US Luxury Malls Growing, while More Affordable Shops Struggle

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Upscale shopping centers in the United States are thriving, while their inexpensive counterparts suffer from store closures. Shopping hubs housing expensive shops like Louis Vuitton and Gucci are seeing good business growth despite the difficulties caused by changing consumer shopping habits. Bloomberg explains that one reason for this is that most luxury brands have not moved to e-commerce yet. The high price of luxury products makes buyers reluctant to shell out money online, so going to malls is still preferable. On the contrary, customers’ shift to online shopping is causing a decline in patrons of inexpensive malls. Mall foot traffic has started to drop since August 2018, according to analytics firm Thasos. In addition to this, research and advisory firm Coresight Research reported that 5,994 stores faced closure in 2019 partly because people now prefer online retailers. The trend has caused American department store chains Macy’s and JCPenney, which usually occupy big spaces in shopping malls, to close some stores nationwide. In November last year, Sears, another department store giant, announced that it will also close some branches this February. These store closures hurt malls since they mostly depend on their tenants for profit. As cheaper malls experience a downward trend, luxury malls are hoping that they will be able to sustain good business. One of the luxurious malls thriving in the United States recently is Taubman Centers. The company’s chief operating officer, Bill Taubman, believes that being interesting and distinct is the key to success in the retail industry. To that end, the company makes sure that it customizes its malls to match each of its target market’s preferences.