Madison malls change with the times

How local malls are adapting to national trends

As national and local shopping habits change, large scale shopping malls around the country are trying to change with them. Some are doing so successfully, while others are dying off.

According to a national report on shopping malls provided by Green Street Advisory Group, roughly 2,500 retail stores closed in malls in 2017 alone. Another figure suggests that 20-25% of shopping malls will completely close within five years.

Madison’s West Towne Mall opened in what had been a cow pasture in 1970, and its sister mall East Towne opened a year later. On the city’s near west side, the Hilldale Shopping Center opened in the early 1960s. The traditional model for successful shopping centers really didn’t change for the next 30 years. It generally consisted of anchor stores, kiosks, long corridors of smaller retail stores, and a food court.

Madison malls change with the times

“That’s the format that was around in 1970, 1985, and 1998 and it’s still around today,” says University of Wisconsin marketing lecturer and business consultant Moses Altsech, “but it’s no surprise that it’s not cutting it anymore.”

But things started to change in the early 2000s. With the emergence of the internet and online shopping, malls had to get creative.

The first to make an about-face from its traditional stance, was Hilldale. After financial hardships, including a foreclosure in 2011, the mall found new ownership in the form of Massachusetts-based WS Development. The company then successfully transformed the mall into an outdoor, street style shopping experience with pedestrian walkways, landscaping, and eateries. It still has a traditional anchor store, but is also buoyed by the presence of nearby residential housing.

“They completely reinvented it”, says Altsech, “look at it now, look at it 10 to 15 years ago, look at it today. It’s a new place, you wouldn’t recognize it.”

Hilldale now boasts 60 stores, 40% of which it says are locally owned, which makes it especially appealing to the Madison’s near-west side shoppers.

“That took a lot of investment”, added Altsech, “and it took a vision first of all to try to figure out what will get people to come here and stay here.”

Soon Hilldale will add a large L.L. Bean store, and with warmer weather will again bring back its farmer’s market in 2018, along with outdoor entertainment and other family-friendly options.

Madison malls change with the times

Less than 4 miles away, West Towne Mall is undergoing a massive transformation. CBL Properties owns West Towne, East Towne and roughly 100 more mall properties around the nation. It’s watched retail numbers suffer and its own stock price drop by more than 50% since the beginning of 2017. The opening of a Dave & Buster’s Restaurant, a Total Wine Store are recent additions that are part of a changing landscape at West Towne.

“It’s more experienced-based actually,” says Dave & Buster’s general manager Jim Schiavo. “less shopping, retail-based and it seems like a national trend going on right now.”

Dave & Buster’s has taken the place of vanishing or shrinking Sears stores around the country. Madison’s west side sports and entertainment venue is one of 10 Dave & Buster’s that are opening in 2018. That’s after 14 of their restaurants opened in 2017 around the country, half of which were located in shopping malls.

“We require a big footprint,” says Schiavo, “this is over 31,000 square feet, a lot of parking and it’s just a natural, it’s a great fit with West Towne Mall.”

West Towne Mall general manager Megan Ballard has been with the company for more than a decade, and is well-aware of what it will take to keep such places financially viable.

It’s #ThrowbackThursday! Who remembers the women’s apparel store, Marianne’s? This photo is circa October 1970! #MakeItYours

— West Towne Mall (@ShopWestTowne) March 23, 2018

“You’re seeing this evolution happen across the country,” says Ballard, “CBL has been very proactive in purchasing anchor stores where it made sense starting a redevelopment process.”

While CBL does not own the Sears redevelopment at West Towne, it is on board with the changes it’s seeing in the early months of 2018. Ballard says at CBL, 75% of the new leases executed by the company at its properties were non-retail.

“We are focusing a lot more on experience. Places like Dave & Buster’s, and having fun with your family, as well as new dining and a place like Total Wine. That’s really where things are headed,” says Ballard.

With uncertainty surrounding Boston Store locations at West Towne, East Towne and Janesville Mall, it doesn’t appear that the challenges at major malls in the state are going away anytime soon. Anchor stores are slowly going the way of the dinosaur. Boston Store, JCPenney, Sears, Kmart, Macy’s, Toys R Us, all have announced store closings in recent years.

Ballard says CBL has begun fielding offers from companies interested in redeveloping the Toys R Us store, and should have an announcement soon on a new occupant for the recently closed Granite City Food & Brewery.

For children of the 1970s and 1980s, malls were a place for first dates, a place to hang out with friends, and often you couldn’t tell one from another even if they were 1,000 miles apart. Some featured packed arcades, movie theaters and even ice skating rinks. Many of those now look like ghost towns.

“For some of them it may be too late”, says Altsech, “there’s one in downtown Milwaukee, you could shoot an episode of the Walking Dead in there. But it doesn’t have to be that way.”

Altsech says Hilldale is an example of how with the right amount of investment and creativity, an old mall can be re-invented. Ballard says West Towne and East Towne continue to be places that the community gathers, and she says despite all the talk about Amazon derailing retailers, 85% of all retail sales are still being done inside physical stores. So while malls continue to struggle and anchor stores die off one-by-one, malls are simply changing with the times. In many cases there were too many of them. But in Madison, the two big ones, and Hilldale remain viable.

“People who have predicted the demise of the malls and you know they’re measuring the malls for a suit to bury it in, that’s a little premature” says Altsech, “in fact it’s a lot premature.”

“Shopping centers are still very viable, certainly West and East Towne are. We have a lot of positive things going on,” says Ballard, “we’re changing with the times.”