A rising number of retailers and malls are closing across the country. The retail industry has been struggling and the pandemic continues to cripple their bottom line.
Shopping malls nationwide were struggling and closing even before the pandemic. A rising number are now being pushed to the brink.
About 25,000 stores are expected to close in the U.S. this year because of the pandemic and nearly 60% will be in a mall. The amount surpasses the record of 9,800 closures last year.
"Not only have we seen, you know, the extinction at an unprecedented pace, but I do unfortunately believe it will continue," said Deborah Weinswig of Coresight Research.
Weinswig thinks high-end malls will likely survive because luxury retail tenants have higher profit margins. Malls with lower priced stores and more vacancies face the highest risk of closure.
"They may survive as something else, but they won't be a traditional mall," she said.
The famed Hollywood and Highland Mall, a popular tourist attraction in the heart of Hollywood, will undergo a $100 million makeover.
"I think for us, we've seen that this is probably more important today than it was a year ago," DJM Chief Retail Officer Stenn Parton said.
Developers of the Hollywood and Highland project are re-designing the five-story complex and renaming it Ovation. There will be less retail and more entertainment and events. About a third of the complex will be transformed into offices on the upper floors, and another third will be dedicated to dining.
It's hoped the open and inviting model will attract locals, tourists and millennials after the pandemic.
"It's really on us as a developer and as an owner to set that stage for brands to figure out creative innovative ways to showcase what they do," said Parton.
According to the National Association of Realtors, of the malls that have closed permanently in the U.S., some will be turned into another retail center, while others will be converted into warehouse and fulfillment centers.