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"Internet Killed The Radio Store" - Mall Vacancies Hit All Time Record

Tyler Durden's picture


Two years ago, when discussing the long-term prospects for Bill Ackman's aggressive pursuit of General Growth, we noted that while the short-term post-reorg oversold bounce is warranted, the secular shift away from big-box stores and disappearance of retailers means that many more bankruptcies are sure to follow, and will be punctuated by all time highs in mall vacancies courtesy of an ever-growing shift to internet shopping. So while the incremental bankruptcies in commercial REITs have been slow in coming primarily due to record low interest rates, the mall vacancy number just hit a new all time high. According to Bloomberg Brief: "In 1979 the one-hit wonder Buggles sang “Video killed the Radio Star.” Several economic indicators suggest it’s time for a Buggles revival: “Internet Killed the Radio Store.” The popularity of Internet shopping is having a considerable impact on the retail landscape; mall vacancies are at the highest level in measured history, big box stores are looking to reduce their footprints, and those selling book, electronics, and sporting goods are closing. During the third quarter, vacancies at regional and super-regional malls rose to 9.4 percent from 8.8 percent a year earlier and 9.3 percent in the second quarter, according to the New York-based property research company Reis. This was the highest since data was compiled in 2000." In other words, in addition to the Fed, REITs are the next entity class to have gone all in on interest rates never going up: because without organic upside growth, the only marginal benefit is from continues interest benefits. Once those end, it is game over, first on the margin, and then literally.

Some more from Bloomberg:

The bankruptcies of Borders, Linen’s & Things and Circuit City are among the most obvious results of the comeuppance of on-line shopping. Additional store vacancies should be expected given Gap’s recent announcement of closures. The approval of the AT&T acquisition of T-Mobile by federal regulators would also have an impact.

This news will eventually hit broad-based employment, as retail employment at clothing, hobby, book and music stores has traditionally been quite high. Look for this number to start rolling over soon:

Employment data reveal the trend away from hiring at establishments that sell goods easily purchased on the Internet like books and hobby supplies. The need to employ sales people at apparel and accessory stores has actually increased since sales assistance is a necessity. An extra large shirt is not the same across all brands, and footwear  sizes vary greatly. Colors can mislead on the web.


Wal-Mart and Best Buy are experimenting with smaller store formats. In its last quarterly earnings conference call Best Buy said, “… we are planning to reduce our big box square footage by 10 percent over the next three to five years. Our test results  so far in this space continue to indicate that a store prototype which combines the enhanced operating model with reduced space and lower operating costs has not materially lowered our sales volumes.”


As a result of having to hold 7+ jobs to make ends meet, Americans now spend the least amount of time in malls since 2003:

Time spent in shopping centers has declined over the years, according to a U.S. Labor Department study. The number of minutes Americans spent per shopping excursion has fallen from a peak of 49.2 minutes in 2004 to 44.7 minutes in 2010. There are several reasons for this trend, including time-strapped consumers and less need for store browsing due to the Internet. Consumers can check prices on the web, make a trip, run in and make a purchase and dash back to the car.


But don't blame Canada:

The malls that appear to be performing the best are those along the Canadian-U.S. border. A stronger Canadian dollar has made U.S. purchases more attractive. This phenomenon was seen during the back-to-school period, and will likely be strong during the upcoming holiday season.


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Mon, 10/17/2011 - 09:29 | 1780974 firstdivision
firstdivision's picture

Maybe the OWS movement should move to the nearest mall.  I'm sure the property owners would be happy as they can count it as "mall traffic". 


I really find it hilarious that the banks refused to let these few people close their accounts.  The banks are really helping the OWS cause by doing this.  I'm far from a lawyer, but I do know that laws can be perversed.  Could the people that were arrested sue the banks for theft or fraud for refusing to give the people their entitled monies?

Mon, 10/17/2011 - 09:37 | 1781001 Harlequin001
Harlequin001's picture

I think you might find this is more to do with the recent splurge in building and not just internet shopping.

It is always the case that property speculators are the last to 'get it' and that last big build based on past performance is always the reason why the biggest builds are undertaken when the economy is at its height, and fail because they open later in a recession...

Mon, 10/17/2011 - 09:42 | 1781026 firstdivision
firstdivision's picture

I completely agree with you.  In my hometown, there are 3 huge malls, and it is quite a small populated area. 

Mon, 10/17/2011 - 09:46 | 1781039 Harlequin001
Harlequin001's picture

The number of people that hang around shopping centres without a bag is stunning. It means they haven't bought anything and are either trying to keep warm or cold or they are the most boring people on earth.

No trade there...

Mon, 10/17/2011 - 10:19 | 1781154 Bicycle Repairman
Bicycle Repairman's picture

I made a trip to the mall for the first time in a while.  The mall seems to be what it has always been: a place for suburban teenagers to hang out.  The stores at the mall reflect their tastes and needs.  As long as the mall is there they'll go and hang out.

Mon, 10/17/2011 - 10:31 | 1781203 Harlequin001
Harlequin001's picture

I always take the family out for a coffee for an hour every Sat and Sun and return before the rush starts here at 10.30-11am. This year 5 new malls opened and there are around seven more under construction. We won't talk about condo's. Still the build continues and still retail units remain empty until new builds suck tenants out of older malls thereby dragging down unit resale values on even relatively new malls.

