Detroit's malls suffer in recession

June 19, 2010 at 5:29 PM
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DETROIT, June 19 (UPI) -- The city of Detroit is scarred by an all-too-common sign of the recession: once-prosperous shopping malls facing closure or bankruptcy, observers say.

The lingering financial malaise has seen at least three that thrived in the city in the 1990s close or see occupancy levels fall to 60 percent, The Detroit News reported Saturday.

Some of the city's older malls have seen business decline as newer centers and big box retail stores go up in other areas, the newspaper said.

The impact is on more than just the mall, one expert says.

"A dead mall really benefits no one," Paul Bensman of Details in Retail, a retail consulting company, said. "It's not good for anyone -- not the communities they're in, not for the retailers."

Many shopping centers are at risk of being "dead malls," which defines as having "a high vacancy rate, low consumer traffic level, or is dated or deteriorating in some manner."

A mall with a 25 percent to 30 percent vacancy rate or a center with anchor stores that have been closed for a year or two raises red flags, retail consultant Ken Nisch says.

Illinois-based Sears Holding Corp., whose stores anchor many malls, often finds itself the last occupant of dying malls.

"We try not to abandon communities, but once the malls close, it gets harder to stay open," Sears spokesman Chris Braithwaite said. "Sears' first choice is to stay open as long as it's feasible to do so."

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