Mall is still top draw for shoppers

Southern Park Mall produces $200 million in annual sales.
YOUNGSTOWN -- The demise of the shopping mall has been predicted many times, but malls in general and Southern Park Mall in particular are doing fine, a mall executive said.
During a presentation Thursday at Youngstown State University, Richard Sokolov showed slides of national news magazines from 1998 that said the Internet was making malls obsolete. Similar predictions were made in the early 1990s because of the popularity of home shopping channels on television, he said.
Malls have continued to thrive, however, with mall occupancy rates and rental rates increasing each year, he said.
"The mall has withstood all of these challenges, and it's going to continue," said Sokolov, president and chief operating officer of Indianapolis-based Simon Property Group.
He spoke to community members, faculty and students as part of the Williamson Symposium speaker series sponsored by YSU's business school.
Wall Street support
One indicator of the health of malls is how their parent companies are treated on Wall Street. Sokolov said Simon's stock has been trading at an all-time high this week, while the combined value of the stock of all publicly held mall operators has quadrupled to $24 billion since 1996.
As malls have retained support from investors, Internet retailers have failed to bring about a promised revolution in shopping, he said. The only pure Internet retailer left is Amazon.com, and all Internet retail sales amount to just 2 percent of the total market, he said.
In particular, Southern Park Mall, which is owned by Simon, shows what has happened to malls, Sokolov said. About 80 percent of the tenants located in the mall 25 years ago are no longer there because many retailers have either gone out of business or been acquired by other companies, he said.
Still, other retailers have stepped in to replace them.
The mall is 97 percent occupied and does $200 million in annual sales, he said.
Much has been written about the number of failed department stores, he said. Twenty years ago, there were 35 independent department store companies with 88 operating divisions. Today, there are 10 department store companies with 20 divisions.
Specialty retailers
Malls have been aided by another trend, however, he said.
Specialty retailers are creating new brands with separate store chains so they can continue to grow sales, he said.
Abercrombie & amp; Fitch, for example, figured the country could support only 400 of its youth-oriented clothing stores, he said, so it created a new brand. It intends to open 800 Hollister stores, thinking Hollister can have more locations because its clothes are less expensive, he said. The company is considering yet another clothing concept, he said.
The creation of new brands has helped boost demand for mall space, which has allowed malls to continue to increase rents, he said.
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