Betty and Phil Scheiber enjoy quiet afternoon walks through the air-conditioned corridors of the nearby Oxford Valley Mall.
After a year of mask mandates and social distancing, the retired couple from Middletown thought all malls were struggling like Oxford Valley, with two boxed-up and shuttered anchor department stores, two vacant food court restaurants, and 16 other smaller retail locations closed.
Then, they took a trip to King of Prussia Mall in neighboring Montgomery County. “I was in awe,” Betty said. “My mouth nearly hit the floor.”
She waited 40 minutes in a line that stretched around the Gucci store at King of Prussia. Phil got through four chapters of the latest David McCullough biography while sitting amid the orchids and metallic art installations outside the Louis Vuitton.
Such is the story of Philadelphia-area malls.
Higher-end shopping enclaves such as the Cherry Hill, Christiana, and King of Prussia malls are flourishing. Some other malls that cater to lower- and middle-income shoppers are struggling and are very likely to shut down in the next five years, retail analysts predict.
Willow Grove Park Mall currently has 13 empty stores.
At Montgomery Mall, 28 stores and five restaurants in the food court are unoccupied.
Neshaminy Mall has 32 closed stores, one vacancy in the food court, and an empty restaurant space beside its movie theater.
“The pandemic sped up the death of malls, and the deaths of those malls will promote the other higher-end malls because you won’t have that dilution of the market,” said Beth Azcor, a commercial real estate adviser and investor who owns and manages six shopping centers in Florida.
We simply have too much retail, analysts say.
“When we need one of something, developers build 10 of them,” Azcor continued. “We have about 1,000 malls in our country. We probably need about 700 of them. Some 300 will close in the next five years.”
The fate of malls is ultimately tied to the surrounding community, said Ray Wimer, a professor of retail practice at Syracuse University.
“If the people are struggling, the malls will also be struggling,” said Wimer.
“Department stores are traditionally for middle-income shoppers, and they are core of the mall,” Wimer noted. “That’s the anchor of the mall. The higher-end store or luxury markets are doing much better.”
Money to burn at the mall
King of Prussia draws shoppers from throughout the Philadelphia region, but it is in Upper Merion, which has a per capita income of $53,877, according to U.S. Census estimates. In neighboring Lower Merion, the average person takes home $88,102 per year, according to federal estimates.
Bensalem, home to the Neshaminy Mall, has a per capita income of $35,054. Middletown, home to Oxford Valley Mall, has a per capita income of $42,179 while neighboring Bristol Township has a per capita income of just $29,712, according to the U.S. Census.
Yet even if incomes rose in those communities, there are just too many places for their residents to shop, Wimer said. The Neshaminy and Oxford Valley malls are just six miles and a 12-minute drive from each other, and those malls contain many of the same stores.
“The United States went on this big building binge from the late 1970s through to 2016,” Wimer said. “The amount of retail square footage increased at four times the rate of population growth in the U.S.”
“Credit was cheap,” Wimer added. “People were spending money. We overbuilt your traditional malls. Then, we start seeing e-commerce take off.”
At the same time, the financial struggle of area malls has opened new doors to entrepreneurs who could never before afford space at major shopping centers. And it’s leading some to re-think the malls as a place for apartments, bowling alleys, and even a medical center.
Christiana Mall and Neshaminy Mall: same owner, contrasting states
Brookfield Properties, of New York, owns the Christiana and Neshaminy malls.
Christiana Mall is flourishing in Delaware, a state with no sales tax.
Shoppers travel greater distances, and over the state line, to buy more expensive products at stores such as Invicta, M.A.C., Michael Kors and Tesla. Just 3% of retail space in the Christiana Mall is vacant, according to the latest annual finance report issued by Brookfield to its investors.
Neshaminy Mall in Bensalem was 27% vacant, according to that same report.
No section of the mall is without some empty storefronts. Near the Neshaminy AMC 24 movie theater, customers will find a Cold Stone Creamery, Red Nails salon, Tai Chi Spa, an escape room activity center, and 11 closed stores in just that section.
The former Sears anchor store at Neshaminy is now vacant and marketed as a “convenient and dynamic opportunity for patient care.”
Before that, Bensalem Council approved the location for use as an arcade and entertainment center. It’s being considered for multiple uses, according to the commercial real estate brokerage firm Colliers International.
“We’re open for anything as long as the town is open for it,” said Todd Sussman, senior managing director for Colliers.
Neshaminy opened in 1968 at the confluence of U.S. Route 1 and the Pennsylvania Turnpike. A Neshaminy giant totem pole loomed over the superhighway.