I often wonder how these retailers stay in business when no one seems to be buying any goods and then it dawned on me, the malls are funded by pension funds for rental income and retailers survive by selling debt. They are all listed companies somewhere and other than that it is beyond me how mere trade enables them to pay the rent.

Mon, 10/17/2011 - 14:48 | 1782345 CompassionateFascist
CompassionateFascist's picture

Someone did a study of this a while back. It's like some kind Tribal Dance ritual or cargo-cult. Former shoppers (now broke) still go to the malls just to wander around, "be with" each other, window-shop, play let's pretend. And it is a great thing for us as more and more of the economy, such as it is, goes 'net: makes it more costly, more difficult for the ZOG TPTB to pull the kill switch.

Mon, 10/17/2011 - 09:55 | 1781055 DormRoom
DormRoom's picture

There's a greater risk.  The digital age implies that all medium are infinitely reproducable, and persistent.  Therefore contemporary works of art/mediums must compete with old medium,  And given the intractable constraint line of time, older medium may be hugely undercutting current forms.


example: instead of paying X dollars to see a new movie.  I can may 1/x to see a movie from 50 years ago in perfect HD.  Instead of paying to listen to the lastest song, I can pay 1/x to listen to songs a decade ago.  Instead of paying to read the lastest magazines, I can search google books, and consume Life Magazine issues from the 70s.


Therefore, contemporary living artists/medium are competing against defunct publications, and dead artists whose works may be better than the current form.


Therefore current dollars are used to pay for infinitely producable past production, undermining current production.


This is a rudimentary analysis of the problem of infinite, and persistent copies, in the digital age, but I feel that it's been overlooked.

Mon, 10/17/2011 - 10:21 | 1781162 johngoes
johngoes's picture

Therefore, contemporary living artists/medium are competing against defunct publications, and dead artists whose works may be better than the current form.

Being a cheap person I love getting $0.99 classics on my kindle. The quality of writing is superior to (fiction) books recently published.

For a book apropos to today, Steinbeck's "Grapes of Wrath" can't be beat.

Mon, 10/17/2011 - 10:25 | 1781178 Bicycle Repairman
Bicycle Repairman's picture

This is certainly true for 'popular' music.  I would add that unpaid 'amateurs' can now produce a quality product in a variety of arts, etc. The market for these products has also fractured into dozens of smaller sub-markets.

Tue, 12/27/2011 - 14:47 | 2014217 haibop
haibop's picture

great analysis. get your wife back

Mon, 10/17/2011 - 16:40 | 1782805 myne
myne's picture

Near enough. The premise is the same. Mass speculation just before a crash.

Shit, it sounds exactly like Minsky:

Mon, 10/17/2011 - 09:36 | 1781005 MillionDollarBonus_
MillionDollarBonus_'s picture

With Christmas on the horizon, these massively oversold retail stocks are looking extremely attractive. While redneck doomers cry about obscure and untrustworthy data, the smart money is quietly accumulating.


Mon, 10/17/2011 - 09:41 | 1781018 Harlequin001
Harlequin001's picture

er no, it's because it's always the way with idiotic investors who don't buy gold and silver...

They invested in credit funded project which were approved before the financial crisis and had to proceed or face suit for breach of contract.

When they open it's too late. It's too late because people have no money, which means that Christmas this year will be a complete fail.

Nuff said.

Mon, 10/17/2011 - 10:08 | 1781103 firstdivision
firstdivision's picture

The same way you were buying home builders in August 2007.  So you obviously went all in on RMBS AAA rated securities in 2007.  I'm hoping your all in now on the CMBS AAA tranche.  Good luck with that.

Mon, 10/17/2011 - 12:14 | 1781764 oogs66
oogs66's picture

no wonder they created that new cmbs index :) 

Mon, 10/17/2011 - 10:11 | 1781117 Montgomery Burns
Montgomery Burns's picture

Always funny when people dont get your schtick.

Mon, 10/17/2011 - 12:34 | 1781853 jonan
jonan's picture

is he just making sarcastic posts or is he a troll...

Mon, 10/17/2011 - 17:00 | 1782899 nyse
nyse's picture

Former. And consistiently hilarious.

Mon, 10/17/2011 - 11:17 | 1781455 upWising
upWising's picture


Take another hit off the Bong and Try again Bonus-boy::




CHRISTMAS BUYING + AGGREGATE DEMAND = Explosion in "re-gifting!"

Mon, 10/17/2011 - 16:59 | 1782894 nyse
nyse's picture

Love it!

Mon, 10/17/2011 - 12:21 | 1781793 Freddie
Freddie's picture

More like Obama and the fu*ktards who voted for him killed the radio store.  BTW - Trevor Horn one of the two from Buggles went on to become a very successful record producer.  The other chap, Geoffrey Downes was also successful.

Mon, 10/17/2011 - 13:46 | 1782124 harposox
harposox's picture

Trevor Horn – very talented chap.

