Economy

Sunland Park Mall plagued by vacancies as Macy's closure looms

Sunland Park Mall plagued by...

EL PASO, Texas - As Macy's prepares to shut its doors at Sunland Park Mall, what's in store for the mall's future?

In January, Macy's announced it would be closing 68 of its stores across the United States, including the store inside Sunland Park Mall.

For years, Macy's occupied the 105,000 square foot space. The store opened in 2004 and employed 71 associates. It's still unclear how the mall plans to replace Macy's.

In a news release, the company said the closures would "streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy."

Terry J. Lundgren, chairman and chief executive officer of Macy's, issued the following statement at the time:

"Over the past year, we have been focused and disciplined about making strategic decisions to position us to gain market share and return to growth over time. While we are pleased with the strong performance of our highly developed online business, as well as the progress we have made on selling and visual presentation programs and expense reduction initiatives in 2016, we continue to experience declining traffic in our stores where the majority of our business is still transacted. Given the overall trends challenging us and the broader retail industry, and the time needed to execute new strategies, we expect our 2017 change in comparable sales to be relatively consistent with our November/December sales trend."

Lundgren added its strategies have evolved based on the changes in our customers' shopping behaviors, including a focus on buy online, pickup in store and mobile-enabled shopping.

Online shopping is considered a factor in store closures. In fact, according to a Pew Research study, 8 in 10 Americans are choosing to shop online instead.

While stores lose customers to the rise of online shopping, a recent article by Business Insider, sheds light on dying malls across the country and the bigger problem at hand: finding replacement anchor paces. With anchor stores like Macy's, JCPenney and Sear's closing, it has become increasingly harder for malls to find stores willing to pay rent.

In some recent cases, the loss of an anchor store has meant the closing of the mall altogether.

In El Paso, Cielo Vista Mall has several anchor stores including Macy's and JCPenny, but was not hit by the recent wave of closures. At fairly new shopping centers like the Fountains at Farah and the Outlet Mall, there's no hint of any major shutdowns anytime soon. A walk inside Sunland park Mall shows a different story. There are at least 14 vacancies, not including Macy's which is still in the process of selling what's left before closing for good.

"There are periodically going to be big changes in terms of who the dominant players on the corporate landscape are," UTEP Business Professor Dr. Tom Fullerton said.

Dr. Fullerton tells ABC-7 malls facing major closures have two options: sink or swim. 

"It wouldn't be surprising if some of these places closed down and then the whole structure has to be revamped," Dr. Fullerton said.

Two major examples are the former Northpark Mall and the former Morningside Mall, now YISD headquarters.

Other malls like Basset Place have made a comeback.

"They've gone through several changes, but they've continued to identify uses of that properties that can be implemented," Dr. Fullerton said.

SLIDESHOW: VACANCIES AT MACY'S



"Sunland Park Mall continues to evolve by providing shoppers with the brands they seek. We look forward to continuing to expand our retail mix with exciting new additions in the future," Mary Castillo, general manager of Sunland Park Mall told ABC-7 in January.

Officials with Sunland Park Mall still wouldn't confirm what will replace Macy's, or any of the other vacant spots, but did tell ABC-7 in a statement: “Brands come and go and that has always been the case in the retail industry. When there is a store closing, we actively seek to introduce new retail, food or entertainment options that enhance the property. We will continue to welcome new shopping and dining choices, as well as offer community events for the whole family to enjoy,” Mary Castillo, General Manager of Sunland Park Mall said.

Dr. Fullerton says the mall could choose to go in the direction of adding more entertainment. 

"Some of it will be alternative uses and more entertainment employment of that space," Dr. Fullerton said.

While he doesn't rule out the idea of a closure altogether, he says the benefit of the El Paso regional economy is growth, both demographically and economically, meaning the demand for retail facilities will be there, so long as companies adapt to meet the customer's needs. 

"The one constant in terms of the retail landscape in the United States, is ongoing evolution."

Macy's at Sunland ParK Mall is set to close this spring.


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