Pomeroys, Sears, Strawbridge & Clothier were among the main attractions. On a second-floor terrace outside Strawbridge’s, the upscale Corinthian restaurant offered views of an interior courtyard fountain.
Preserving history:Historic dioramas at Neshaminy Mall saved, but where will they wind up next
Woolworth’s was just off the food court, and the Kaplan’s’ clothing shop had a playground in the middle of its store.
The Space Port Arcade and Café Riviera drew teenagers, perhaps too many.
In 2003, the mall was attracting so many young people that police were called on to help mall security guards control the crowds. Neshaminy posted code of conduct signs on common entrances, and guards distributed lists of rules on little white cards.
Strawbridge & Clothier became a Macy’s. Macy’s closed in 2017. Sears would close in 2018.
Pomeroy’s became a Bon-Ton and was later replaced with the Boscov’s — Neshaminy’s only remaining department store.
If Brookfield Properties has plans for Neshaminy Mall, they aren’t sharing details with officials in Bensalem.
Bensalem Mayor Joe DiGirolamo said there was talk of Round One Bowling & Amusement center inside the former Sears, but the developer pulled out, he said.
“They don’t have a plan,” said DiGirolamo of the Neshaminy Mall. “All I ever hear about is plans to put a Wawa outside the mall. How is that going to help the mall?”
King of Prussia thrives in person as Oxford Valley loses out to online
The suburban King of Prussia and Oxford Valley malls also are owned by the same corporation, Simon Property Group of Indianapolis.
At King of Prussia, 96.6% of retail space is leased, according to Simon’s latest annual report to investors. King of Prussia is a destination of sorts, with tour buses in the Upper Merion parking lot in its prime location just off the Pennsylvania Turnpike.
Some King of Prussia stores are closed, though you might not notice. Empty storefronts at King of Prussia are typically covered in floor-to-ceiling billboards, which advertise other stores in the mall.
At the Oxford Valley Mall, 75.5% of retail space is leased, according to the Simon Properties latest 10-K annual report. But the mall does not draw the high-end retailers of it King of Prussia counterpart.
Instead, more independent retailers and small businesses take up spaces once filled by national chains that have closed and moved out over the years.
Some shop owners said they were making enough money to pay the rent. But they aren’t making enough sales to hire a second employee. So, when that lone employee needs to eat or use the restroom, the store must temporarily close.
In the food court, three adjacent restaurants are actually staffed by the same two employees. The Oxford Hoagies, Popcorn & Nachos, and Xlent Burgers restaurants are three locations with the same chef and cashier, the employees said.
Inside the Exclusive Sneakers store at Oxford Valley, customers try on shoes that they later purchase online, the owner complained. The manager at Oxford Vitamins said customers frequently make Amazon purchases of health products while standing right next to him inside his shop.
Officials from Simon Property Group did not respond to requests for comment. The mall’s owners also declined to respond in January when contacted by this news organization for a story on the future of retail in Bucks County.
In August, officials in Middletown approved plans for 614 apartments on 20 acres of land located near a former Boscov’s at Oxford Valley. Officials have said the luxury apartment plan would help revitalize the mall as it would draw upscale retailers and restaurants with the hopes of grabbing shoppers and diners from the new residents.
Retail post-COVID:Bucks, Montco retailers hoping for rebound in 2021
The malls aren’t just losing shops and customers, they are also losing value.
In April 2019, the Oxford Valley Mall started paying less taxes after a property tax reassessment by the Neshaminy School District. Simon Property Group payments to the district dropped by $800,000 annually, according to the district. School officials said the mall had “reduced in value due to multiple empty storefronts and office space.”
Oxford Valley opened in 1973 near an interchange connecting U.S. Route 1 and Interstate 95. Fountains filled every courtyard between the Bamberger’s, Gimbels, Stern’s, and Wanamaker’s department stores.
Over the years, those anchors would change hands a few times, eventually becoming a Boscov’s, Sears, J.C. Penney’s and Macy’s. The Boscov’s closed in 2008. Sears is also shuttered.
Oxford Valley’s Disney store closed in September 2020 after two decades in the mall.
Comic relief at Montgomery Mall
For nearly 20 years, Ray Bistline has worked in comic book stores in area malls.
The timed release of comic books on Tuesday or Wednesday mornings leads to rare mid-week foot traffic inside the Montgomery Mall.