Mon, 10/17/2011 - 09:22 | 1780975 bigwavedave
bigwavedave's picture

As a follow up and possible replacement to the #OccupyWallStreet protests I suggest:




That should the trick!

Mon, 10/17/2011 - 10:08 | 1781108 porrannor
porrannor's picture

you confuse Christmas with Shopping..... 

Mon, 10/17/2011 - 09:23 | 1780976 GeneMarchbanks
GeneMarchbanks's picture

You guys remember RadioShack?

Mon, 10/17/2011 - 09:28 | 1780988 HelluvaEngineer
HelluvaEngineer's picture

Yeah, it's that place that sold cell phones.

Mon, 10/17/2011 - 09:34 | 1780997 GeneMarchbanks
GeneMarchbanks's picture

Good riddance to malls. Frantic consumerism should be kept to your home PC/Mac, that way it's less visible that a majority of modern 'culture' is comitragic.

Fill the malls with surrealist art and hand out peyote to visitors. Wandering through malls will be the greatest/worst exerience ever... and memorable... maybe.

Mon, 10/17/2011 - 09:41 | 1781023 Conrad Murray
Conrad Murray's picture

If Barry Odumbo Soetoro's administration wasn't so busy hiring gay pedophiles(Kevin Jennings, the "Safe School" Czar), they might be able to come across ideas like this and hire you for National Arts something-or-other. A shame really.

Mon, 10/17/2011 - 10:05 | 1781097 GeneMarchbanks
GeneMarchbanks's picture

I'd be the modern Juvenal, a poet of the collapse. I'll take it!

Mon, 10/17/2011 - 10:05 | 1781094 Long-John-Silver
Long-John-Silver's picture

Before Radio Shack sold cell phones they sold electronic parts and supplies. When they moved in the phones they eliminated electronic parts and supplies. The salesmen had no time to sell small packs of resistors and sundry other supplies as they spent all their time on the phone activating the customers new cell phone or getting it reactivated due to non-payment. I repair orphaned electronic devices used in older CNC machinery and industrial robots. I worked out of Radio Shacks electronic part bins simply because they would do all the inventory and stocking of parts for me for just a slight premium above the cost of Mouser or Digi-Key parts. I had to give up on Radio Shack because the store managers no longer had the time to inventory and stock parts, most simply put them on clearance and eliminated them completely. I went ahead and purchased parts bins and stocked them myself from Mouser and Digi-Key. While I was at it I put a bar code reader on a computer and loaded an inventory  program on it. When I order parts I scan them as I replenish stock and scan parts when they are removed from stock and used. Many of us did this and to the chagrin of Radio Shack. After they discovered their parts bins was where the money was and cell phones were a money pit. They attempted to bring  all us "hobbyists" back but by that time they had done what I had done and would never be back to buy their electronic parts. The ugly truth they discovered was the fact that 95% of the people buying parts were not hobbyists they could afford to lose but professionals that would never return to buy parts from them.

Mon, 10/17/2011 - 10:18 | 1781152 mccoyspace
mccoyspace's picture

Amen to that. Once you go Jameco/Digi Key/Mouser/McMaster Carr you can never go back to Radio Shack. But the bar code reader and inventory control system is awesome!

Mon, 10/17/2011 - 09:40 | 1781003 Don Birnam
Don Birnam's picture

Ah, the good old days...back in ought-four, when "Fast" Eddie Lampert spent $11 billion to buy Sears, creating, at that time, a big-box conglomerate not only brimming with "vast imbedded, prime-location real estate value [ Commercial real estate ? Ha ! - Ed. ]," but resoundingly heralded by fawning elements in the "financial press" as the "next Berkshire Hathaway."

K-Mart and Sears. A mating of pidgeons.

Mon, 10/17/2011 - 10:20 | 1781156 yabyum
yabyum's picture

The new retail model is the strip mall. One dollar store, a check cashing joint (that also buys gold), A tattoo parlor, a liquor store, and a ethnic tienda.  It used to have a porn shop but the net also took care of that.

Mon, 10/17/2011 - 11:06 | 1781180 Jay Gould Esq.
Jay Gould Esq.'s picture

In my particular area, the check cashing joint has been replaced by payday and auto title loan outlets. Borrowing passage fare for the descent into Third World status.

Mon, 10/17/2011 - 09:37 | 1781011 Pool Shark
Pool Shark's picture



"Internet killed the Radio Shack"


Mon, 10/17/2011 - 09:44 | 1781030 lincolnsteffens
lincolnsteffens's picture

I remember RADIO SHACK in the 1960's. It was a great store where you could buy individual electronic parts and test your radio tv tubes to see which one had conked out. Everything from transistors and capacitors to Ham Radio equipment....and... the people running the store could tell you everything you wanted to know.

There is a small one in my local rural small shopping center. I avoid it because of the pain in the ass sales help (?).

There is also a K Mart where really fat people shop, probably for all the low priced "food" they sell that will just make you fatter.

We also have a small satellite Sears store where the sales people are very good. The problem is Sears keeps trimming the profit margins of the franchisee  so much that he will eventually have to call it quits. In addition Sears will let you charge stuff and pay it off over two years with no interest. How are they going to survive except through the internet?

