MALLPOCALYPSE... The U.S. Retail Collapse of 2017

About three weeks ago, I wound up walking through this very place, Oak Hollow Mall in Highpoint, North Carolina.  It's about 15 miles from where I live, and I wandered by while my mom had a doctor's appointment in the area.  I was pretty stoked to find this video of its final hours.  My walk through this mall got me looking into the state of malls in the U.S., and what I found blew my mind.

As of today, March 24, 2017:

3,024 to 3,134 retail stores 
in the U.S. have closed in the last couple of years, are are now scheduled to close.  I didn't coin the term, but this is the Mallpocalypse if there ever was one. 

Here's a fairly comprehensive list stores either closed over the last couple of years, or scheduled to close this year.

Macy's- Scheduled to close 68 stores in 2017, about 3 already closed.  This will save the company an estimated $550 million.
Sears/Kmart- 150 combined stores closing
J.C. Penney- Closing 138 stores.  They tried to make a comeback a couple of years ago, it didn't work.
H H Gregg- Closing 88 stores, "bankruptcy rumors." 
Staples- Closing 70 stores

That's 514 large "anchor stores," closed or closing.  Those are the ones that used to be the main draws at malls and shopping centers.  When those stores close, it makes life much, MUCH harder for the rest of the stores in that mall or shopping center because less people come without the big stores there.

Walmart has closed 269 stores worldwide and 154 U.S. stores (Jan. 2016 article).  Walmarts don't anchor malls or shopping centers, they anchor whole areas or small towns.

Smaller size stores closed or closing:

Radio Shack- 552 stores closing, it filed bankruptcy (again!) in March 2017
Payless Shoe Source- 400 to 500 stores closing, said to be planning bankruptcy filing soon.
The Limited- closed all 250 stores.
Family Christian (bookstores)- closing 240 stores.
Wet Seal- closing 171 stores.
Crocs- closing 160 stores
BCBG- closing 120 stores.
Pac Sun-closed 110-120 stores, out of bankruptcy.
Aeropostale- Has closed 113 stores, into bankruptcy May 2016.
 American Apparel- closing 110 stores.
CVS- closing 70 stores.
Guess- closing 60 stores.
Kohl's- closed 19 stores last year as a test.  Now it's planning to shrink the size of 200 stores.  It already has 300 smaller size stores, out of 1,160 total.

This list has grown considerably in the last month, and I think it's safe to safe to say it will most likely grow in future weeks and months.

-multiple sources, but the best overall source is this recent article at Clark.com

What about the malls themselves?

I haven't found really good numbers yet, but there were about 1200 enclosed malls in the U.S. until recent years.  About 400 of those malls have closed or may close soon.  About another 400 of those malls are thought to be struggling.  The closure of all the stores above will tip the balance for many struggling malls, and likely cause lots more mall closures.  Most of these have been and will continue to be in smaller cities, towns, and more rural areas of the country.

The website deadmalls.com has over 743 "site updates" about different malls that have closed or are struggling.  Some of these are repeats of the same mall, but most are not. 

I'm not saying that this is the start of the Trump recession, because every Republican knows that he's going to bring back the American economy.  But if there was going to be a Trump recession, the start of it would look a lot like like this.  Just sayin'.

Here's another little note from someone who has watched the economy for the last 27 years, when we go into a recession, the financial news networks spend the first 6 to 12 months assuring everyone that we're not in a recession. 

So what does this mean for you?  If you own a business of any kind, I'd say put a bunch of cash aside, and step back and think twice about any major expenses.  There will be a HUGE ripple effect from all these store closures, which will probably lead to many more smaller store closures, particularly in the malls and shopping centers where the bigger stores are leaving.

Whomever you are, SAVE SOME MONEY, both for the proverbial "rainy day," and for bargains at all levels.

If you're working in retail, consider looking for another career unless you work in one of the high end malls that are still doing well. If you're an average person in small town America, you're probably in for a higher unemployment rate and a tough  recession in the coming years. 

If you work in high tech in one of the major tech areas like the Silicon Valley (San Francisco Bay Area), Boston, Seattle, Austin, Southern California, New York City, or Washington D.C., you're probably in pretty good shape.

What about entrepreneurs?  If you're an entrepreneur of any kind, this is a HUGE opportunity.  There is just WAY TO MUCH commercial property out there, especially in the smaller cities and towns.  You'll be able to find INCREDIBLE bargains on leasing or buying commercial properties now or in the next year or two.  Get your ideas together and go bargain shopping for buildings.

What it you're invested in the stock market?  It's been looking pretty toppy for a while now.  We're probably in for a major correction, if not full on bear market over the next couple of years.  We'll see.  If major corporations find a reason to being back all the money sitting overseas, it could stay stable.

If you're an Urban Explorer, break out the Go Pro and hit the road.  There will be big empty buildings galore for the next couple of decades or so. 

All fun aside, this will probably be a REALLY hard time for millions of people, particularly in the more rural and small town areas of the U.S.  There are several other factors (like $1.3 Trillion in student debt, much of which is not being paid on time) that could turn this into a catastrophic financial meltdown.  We could be in for a pretty standard recession, or it could turn into something like 2008, or even worse.  In any case, we're in for a complete revolution in shopping, with companies like Amazon taking more and more market share from the old school retailers.  The business world needs lots of good new ideas.  Do you have any? 

I looked up the stock price for Simon Properties, the largest mall operator in the U.S., this morning (3/24/2017), it was about $168 a share, it's lowest price since about September of 2014.

Amazon.com stock, on the other hand, was $850.48 when I checked today, not far from its all time high.  That pretty much sums things up.