Before the pandemic, Bistline said employees heard regularly from the mall management about efforts to draw more customers into Montgomery Mall. “We haven’t heard anything from them since the pandemic,” he said. “I think everyone is still trying to figure out what to do next.”
Bistline said he thought there were too many options for shoppers, noting the proximity of so many other stores and shopping centers.
Across the street from Montgomery Mall, the Airport Square Shopping Center has a Michaels craft store and Marshalls department store, an Old Navy, Best Buy, Home Goods, HomeSense, an Ulta and a TJ Maxx.
One mile away, the Montgomery Square shopping center has a Barnes & Noble, Bed Bath & Beyond, Gabe’s, Target, a Pet Smart and a Party City. Off the main entrance to Montgomery Square, you’ll find a closed A.C. Moore adjacent to a closed Thomasville Furniture.
Oxford Valley suffers the same fate with those popular stores in shopping centers ringing its perimeter.
Three miles from the Montgomery Mall, the Shoppes at English Village has a Chicos, Trader Joes, J. Crew, Joseph A. Bank, Talbots, Sephora and an Iron Hill Brewery.
Next to that, the Gwynedd Crossing Shopping Center contains an AMC theater, Staples, and an ALDI supermarket.
Montgomery Mall added a supermarket in 2012, and the presence of a Wegmans was expected to draw traffic to sustain other shops. In the months that followed, Montgomery Mall added other stores and restaurants.
Yet, Montgomery Mall is currently operating with just 73% of its retail space under lease, according to the latest Simon Property Group 10-K annual report.
Montgomery Township Manager Carolyn McCreary said she was aware of no plans or discussions related to redevelopment of the mall.
“Unfortunately, I can’t speak to what Simon is doing to market space in the malls,” said McCreary. “I can say the township wants the property to remain a vital part of our commercial corridor.
“The blueprint for a mall of the past needs to be reevaluated,” McCreary continued. “Case in point, the success of the Shops at Valley Square in Warrington, and the Promenade Shops at Saucon Valley. Here, Wegmans and Dick’s Sporting Goods now serve as the main draws.”
The Warrington and Saucon Valley properties are more modern “lifestyle centers,” defined by the International Council of Shopping Centers as a specialized center with “upscale national-chain specialty stores with dining and entertainment in an outdoor setting.”
It’s essentially a model that turns traditional malls inside out, and givers shoppers the option to enter more storefronts from the parking lot and takes advantage of a “Main Street” feel.
Entrepreneurs in bloom at Willow Grove
Natisha Seward could rarely find the kind of apparel to match her style while shopping at area malls.
So, she opened her own boutique at Willow Grove Park mall. Seward said she was able to get a reduced rate for her first store location because the mall manager was eager for tenants.
A few months after opening at Willow Grove, Seward said she was contacted by the property manager at Philadelphia Mills, asking if she’d like to open a second location at the shopping center in Northeast Philadelphia. She’s not ready to expand yet.
Shoppers pop into her O’ Dats Cute Boutique and Seward finds bags, shoes and other accessories to match their outfit.
In June, Lynnesha Smith also opened the Bae Boutique in the Willow Grove. She’s still working as an accountant and hasn’t decided whether to quit her full-time job.
“I had never given a thought to opening a store,” said Smith. “I had approached the mall about opening a booth. I’m still in shock. I still can’t believe that I have a store in a mall where I used to shop.”
Smith also said she was offering a style of bags, boots, tops, and sweat outfits that can be hard to find in malls.
Willow Grove opened in 1982 on the site of the former Willow Grove Amusement Park, and a merry-go-round still turns on the third floor near the food court.
The property is managed by Pennsylvania Real Estate Investment Trust and is currently operating with 96.6% of its retail space under lease, according to PREIT’s latest annual report to investors.
The mall’s JC Penney’s is to be replaced by an 11-screen, 1,100-seat Studio Movie Grill that will include a dinner menu and a bar.
To be competitive, malls have to find new ways like thatto stand out.
Some malls are making a turnaround through experiences in the mall — like movie theaters with bars, said Wimer. Some have opened bowling alleys and virtual reality gaming centers.
“The food and beverage component is also becoming the new anchor,” said Azcor. “As department stores fail, can the mall pivot to restaurants, a theater and another entertainment component?”
Sitting in the courtyard outside JC Penney’s at Oxford Valley Mall, Phil Scheiber speculated on the future the center.
“I think either the Neshaminy or Oxford Valley mall will probably close,” he said. He pointed to the many trucks sitting in the Oxford Valley’s parking lot.
“It will probably become an Amazon distribution center.”