Mon, 10/17/2011 - 14:56 | 1782375 CompassionateFascist
CompassionateFascist's picture

Right. B&N, lots of others, out of storefront business...but now on the 'net.

Mon, 10/17/2011 - 10:11 | 1781118 nedwardkelly
nedwardkelly's picture

You guys remember RadioShack?

I had a few minutes to kill in a mall recently, so stopped in to take a peek at radioshack. I'm in the market for a new phone, so figured I'd look at the massive display of phones they have. As I got closer I realized that all their phones (must have been 50 of them) were all fakes... Plastic pretend phones with small pictures where the screen would be. WWWWTTTFFF. What sort of purchasing decision are you going to make based on a fake cardboard phone?

I wonder how the boardroom conversation went... "Well there's pros and cons... Pro is, at least noone will steal our phones. Con is, we wont sell any phones at all ever"

Mon, 10/17/2011 - 14:27 | 1782257 Freddie
Freddie's picture

Most Radio Shack phone customers are Obama voters.  I have been in there a few times for cables. Sad.

Mon, 10/17/2011 - 09:24 | 1780978 Mercury
Mercury's picture

Countdown to federal internet sales tax...

Mon, 10/17/2011 - 09:29 | 1780989 HelluvaEngineer
HelluvaEngineer's picture


Mon, 10/17/2011 - 10:22 | 1781169 Miss Expectations
Miss Expectations's picture


Mon, 10/17/2011 - 09:26 | 1780981 slewie the pi-rat
slewie the pi-rat's picture

smaller mcmansions

smaller big box stores

Buggles - Video killed the radio star 1979 - YouTube

Mon, 10/17/2011 - 14:33 | 1782281 Freddie
Freddie's picture

The Buggles - Elstree

As I mentioned, Trevor Horn went on to be a major record producer in England.  He and Geoff Downes were in Yes at one point as well.

Mon, 10/17/2011 - 09:26 | 1780982 patb
patb's picture

The US has far too much retail square footage.

The Greenspan cheap credit era kept it growing a decade too long

Mon, 10/17/2011 - 15:00 | 1782394 CompassionateFascist
CompassionateFascist's picture

And Fed-graduate Herman Cain's a big fan of Andrea Mitchell's lesser half. Keep thinking of the Repubes last "black hope" - Colin Powell - who ended up an Obama voter.

Mon, 10/17/2011 - 09:26 | 1780983 Flakmeister
Flakmeister's picture

Get rid of 75% of the retail space in this country.... 

The retail binge provided us with a  legacy of false growth and warped values. All brought to you by the master of finance, in particular, the magicians who brought forward demand through the creation of debt...

Mon, 10/17/2011 - 09:37 | 1781014 Don Birnam
Don Birnam's picture

The Flakmeister scores in the x-ring. Absolutely correct.

Mon, 10/17/2011 - 09:28 | 1780987 Seasmoke
Seasmoke's picture

Malls are still very important.......i need them to look at the product before i pay 20% less and no sales tax online (plus i love fucking the state even more).......and sometimes i can even send the item directly to the store for pickup and have it shipped free

Mon, 10/17/2011 - 09:31 | 1780994 Sudden Debt
Sudden Debt's picture



Mon, 10/17/2011 - 09:32 | 1780995 Boilermaker
Boilermaker's picture

Then why am I getting my face continually ripped off on IYR and SPG puts?

Mon, 10/17/2011 - 09:48 | 1781046 T-888
T-888's picture

I'd like to throw my SRS in with that group....

Mon, 10/17/2011 - 10:08 | 1781105 Boilermaker
Boilermaker's picture

Yea, it's the same BS.

Mon, 10/17/2011 - 09:33 | 1780996 Irish66
Irish66's picture

Lowes closing 20 stores

Mon, 10/17/2011 - 11:20 | 1781472 Ned Zeppelin
Ned Zeppelin's picture

Plus will not be opening any new North American stores. Howzat for a booming household sector?

Mon, 10/17/2011 - 14:41 | 1782317 krispkritter
krispkritter's picture

They should. During the boom they built a Lowe's right across the f'in street from every Home Depot(and vice versa I might add).  Now you have two huge box stores selling the same crap at the same prices and underserving half the potential market. The only good part is that smaller businesses were better off. Walgreen's and Eckerd's did the same thing. They bought up opposite corners on every street their competition was on and not only overpaid but shut down countless gas stations and other small businesses to again, sell the same crap as the store across the street. And in the end we know how well that worked for Eckerd's.  At least CVS had the brains to shut down most of those stores. They're now auto parts stores, Big Lots, and other retailers...

Mon, 10/17/2011 - 09:35 | 1781002 Ruffcut
Ruffcut's picture

Shopping malls, do they still have those? I thought they were kid hangouts. Maybe more coin/gold and gun shops would help.

Mon, 10/17/2011 - 09:36 | 1781004 PulauHantu29
PulauHantu29's picture

Fewer buyers as people pay off massive Bill Gross said,"aggregat edemand way down."

Mon, 10/17/2011 - 09:36 | 1781006 Conrad Murray
Conrad Murray's picture

Who the hell still shops at the mall other than 12 year olds and the Pedobear? The very worst society has to offer, meandering around in a Bernaysian daze. Fuck that.

Monday music playlist for ZH -


Mon, 10/17/2011 - 09:41 | 1781024 Quinvarius
Quinvarius's picture

Where else do you shop if not at a strip mall or some other kind of mall?  It is either that or Walmart/Sam's Club.

Mon, 10/17/2011 - 09:52 | 1781056 SheepDog-One
SheepDog-One's picture

Army surplus store, Quin.

Mon, 10/17/2011 - 09:54 | 1781064 GeneMarchbanks
GeneMarchbanks's picture

Conrad doesn't shop. He lives in a fully supplied fortress, owns PMs, a range of pistols and has basic survival skills. He also knits. Panchos, underwear, ski-masks... whatever.

Mon, 10/17/2011 - 10:21 | 1781164 Quinvarius
Quinvarius's picture

I understand his did invent the ski-mask that also works as underwear.  The legholes are too tight for me and the nose hole has a draft.  But the storage in the back is nice.  I just wish they were reversable.

Mon, 10/17/2011 - 09:51 | 1781051 SheepDog-One
SheepDog-One's picture

Hooray for Dr. Bernays!

Mon, 10/17/2011 - 15:12 | 1782445 anonnn
anonnn's picture a Bernaysian daze.

Well writtenj. A sledgehammer effect.

Mon, 10/17/2011 - 09:36 | 1781009 mccoyspace
mccoyspace's picture

Glad to see my sculpture about the near-future of Big Box malls was on the mark.

Mon, 10/17/2011 - 09:44 | 1781031 Conrad Murray
Conrad Murray's picture

I was certain this was going to be some giant poo log steaming away in the molded bowl of some long ago forgotten about fuel station restroom. But, no, it's legit AND good. ZH, always full of surprises.

Mon, 10/17/2011 - 09:55 | 1781066 Fukushima Sam
Fukushima Sam's picture

Are those zombies!?!

Mon, 10/17/2011 - 10:25 | 1781179 mccoyspace
mccoyspace's picture

Pretty much....!
Of course there I'm standing on the shoulders of giants -- Dawn of the Dead in this case.
It could also be plague victims or other sundry Really Messed Up people.
It's open to interpretation, it's art after all.

Mon, 10/17/2011 - 14:11 | 1782214 ToddGak
ToddGak's picture

Nice Dawn of the Dead reference.  Apparently the phenomenon of glassy-eyed and slack-jawed zombies wandering through shopping malls was already well known in the 70's.   And I'm not talking about dead people.

Mon, 10/17/2011 - 09:37 | 1781015 Quinvarius
Quinvarius's picture

These numbers seem to understate what I am seeing in my area.  But I guess when you are trying buy something, and the place you normally go is closed, it seems more real.

Mon, 10/17/2011 - 09:39 | 1781019 williambanzai7
williambanzai7's picture

One would have thought that the online shopping phenomena would have catapulted the postal service, another fine example of mismanagement and stupidity.

Mon, 10/17/2011 - 10:04 | 1781092 tamboo
tamboo's picture

once again you fail to see the premeditated malevolence.

i admit that it's more comforting to see them as fools rather than

having to admit that youre the fool who was fooled.

postal system is being intentionally run into the ground

so it can be bought for pennies and privatised.

coming soon to all the other public assets financed by the taxpayer.

Mon, 10/17/2011 - 10:08 | 1781106 Midas
Midas's picture


Shipments of parcels through the Post Office is up. As are all classes of mail except the most profitable one: First Class Mail. I do agree with you about the mismanagement. Their solution is to take it out on the workers and cut service. If you pay attention to management's ideas you will notice every one is a cut of service. This is generally not good for a service industry. Don't believe the hype though. They still mailed 171 billion pieces last year. If they were to raise the postage on each letter by a penny that is 1.71 billion. Not bad! Makes a 4 billion dollar operating budget loss not seem so bad.


Mon, 10/17/2011 - 10:14 | 1781132 nedwardkelly
nedwardkelly's picture

One would have thought that the online shopping phenomena would have catapulted the postal service

If they weren't completely incompetent... I order a lot online, and I can't even remember the last time USPS was available as a shipping option. For some reason the organization that is probably coming to my house anyway (at the very least, driving straight past) on any given day can't deliver a package more competitively than a company that has to make a special trip.

Mon, 10/17/2011 - 15:23 | 1782488 anonnn
anonnn's picture

USPostalService operates under rules established by Congress...such as cheap delivery of spam-mail, even if unwanted by recipient.

E.g., a mass mailing company went bankrupt 2 years  ago and left an unpaid $1Billion account at USPS.

USPS management must be and is fawning toward its Congressional masters who in turn serve lobbyists. Long been that way.

Thus explains the hollowing-out of USPS.

Mon, 10/17/2011 - 16:32 | 1782785 myne
Mon, 10/17/2011 - 09:39 | 1781021 Ronaldo
Ronaldo's picture

Not only are the malls seeing less occupancy in our area due to closures, many local businesses seem to be moving in order to negotiate a lower rent and even a better location at the same time.  This is also not restricted to one type of retail business in our area.  It seems this will help local retailers with profits/costs, but the larger owner/managers of retail space are going to see less revenue from those that do remain. Once businesses are in a window to renegotiate their rent I think this activity will trend higher.

Mon, 10/17/2011 - 09:40 | 1781022 lizzy36
lizzy36's picture

Going to get even better, when GAP closes those 200 stores:

Long-struggling Gap Inc. is closing nearly 200 stores and downsizing others in the U.S. as it focuses on international expansion, the San Francisco company said Thursday.

The apparel giant — parent to the Gap, Banana Republic and Old Navy chains — plans to reduce the number of Gap brand stores in North America to 700 by the end of 2013, a 21% decrease from the 889 that it operated at the end of July

Mon, 10/17/2011 - 09:57 | 1781073 GeneMarchbanks
GeneMarchbanks's picture

Gap, Banana Republic and Old Navy chains

Am I the only one to spot the supreme irony here?! Fuck it, too easy...

Mon, 10/17/2011 - 14:48 | 1782339 krispkritter
krispkritter's picture

At the rate things are going downhill, Banana Republic stores may be so aptly named for the US market that it wiill be a rare success story. If they can just get to the point where they are selling .99 clothing, dented canned foods, and ready-to-unfold cardboard 'Condos' I think it will take off...

Mon, 10/17/2011 - 15:33 | 1782529 anonnn
anonnn's picture

For perspective, note that "poor, struggling" GAP had net income over $1 Billion. It has long history of profits +/- $1 B.

Mon, 10/17/2011 - 09:44 | 1781033 Village Smithy
Village Smithy's picture

This inspite of $50-$60 billion per year being spent by mortage delinquincy squatters.  

Mon, 10/17/2011 - 14:09 | 1782207 j0nx
j0nx's picture

Most relevant post in here so far.

Mon, 10/17/2011 - 09:46 | 1781040 AngryGerman
AngryGerman's picture

From Bloomberg: Salvation Army plans to occupy 10% of mall space over the next 5 years due to worsening economic conditions.

Mon, 10/17/2011 - 09:51 | 1781057 Archimedes
Archimedes's picture

Got a link for this?

Mon, 10/17/2011 - 10:09 | 1781112 AngryGerman
AngryGerman's picture

my crystal ball

i meant i looked deeply into my cristal  (huauauauauauauaua)


see 3rd pick from top

Mon, 10/17/2011 - 09:46 | 1781041 Nascent_Variable
Nascent_Variable's picture

What the fuck is a mall?  Do they have porn there?

Mon, 10/17/2011 - 10:23 | 1781173 yabyum
yabyum's picture

No, Your porn is on the net.

Mon, 10/17/2011 - 15:06 | 1782414 CompassionateFascist
CompassionateFascist's picture

If you're going to look at porn, at least make it a learning experience:

Mon, 10/17/2011 - 09:48 | 1781045 Rock the Casbah
Rock the Casbah's picture

Back in the 80s, a loser like me spent hours/ week hanging out in the mall.

My blond, status-obsessed 17 year old daughter hasn't been to the mall in months. It's structural.

Mon, 10/17/2011 - 15:11 | 1782438 trav7777
trav7777's picture

i been keepin her busy

Mon, 10/17/2011 - 09:48 | 1781048 SheepDog-One
SheepDog-One's picture

I know all the strip malls here are empty, or at best now have a laundromat or some oriental store you have no idea what it actually is.

Mon, 10/17/2011 - 09:54 | 1781052 Archimedes
Archimedes's picture

Yeah I constantly go in and out of DRV (And have lost a few times) as REITS magically levitate but the end is near. It is going to be a slow motion trainwreck though as they will not go gentle into that goodnight.

But the internet is the future. Giant warehouses strategically placed for fulfillment. I predict in addition to the Gap that Best Buy is gonna start getting clobbered. Barnes and Noble is next...

Once the big box anchor stores go then it is game over for the whole strip. This will play out over the next 5 years.

I am hoping to get back in to DRV in the 10's but I will buy in at the 11"s after a few more data points and ride it out. I truly believe it can be a 10 bagger. The big REITS Vornado. Simon, Boston Properties are gonna see their stock halved within the next 12 months.

Mon, 10/17/2011 - 10:08 | 1781104 adr
adr's picture

and where are people going to work to get money to buy products from the internet smart guy? 75% of the available jobs today are retail jobs or service jobs dependent on those stores. Walmart is the biggest employer in the USA.

The internet isn't the future. It is the destruction of the economy. I would have no propblem with a 20% internet sales tax due to the employment destruction effect of internet commerce. People talk about outsourcing jobs to China as a problem but look what the internet does.

Also the internet is the largest source of counterfeit products that are causing a ton of headaches for small business. My company spends a lot of time shutting down Ebay and Amazon web shops selling counterfeit products less than half our current retail. Do you know what happens when a buyer ata a major chain sees a product that looks like yours online selling for less than the wholesale price he pays? It isn't a fun conversation.

Mon, 10/17/2011 - 10:27 | 1781192 Seasmoke
Seasmoke's picture

so the people who have jobs at the internet retail companies dont count......just because the internet makes things easier, doesnt mean it runs by itself

Mon, 10/17/2011 - 10:40 | 1781231 Archimedes
Archimedes's picture


I am not saying that the destruction of the malls will be good for the economy. They WILL destroy a lot of the 7 dollar an hour jobs in the eCONomy.

But that is the main issue right? The fact that America is NOT creating high paying jobs and instead creating lots of menial work.

What America needs is the re creation of Factory jobs but at a lower rate than the past. It is perfectly acceptable to get an $18-$25 dollar an hour job in a factory instead of the grossly distorted salaries Union workers got in the past and are currently getting. Because here is the third rail that no one ever wants to touch: If you are a laborer you are entitled to NOTHING. You are only as valuable as the guy with the same laboring abilities will work for.

I know people with College degrees, Master Degrees etc and none of them are guaranteed a job. (Well teachers and eCONomists are) but most have to work for a living. There is nothing guaranteeing that my Marketing firm has to employ me because I am in a Union. I am not guaranteed a pension after 20 years.

So why should a laborer be promised these things? Because they are blue collar and did not study as much as I did in school? Because they had a tough upbringing? Because they are just dumb? (I am not calling laborers dumb I am just making a point.

America was built on labor and I understand the importance of Blue collar workers earning a decent wage. (I am not saying they deserve China like slave wages.)

But they also don't have the right to finish high school and go to some factory or auto plant and expect to make 40 dollars an hour doing the same thing day in and day out, get full benefits and a pension in the end.

America has had nearly 60 years (Three generations) for labor to uplift them. The idea was to go work in a factory as hard as you could to make a wage and send your kids to school to educate themselves so they would NOT have to work in the factories.

Not for generation after generation to keep working there. Funny people laughed at this little guy a while back. His  words are prophetic today:

Ross Perot 92


Mon, 10/17/2011 - 12:47 | 1781910 Dapper Dan
Dapper Dan's picture

Where does a persons I.Q. fit in to your reflections?

Do you believe  that we all have the ability to get a Ph.D or masters degree, if we would work hard and study long hours?

I recommend Robert M. Hausers study   

Meritocracy, Cognitive Ability,  and the Sources of Occupational Success 

?your statement below is perplexing, did you really mean to say that?   

But they also don't have the right to finish high school and go to some factory or auto plant and expect to make 40 dollars an hour doing the same thing day in and day out, get full benefits and a pension in the end.








Mon, 10/17/2011 - 11:46 | 1781615 onearmedlove
onearmedlove's picture

Don't worry Wal-Mart will be deemd too big to fall, minimum wage on the other hand won't be.

Mon, 10/17/2011 - 15:05 | 1782410 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Yes, let's bring back the horse and buggy so the whip salesmen can have their jobs back:)  It's called consumer choice.  Adjust and adapt!

Mon, 10/17/2011 - 10:00 | 1781077 adr
adr's picture

The internet isn't killing malls. The increase in internet shopping still hasn't reached a level that could make a dent in overall retail consumer consumption. ure the hedge funds and venture capital guys would want you to believe that so you'll pump up Amazon's stock even more. 

Mall traffic and big bix traffic is down because they built too many shopping areas over the past ten years during the BS boom. I have five Walmarts, three Home Depots, two Lowes, and Three Best Buys within 20 minutes of my house. Within 30 minutes you can add another two Walmarts and one each of the others. There are four shopping malls within that distance as well. The stores are competing with themselves for customers.

Every time Walmart opens a new store they are just taking customers away from other Walmarts. The corporations needed to keep opening new stores to play the BS inventory shift game to record inventory transfers as profit.

How many people here know that Walmart and other retailers force vendors to take up to a 20% invoice discount on shipments to new stores? Wow 20% extra margin on the already insane profit margins. In Walmart's case most of the time you have to ship the first order to a brand new store at your cost, Walmart gets the product for free, but you get to have your product at Walmart.

Mon, 10/17/2011 - 11:03 | 1781366 wisefool
wisefool's picture

Anybody remember when Kmart bought Sears on a leveraged buy out based on real estate valuation? And went bankrupt leaving the non-protected share/bond holders on the hook allong with the tax payers?

This is what OWS needs to be about. Throw in the residential RE flippers. Those duplicate big boxes absolutely destroy the environment in 100% factual ways, not global warming speculation. The people who did this crap are the .1 %. Not your local bankster, or a trader at CBOT. Sure they traded the decision but they did not make the dumb dumb decisions. And they took the losses. The idiots are still running around and doing this crap.

Mon, 10/17/2011 - 10:01 | 1781083 docmac324
docmac324's picture

Wel not here in Seattle.  Hell you cannot find a parking spot, anywhere.  Maybe they are all depressed window shoppers, but the malls here are FULL.


Mon, 10/17/2011 - 10:20 | 1781159 Stuck on Zero
Stuck on Zero's picture

There's one mall I'd like to see emptied out: the Washington Mall.

