Macy's and Victoria's Secret owner are abandoning the dying American mall in a bid to boost sales
- Macy's and L Brands discussed plans to pivot to more off-mall stores in earnings commentary this week.
- Macy's has been closing unprofitable mall-based stores and testing new storefronts away from malls, such as Market by Macy's.
- L Brands said Wednesday that around 47% of its Bath & Body Works stores are now located outside of malls.
Macy's and L Brands are retreating from the American mall.
In first-quarter earnings commentary this week, the two retailers discussed plans to focus on more off-mall locations.
Macy's is "continuing to test and expand" its presence away from malls, CEO Jeff Gennette said on a call with investors on Tuesday. The company is opening five new locations away from sprawling malls, including Market by Macy's, its trendy concept store.
Meanwhile, it has been closing unprofitable mall-based stores and investing in only the "best malls" as part of its three-year "Polaris" turnaround plan to cut costs and boost growth.
L Brands, the owner of Victoria's Secret and Bath & Body Works, said in its first-quarter earnings commentary Wednesday that around 47% of its more than 1,700 Bath & Body Works stores are now located in off-mall locations. It is expecting to open 50 new locations outside of malls this year and close between 20 to 40 mall-based stores.
The American mall has been in gradual decline over the past decade as consumer shopping habits have changed and more people shift to buying online, which has only be exacerbated by the pandemic.
Large department store chains such as Sears and JCPenney, which were anchor stores in many of these complexes, have fallen into bankruptcy and left giant holes to fill. As a result, Coresight Research estimated that around a quarter of malls in the US will close down in the next three to five years.
Because of this, many retailers are now scrambling to get out of malls and better position themselves for growth in the future.