By Scott Lippert, Esq.
I recently read an article suggesting that new retail brands will be launched on-line, rather than in new stores. This may well be the case, given the cost savings in creating a virtual store, rather than investing in multiple bricks and mortar locations. The author predicted dire consequences for shopping malls. I’m not ready to write them off just yet. I am reminded of the prognostications of doom and gloom for the office sector that we heard some twenty years ago: there would be no need to rent costly office space; people would work from home and meet only when necessary via video-conferencing. While some of that has occurred, it certainly hasn’t had a significant effect on the office market.
My own unscientific, purely anecdotal experience is that people like shopping malls too much to abandon them. I may have a skewed view of this, having grown up in Paramus, the Mecca of shopping malls. Paramus has no downtown. If you want to go out and see your neighbors (in a climate controlled environment, no less), you go to the mall. You may have no intention at all of buying anything. On the other hand, once you’re there, you just might pick up a few things.
I see no impact of this purported trend at all on food and entertainment uses. Clothing and gadgets might be another story, especially if your are able to try on or try out merchandise at a small sample store and then order the goods from a remote warehouse, which apparently is a very important feature of this new model. But, I think people will still go to the mall just to go, and while there, may still want to purchase goods after going to a restaurant or seeing a movie. It’s way too soon to anticipate the collapse of the retail real estate sector. Or is it? After all, I read the article that I’m referring to on line and Newsweek just stopped publishing a print edition.