Mon, 10/17/2011 - 15:14 | 1782455 trav7777
trav7777's picture

build more MLK memorials

Mon, 10/17/2011 - 10:03 | 1781089 tamboo
tamboo's picture


Mon, 10/17/2011 - 10:17 | 1781109 buzzsaw99
buzzsaw99's picture

couple overbuilt retail space with store closings and we observe increased vacancies. On the other hand reit stocks and bonds seem to do okay because of low interest rates, dollar weakness, and endless pension fund buying. the internet bodes ill for brick and mortar inventory as well. The stores are just a place to look at stuff and try it on. They don't carry all colors sizes varieties anymore, that is all in a centrally located warehouse. (Not that fundamentals matter in this market, there is only the bernank)

Mon, 10/17/2011 - 10:18 | 1781148 Stuck on Zero
Stuck on Zero's picture

Retail in our city is starting to look more like "services and experiences: i.e. things you can't get online.  Meanwhile most Americans are learning that the cost of gas is so high it's cheaper to pay the shipping than driver 20 miles to the mall.

Mon, 10/17/2011 - 10:18 | 1781151 Kilgore Trout
Kilgore Trout's picture

In the town near where I grew up (population, say 7000), there were Sears, Wards, and JC Penney all around the town square. Sears and Wards stores were probably 400 square feet each, with a few washing machines in the show room. You went to the counter at the back and ordered or picked up your goods. JC Penney had racks of clothes and stuff like dress patterns, cloth, and thread, but most business was conducted at the catalog counter at the back.

Shopping was done gazing at the catalog in the privacy of your home. In many ways, not so different from the on-line experience.

Mon, 10/17/2011 - 10:20 | 1781157 tempo
tempo's picture

With free shipping for purchases over $25 and no sales tax, I buy nearly everything (ex food,gas) over the internet. Malls and strip stores are toast.

Mon, 10/17/2011 - 10:35 | 1781228 Cortez
Cortez's picture

If it weren't for JCPenney I would neeever go to a mall.  But ya gotta buy new threads now and then and the internet and clothes are rarely a good match.

Mon, 10/17/2011 - 11:06 | 1781388 batterycharged
batterycharged's picture

I recently moth-balled my car. Huge savings on gas, insurance and repairs. I decided to see if I could get around by foot, bike and bus.

I do a lot of shopping on line. I may pay a little extra for shipping, but the offset of my lost vehicle costs is more than enough to cover it.

I have really very little need for local stores. In fact, just last week I ordered $2 washers on line. Yeah, one pack of washers.

Instead of paying the $4.50 bus fare to get to Home Depot, I paid $1.50 for shipping. And I never have to get out of my recliner.


Mon, 10/17/2011 - 11:18 | 1781391 slackrabbit
slackrabbit's picture

prof. warren warned about this in early last year

shorted that too

remember she is they got rid of her.....listen to the last minute carefully

Mon, 10/17/2011 - 15:09 | 1782433 krispkritter
krispkritter's picture

The one who said this: "There is nobody in this country who got rich on his own. Nobody. You built a factory out there — good for you.

But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory. [Bookworm note: Warren must have made this statement before the Gibson Guitar factory raid, when marauding bands of government agents did precisely that to a factory that forgot to pay off the Democrats.]

Now look. You built a factory and it turned into something terrific or a great idea — God bless! Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along." 

Mon, 10/17/2011 - 12:03 | 1781702 Schmuck Raker
Schmuck Raker's picture

Does this mean I have the Fed buying CMBS to look forward to?

Mon, 10/17/2011 - 12:11 | 1781751 Fix It Again Timmy
Fix It Again Timmy's picture

Legalize prostitution and really put strip back into malls...

Mon, 10/17/2011 - 12:41 | 1781887 Lester
Lester's picture

Don't matter how many times you sort the variables on your business plan.  The Hard Fact Is THIS:  You can't do business with people who don't have any money!

Mon, 10/17/2011 - 14:53 | 1782362 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

This has to be very disappointing for our protecters at the TSA.  What will happen when they set up their goon squads at the shopping malls and there are no small children or old grannies to molest in the name of national security?  Oh, I know, they will go to the streets and highways.  Can't wait to be radiated on my way to work!

Mon, 10/17/2011 - 14:58 | 1782386 FreudianSlip
FreudianSlip's picture

Never worry.  These vacant malls will soon be converted by the federal government (paying top leasing rates) into a wide variety of (no service) agency branches to "serve the people" along with thousands of Obamacare clinics run by nonmedical staff that can only handout $10 aspirin.

Mon, 10/17/2011 - 15:09 | 1782430 FreudianSlip
FreudianSlip's picture

Hell, just one expensive TSA security office on every mall level should adjust those commercial lease incomes back up in a heart beat.  Fixed that, next change...?

Mon, 10/17/2011 - 15:17 | 1782470 Grand Supercycle
Grand Supercycle's picture

SP500 daily chart now gives bearish signal, warning of a new leg down. Weekly chart reverts to neutral.

Mon, 10/17/2011 - 16:28 | 1782766 myne
myne's picture

loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers > loans > jobs > consumers

Conversely: no loans > no jobs > no consumers > no loans > no jobs > no consumers.

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