Mall Doom: Analyst Warns 1/3 of U.S. Shopping Malls Will Close
Posted on May 15, 2016
The future leaks bleak for many U.S. malls. Foot traffic has been steadily decreasing as shoppers turn more and more to the Internet to purchase goods of all kinds. Even the clothing category is moving online. Years ago people purchased very little clothing online.Retail analyst Jan Kniffen, CEO of J. Rogers Kniffen Worldwide Enterprises, tells CNBC that many malls are going to fail. Kniffen sees 1/3 of all U.S. malls failing and many of the surviving malls struggling to survive.
Kniffen tells Squawk Box, "On an apples-to-apples basis, we have twice as much per-capita retail space as any other place in the world. The U.K. is second. They're half of what we are. So, yes, we are the most over-stored place in the world."
Kniffen sees 400 of the 1,100 enclosed in malls in the U.S. failing. Kniffen thinks only about 250 of the malls will thrive. The rest of the malls that stay open will struggle. The big reason for this is retailers are struggling and as they close stores to survive it will becoming a growing problem for malls. Kniffen thinks the malls that survive will be the ones with powerful operators, such as those owned by Taubman Centers, General Growth Partners and Simon Property Group.
Kniffen also says the U.S. is the most over-stored place in the world. We have twice as much retail space per capita as the U.K. He also sees 50% of retail sales moving online within 13.5 years. Take a look: