The shopping experience at Metro Detroit malls will be very different once the coronavirus pandemic subsides and the doors begin to reopen.
Retail pundits say they expect shorter hours and smaller crowds of wary shoppers, with stores offering to deliver goods to the curb.
And there’s a good chance the landscape has changed: some presenters at department stores and other retailers are set to go extinct. Shopping centers that were in trouble before being forced to close in mid-March now find themselves in an even worse financial situation.
The COVID-19 shutdown has hit traditional mall retailers hard: JC Penney filed for Chapter 11 bankruptcy protection this month and will close nearly a third of its stores, although it has not say which ones. J. Crew and Neiman Marcus also filed for bankruptcy this month; both could close stores. Officials at Macy’s – which has already dropped many anchor points, including some in the metro Detroit area – have said it will take a smaller business out of the pandemic.
Even Nordstrom, considered by retail analysts to be one of the strongest department stores, announced the closure of 16 stores across the country this month and a corporate restructuring with job cuts. . Its three Metro Detroit locations escaped the ax, but its Partridge Creek location in Clinton Township had already turned dark last fall.
This all follows a recent national study by retail analytics firm First Insight, which found that shopping malls ranked last for places where consumers said they would feel safe to go. do their shopping.
For retailers that survive, their physical presence could also decline, according to S&P Global Ratings.
“We believe the economic shutdown and persistent social distancing behaviors will trigger a vast upheaval in retail, as the industry will be forced to significantly reduce its physical footprint and scale rapidly to reach the post-pandemic consumer.” , wrote Sarah E Wyeth, analyst at S&P. a report this month.
Goldstone said the most creative mall owners will incorporate other uses into their properties, including self-storage, offices and residential units.
“In some communities where they do not have this forward-looking vision, it is the strengths that will be called into question the most,” he said. “Because being creative is more powerful and more important than ever.”
Andy Parisi from Roseville might be typical of the average shopper when malls reopen.
“I don’t plan to go there at first,” he said. “I want to see a bit of what’s going on. And if there aren’t huge spikes in the cases, I’ll continue shopping.”
Parisi recently placed a pickup order from Kohl’s at the Macomb Mall without contacting anyone.
At Somerset Collection in Troy, many stores including Nordstrom, Macy’s and Saks Fifth Avenue offer temporary curbside pickup. This trend is expected to continue for months.
“A lot of stores will respond by asking shoppers to bring merchandise to the car for people who prefer, over the next three or six months or whatever, to shop this way,” said Ron Goldstone, executive vice president of NAI Farbman. , a Southfield-based real estate company.
“I think smart retailers – Targets, your Kohl’s, Home Depot, Lowe’s, Walmart, Meijer, to name a few – have already started this. I think that direction will continue.”
To make shoppers feel safer when returning, shopping malls will need to increase cleaning and security measures to ensure people are following social distancing guidelines, said Ronn Torossian, a crisis management expert and CEO of 5W Public Relations, based in New York.
“Business before COVID will not be the same as business after COVID,” he said. “COVID will forever change the world and, of course, it will change retail and commerce. ”
At Great Lakes Crossing Outlet in Auburn Hills, owner Taubman Centers Inc. is preparing for when it can reopen to foot traffic. Maria Mainville, spokesperson for Taubman, said the mall would open with shortened days first. Other precautions include cleaning and sanitizing throughout the day, focusing on high contact and high traffic surfaces. Hand sanitizer will be available at designated stations and water fountains will be closed.
“In all cases, we will continue to follow local, state, and federal laws and mandates, as well as guidance from the Centers for Disease Control, and we ask tenant teams to do the same,” Mainville wrote in an e -mail.
Shopping centers in difficulty
“Even before the COVID crisis, shopping malls were closely watched and faced with tons of issues,” said Manus Clancy, senior managing director of commercial real estate research firm Trepp LLC. “Even before March, there were tons of malls that were either in default. and had suffered losses or people were planning to go down this route.
Some malls in the Detroit metro area have been struggling for years, including Eastland Center in Harper Woods, which has lost flagship Macy’s, Target and Sears stores over the past decade without any replacement.
More recently, at least two local shopping centers have shown signs of financial difficulty. Starwood Capital Partners, the owner of The Mall at Partridge Creek in Clinton Township, is in default on a $ 725 million mortgage that also includes three out-of-state malls, according to Trepp. Nordstrom’s departure last fall was the second major anchor to leave the outdoor mall after Carson closed in 2018.
Fairlane Town Center in Dearborn has been in financial trouble, with its owner – also Starwood Capital Partners – in arrears on a $ 136 million loan as it tries to restructure its debt.
Starwood declined to comment on its finances. Regarding the reopening, Starwood Retail officials said in a statement this week: “We are closely monitoring and evaluating all orders from state officials to determine the appropriate time when the mall can be fully reopened. security.”
Some local malls are expected to weather the storm better than others, including Great Lakes Crossing Outlet in Auburn Hills, Clancy said. The mall is 95% occupied and covers twice the debt service payment. Its top anchor point is Burlington Coat Factory and no tenant occupies more than 7% of its space.
“It should defend itself better than the others,” Clancy said.
Earlier this month, before Gov. Gretchen Whitmer extended the state’s stay-at-home order until June 12, Lakeside Mall in Macomb County signaled plans to reopen on June 1. No reopening date was listed on its website on Monday.
Ophir Sternberg, CEO and founder of Out of the Box Ventures, owner of Sterling Heights shopping center, said he offered rent relief to his tenants in April and May, lowering it from 60% to 70% for 60%. days. The mall was at 75% occupancy before COVID-19.
So far, no Lakeside Mall store has decided to close permanently due to the pandemic, Sternberg said. “We certainly hope not, and that is why we are trying to help as much as possible with the rent relief program,” she said.
Out of the Box Ventures, which acquired Lakeside Mall in 2019, still plans to expand beyond retail, including an ice rink and events such as an auto show in September and a field of pumpkins for October.
“A lot of our plans have been postponed for now until we have a better understanding of the pandemic and how it will affect the holding of group gatherings and events,” Sternberg said.
The pandemic could accelerate the movement of consumers towards internet shopping, experts say.
“I still think consumers in general still enjoy the shopping experience, still want to be social and go to the mall, look at things and buy things when they see them and when they want to, but I’m sure that there are a lot of people during this challenge who shop online and realize it’s easier than they thought, “said Goldstone of NAI Farbman.” It’s an interesting boost to me. eyes of something happened.
Roseville resident Morgan Payne said she turned to online shopping to get the things she needed and wanted. It will probably be a few months before she starts shopping at a mall again, she said.
“I think shopping malls should be the last thing to reopen as it will just be another place to help spread the coronavirus,” she said. “There is too much touching and not buying happening in just about every store in the mall.”