According to a recent article from CNBC, Simon Property Group, the single largest mall owner in the US may have a plan to rescue retailers on the brink of failure. We’re looking at Simon as one of a few new models to address what’s been called the “retail apocalypse.”
CHANGING MODELS, CHANGING ANCHORS: SIMON PROPERTY GROUP
Instead of offloading anchor responsibilities to retailers, owners can choose to consider themselves the brand. Several models exist, including creating mixed use, conversions to residential properties, and even adapted for educational use. David E. Simon, Chairman and CEO of Simon Property Group talks about the evolving role of owners. During the company’s Q318 earning’s call, he talked about retiring the concept of big department store anchors, saying that they’re no longer necessary. Having taken ownership of “driving traffic to the center[s],” owners also re-take control for the asset’s success.
As part of taking control over the asset success, Simon Property Group has more recently entered into relationships with tenants, buying into brands they believe have sufficient volume and traction to survive downturns. In a recent interview, Simon declares that his team is “certainly as good as the private-equity guys when it comes to retail investment.”
A MALL ANCHOR CAN BE SOMETHING BESIDES A HIGH-END RETAILER
Outside the US, malls view anchors entirely differently than solely the high-end retailers upon which the American retail commerce model was built. Non US malls have been successfully anchored by discounters and non-traditional commercial entities.
More than ten years ago, retail expert Richard Green of Westfield witnessed the success of Australian malls not anchored by high-end retailers. Outside the US, venues combine conventional retail, department stores, discounters, grocers and even fishmongers, according to reporting by National Real Estate Investors, experiencing great success. Green launched this new model stateside, and it’s working.
Simon has positioned itself at center stage in redefining retail, specifically omnichannel, to “incubate and grow partners from market segments as makers, pure play e-Tailers & fresh culinary concepts.” They’ve also taken a multi-layered approach to the marketplace, incubating innovation to “transcend traditional retail.”
While we can never go back to the original mall models, we’re a long way from an apocalypse.