The party’s over at the River Oaks West Shopping Center in Calumet City, where a recently shuttered Party City big-box store neighbors a recently closed big-box Big Lots store.
Those long-standing chains recently went bankrupt, shutting down all their stores nationwide.
The closures have caused the vacancy rate to rise at the outdoor mall across Torrence Avenue from the River Oaks Center. Once one of the Calumet Region’s premier shopping destinations, it is now saddled with empty department stores, pocked with vacant storefronts and left with an eerily nearly empty food court.
The vacant Party City across the street sits next to a vacant Petco, which is flanked by an empty Bed, Bath and Beyond on the other side.
While the River Oaks West Shopping Center is still home to Ross Dress for Less, Shoppers World, Sam’s Club, Mission Dispensary and other retailers, the vacancies have been spreading and the cars in the vast parking lot have been thinning out.
It’s been a challenging time for traditional brick-and-mortar retail.
Shopping centers, ranging from strip malls to power centers to enclosed shopping malls, have had to adapt or die as e-commerce has gobbled up greater and greater market share and private equity firms have swooped in and brought up many long-standing retailers that they end up liquidating when there’s no longer enough profit to extract.
The research and advisory firm Coresight Research reported that 7,325 stores closed last year, the most since the coronavirus pandemic started in 2020. It projects store closures will escalate to 15,000 this year.
“For retail malls and shopping centers to remain competitive, they will need to provide services that cannot be provided through e-commerce,” Indiana University Northwest Director of the Center for Economic Education and Research Anthony Sindone said. “It is all about value for the customers. Value is not exclusively price centered. The stores within these centers might consider innovative ways to make the customer experience unique compared to simply shopping online.”
Hobart Mayor Josh Huddlestun has been working to modernize the retail trade area around the Southlake Mall by making it more entertainment-oriented, such as by bringing in a Top Golf-like driving range and other athletic facilities.
The Southlake Mall in Hobart remains mostly occupied but was saddled with the empty Sears and Carson’s department store spaces it does not own after those chains went bankrupt. California-based Cubeworks has been looking to turn the old Carson’s space into a flexible workspace, pop-up shops and warehousing.
The Dick’s Sporting Goods was partially taken over by Kid’s Empire, an entertainment center that hosts birthday parties and where kids can play. The former Gander Mountain was also briefly turned into Glow, an interactive entertainment center that had bounce houses, a glow-in-the-dark maze, Instagrammable photo opportunities, ax throwing, sumo wrestling in padded suits and a beer and wine garden.
In recent years, Southlake Mall has also filled empty storefronts with arcades, shooting galleries and other interactive entertainment options.
Entertainment will play a bigger part in shopping centers in the future, Sindone said.
“I say this because our population seems to want to be entertained as well as enjoy the utility of whatever they are purchasing,” he said. “Just look at the impact of social media influencers on people making purchase decisions. The entertainment part of any product demonstration grabs the customer's attention and drives at least some of the viewers to buy whatever they are selling. Maybe the brick-and-mortar stores should learn from that example.”
The Circle Centre Mall in downtown Indianapolis, one of the premiere shopping centers in the state, is now being redeveloped to include more outdoor space, offices and multifamily housing. It’s already home to the Indianapolis Star newsroom, which took over a former department store space. The moribund Fair Oaks Mall in Columbus, Indiana was transformed a few years ago by Columbus Regional Health and the city of Columbus into NexusPark, which still has retail and restaurants but also became a public health destination with medical and wellness offices, an indoor sports fieldhouse, community spaces and a Columbus parks and recreation department office.
In Northwest Indiana, more and more retail spaces have been converted into light warehouse use in shopping centers like the 5150 Plaza in Merrillville, the Griffith Park Plaza and the Pavilion on 45th Street in Munster.
Malls will have to look at reimagining more space, like the way the Hawthorn Mall added apartments in Vernon Hills, Illinois, said David Lasser, principal with Merrillville-based Commercial In-Sites, one of the leading commercial real estate firms in the Region.
Many malls have lost anchors as department store chains have shrunk their footprints or gone out of business altogether, leaving malls without the big draws that brought traffic for the smaller retailers like Sunglass Hut or Wetzel's Pretzels. The Marquette Mall in Michigan City, the Century Mall in Merrillville and the Woodmar Mall in Hammond are among the casualties in Northwest Indiana. The Village in Gary is barely hanging in with its most popular draw being the Chuck Wheeler’s hot dog stand.
“The anchors are just gone,” Lasser said. “There’s been an enormous shift from enclosed regional malls to power centers like the Crossings of Hobart or Highland Grove. The Southlake Mall is the second largest mall in the state with 1.2 million square feet but the Crossings at Hobart was just as big when it was built.”
Big-box retailers like Best Buy and Sam’s Club have gravitated toward outdoor malls. Commercial landlords like them because they can subdivide the space to fit whatever tenant mix is available. Customers have come to prefer them because they can drive up to the particular store they want to visit, get what they need and go.
Retailers that were long confined to malls recently have starting opening in power centers like the new Macy's in the Highland Grove Shopping Center or the Victoria Secret's in the Town Square Shopping Center in Schererville. Longtime mall favorites Auntie Anne's and Cinnabon recently opened a standalone dual-branded restaurant in Crown Point.
“It’s just the convenience of going to whatever store you want,” Lasser said. “The business model of the mall was to have foot traffic walking around but people prefer to pull up to wherever they want to go, especially when they can just buy it with e-commerce.”
However, malls like Southlake and Lighthouse Place Premium Outlets however have continued to remain relatively strong as regional draws, Lasser said.
“Malls rely on total population and demographics,” he said. “A lot of business models depend on having 100,000 people within five miles or a certain density within one mile or five miles. But malls might not be able to sustain the existing square footage, especially with anchors that are similar to each other and aren’t independently unique enough to compete on their own.”
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