los Estados Unidos.

When I am not writing about The End of the World, I write about comic books, my life, movies, TV and other subjects at The ADD Blog at Comic Book Galaxy. Feel free to have a gander at that if you're so inclined!

My thanks to Brian, Jack and Pete for having me aboard, and I hope I'll be able to provide some interesting links and commentary in my time here.

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Malls R Us

Deadmalls.com is prominently featured in a new documentary called "Malls R Us", that premiered last weekend (3/21/09) in New York City at the Museum of Modern Art. Being at the premiere and seeing us on the big screen was definitely an accomplishing moment!

The movie will be shown in Montreal this weekend. In the United States it is distributed by Icarus Films, and hopefully will be shown near you at some point, and eventually on television.

Myself, Jack Thomas, and Pete Blackbird took part in filming in June 2007 near Cleveland and Akron, Ohio. During the filming, we got some awesome interior shots of Randall Park and Rolling Acres malls, and on the ride home, Euclid Square Mall.

I will post a page with pics from the exciting event in the near future, including exclusive Deadmalls.com footage not shown in the film! And when the movie becomes available for sale on DVD, I will link it here as well.

'Malls R Us' is eye-opening, showing us the unfortunate fate of not only malls dying in the United States, but where the new ones are ending up, and the motivation behind their creation and the developer's drive for their project to be the biggest and best. Your perception of the shopping mall will not be the same after you see this!

-- Brian Florence, Deadmalls.com