By Leah Dearborn
At 11:45 a.m. on a Friday, the food court at the Square One Mall in Saugus was quiet. Approximately two dozen tables sat unoccupied, and only the occasional passerby frequented the aisles between stores.
A trip around the building revealed much of the same. Clothing store Madrag had only three customers perusing racks of discounted shirts, and Sears—one of the flagship stores— wasn’t much busier. A massage parlor on the second floor was quiet with only a single employee sitting in dimmed lights.
Drive only about 10 minutes north to MarketStreet Lynnfield, the open-air shopping center that opened in 2013, and you will encounter a very different, very lively, scene.
“Today it’s just a convenient meeting place,” said MarketStreet shopper Laurie Smith, who estimated that she frequents the center approximately once a month.
Smith clearly isn’t the only one who sees the center as a convenient meeting spot. A visit to MarketStreet at noon on a weekday paints a picture of professionals talking business and friends catching up over lunch at one of the outdoor center’s multiple restaurants.
Within the past few years, upscale retailers Williams-Sonoma and Pottery Barn have fled the Northshore Mall in Peabody (owned, like Square One, by Indianapolis-based Simon Property Group Inc.) and relocated to MarketStreet.
Beth Johnson, an associate at the Williams-Sonoma in Lynnfield, said the store exited the Northshore Mall two years ago because sales at the location were dwindling.
According to statistics produced by real estate research firm Green Street Advisors, more than two dozen enclosed shopping centers closed across the U.S. between 2010 and 2015. If both customers and retailers are leaving indoor malls, are lifestyle centers like MarketStreet to blame?
Michael Tesler, consultant at Retail Concepts and lecturer at Bentley University, doesn’t believe direct competition from lifestyle centers is the main source of sloping sales at indoor malls.
“The malls have been on a downward cycle for 20 years,” said Tesler. “The issues are far beyond and above the opening of MarketStreet in Lynnfield. Although, it doesn’t help to have something kinder and more current for consumers to go to.”
Instead, Tesler blames a number of factors, including online shopping and a lack of diversity between the types of stores represented in indoor malls. As it turns out, there can be too much of a good thing.
“In the 1990s, Gap was everything to everybody,” said Tesler. “Now it’s close to nothing to nobody.”
When Macy’s declared in August that it would be closing 100 stores nationwide, investors hailed the decision as a smart move in a country that has more physical retail space than it needs or wants. Green Street Advisors estimated that the chain would need to close each of these locations to bring Macy’s productivity levels back to where they were in 2006.
As Simon’s largest tenant, news of Macy’s closings caused a two-percent share drop that day, which rebounded by the week’s end. During the company’s May earnings call, Simon officials noted that only one department store vacancy existed in its entire portfolio.
When asked whether he believes indoor malls will ever disappear completely, Tesler said he didn’t believe so. It’s more likely, he said, that they will continue trying to adapt to mixed success. Some might open up to become partially outdoor centers, while others might add more restaurant or food shopping options in mimicry of the Whole Foods partnership that has made many lifestyle centers so successful.
The decline of the indoor mall is a nuanced issue, and comparing such drastically different shopping locations can be a bit of an apples-to-oranges exercise no matter how you slice it.
“I grew up going to Square One Mall, but MarketStreet caters to a different tier of shopping,” said Lynn resident Jazzmin Bonner, who frequently visits Square One for its Macy’s and Forever 21. “I don’t think there’s any way they could put Northshore and Square One out of business.