Independent Retailers: The Future of Malls?

Shopping mall landlords may be re-thinking their common aversion to small, independent retailers as tenants since a wave of bankruptcies have wiped out dozens of U.S. retail chains.

Normally, the preference is for national chains in shopping malls, as they provide proven track records and credit profiles. The prospect of taking a chance on an unknown, independent retailer or numerous small tenants for malls is a high-risk venture that is daunting to most. But with malls facing a dramatic increase in vacancy rates, many landlords are being forced to re-evaluate their choices. Independent stores are starting to look much better than ever.

It’s been said that although taking a chance with an independent retailer means the credit could be questionable, currently, landlords are burdened with an inability to rent out spaces in their malls – in some places, a 30 percent vacancy. Getting rent money through alternative means is becoming a necessity.

The one advantage independent retailers offer is a chance for malls to differentiate themselves. In a country where malls across the country tend to be exact replicas of each other, this advantage cannot be underestimated. The opportunity is clear: the dawning of a new era is near.