The mall of the past, which had multiple department stores, a fast-food filled food court, and a handful of smaller speciality stores is dying. But a new type of mall is rising from the ashes. The catalyst for this creative destruction is of course bankruptcy.
When the Sears and Bon-Ton bankruptcies were announced earlier this year, many predicted that mall owners might be the next to file for protection. As we have discussed on this blog many times, one company filing for bankruptcy often sets off a chain reaction, with related retailers or links in their supply chain following suit. Our firm negotiates a lot of business workouts and represents many creditors in the Milwaukee area for this reason.
What we are seeing in the retail industry following the Sears and Bon-Ton bankruptcies is different. Malls are wondering whether they need 3 or 4 huge department stores as anchors when so much traditional department store shopping is now done online or in stand-alone big-box retailers like Walmart and Target.
Some mall owners are looking at their empty spaces and completely reimagining them. A few are subdividing what used to be large stores into smaller spaces. This is a sort of don’t put all your eggs in one basket approach that also capitalizes on the fact that smaller speciality retailers are doing well right now.
Others are remodeling or demolishing former department stores and turning them into co-working spaces, apartments, fitness centers, and hotels. Larger, sit-down restaurants are also being incorporated into many spaces. The all-in-one shopping experience is transitioning into a more complete live-work-play experience.
These mall transformations are certainly different, but they are not that surprising when you think about the fact that department stores were people magnets, and they are being replaced by people magnets that just happen to be something other than a department store.
The bankruptcy process allows creative changes like this to take place. This is the upside of what is often a challenging and frequently frustrating situation. If your business is in trouble, or you do business with a company that appears to be headed for bankruptcy, it is time to talk to an experienced bankruptcy attorney that can help you take advantage of the situation and come out the other side with a plan for moving forward.