WYPR: Malls Have Difficulty Weathering the Recession (2009-05-25)

One of the enduring staples of the American landscape, the shopping mall, has taken its lumps in the current national economic downturn. WYPR's Milton Kent spent a day in an area mall and has this report.

Wearing a Boston Red Sox jersey and fresh from a lunch-time pizza, Andrea Paradiso is in the mood for a makeover.

The Augusta, Maine resident is wandering through the mall in his hometown of Annapolis with two full shopping bags on a spring afternoon.

In the bags are items Paradiso hopes will give him a fresh start.

"Some clothes, some stuff to been having the same shoes, pretty much the same everything the last 10 years. Just got a divorce a few years ago and just going through a refresh of life. Just starting off new."

Just as Paradiso is doing a re-boot of his life, so are shopping malls, a pillar of the American economy for more than 50 years.

However, since the attacks of September 11th, malls have steadily had their grip on the consumer loosened.

Britt Beemer, founder and chairman of America's Research Group, a consumer behavior research firm, reports that in March, 36 percent of consumers merely visited malls.

By contrast, added Beemer, 58 percent of consumers that walked into Wal-Mart during March made purchases.

One of the more significant challenges to the malls is the drag that large anchors, like Macy's, Sears and Boscov's, all of which have closed stores in the last year, are having on the rest of the stores.

"So, it's ironic to think that these retailers that are department stores which are called anchors really are anchors now. But, instead of anchoring the mall, they're pulling them down because consumers aren't shopping the department stores as much."

With that as a backdrop, the success of Westfield Annapolis, the mall's corporate name, is remarkable.

Located on the outskirts of Annapolis near Route 50 and I-97, the mall has over 240 stores in over 1.4 million square feet, and is owned by Westfield, an Australia-based developer.

Westfield Annapolis, which opened in 1980, completed a 160-million dollar renovation and expansion two years ago.

The mall is operating at 94-percent occupancy, better than the 91-percent national rate as compiled by the International Council of Shopping Centers in March.

Scott De Graffenreid, the mall's marketing director, says Westfield Annapolis in particular and enclosed malls in general, still have a role to play in the American economy.

"I think the malls in America, the indoor malls will always thrive because they have to adapt and similar to the stores and how they have to adapt to the shoppers, we have to adapt to the stores and our shoppers."

Donna de Garcia, opened the Blanca Flor silver jewelry store when the expansion area was completed.

De Garcia, who also owns a jewelry store in downtown Annapolis, says she and her staff of 16 full- and part-timers, are sending out more e-mails and offering more sales than they have in the past.

"We're working a little harder to make the same or less money, but at least we're making it. We're making it happen."

And in six months or a year, if the economy rebounds and more people discover her location, de Garcia expects to do even better.

"So, with the mall being here, the new section being here longer, us being here longer, I know the store's going to do better."

It may take that kind of optimism, wrapped around a few dollar bills, to get the American shopping mall up off its knees.