[img]509|left|||no_popup[/img]Have you been to the mall lately?
If you are anything like me, the idea of an afternoon at the mall is as attractive as proctologic exam.
I prefer to do my shopping from the comfort of an easy chair.
Although I still am not thrilled with the safety and security of internet shopping, I’m willing to take the added risk if it means I can avoid the mall.
If the current trend of retails closures continues, online shopping may be one of the few viable options open to consumers like me.
As the economic slump has deepened, the number of major retailers closing their doors for good has grown. Among the most recent national retail chains to shutter their stores are Circuit City, Linens ‘n Things, Mervyns and Expo Design Centers.
Circuit City was the victim of its own mismanagement. The rest of these failed retailers, like many other national and regional stores who have recently have filed for bankruptcy were the casualties of leveraged buyout groups that were more interested in liquidating the assets than they were in finding ways to adapt these businesses to survive.
At the height of the boom, investor groups snapped up a host of national and regional chains as means to diversify their holdings. They were attracted by the notion of stable cash flow and real estate assets. As the boom went bust, the leveraged buyers started pulling the plug. To them retailing was an investment opportunity, not a business.
The retail exodus is forcing cities to scramble in the face of lost sales tax revenue at a time when money is already tight. Meanwhile, they're also grappling with how to resurrect the zombie neighborhoods, where many of the remaining merchants complain about declining foot traffic and the eyesores of buildings plastered with “for lease” signs.
[img]510|left|||no_popup[/img]While discounters like Walmart or Costco may have seen their same store sales climb, once thriving retail hubs have become like ghost towns.
Take the example of Dublin, a prosperous bedroom community of 50,000 located to east of San Francisco in Northern California. In the midst of the boom, Dublin added several new shopping centers on its outskirts, supplementing older strip malls downtown. As the economy soured, that older core, along the city’s main thoroughfare started to empty out.
When Mervyns folded around the holidays, followed by Circuit City and Home Depot's Expo Design Center, several of the local “mom and pop” retailers were dragged down with them. A Good Guys store that shut nearly three years ago is still vacant.
During a recent trip through the region, I recall standing in the parking lot of one of Dublin’s many malls. A 360-degree sweep of the area revealed the empty storefronts of several former anchor tenants, their buildings stripped of signs, making it difficult to tell which major retailer once called this area home.
Dublin is not alone. The same story is repeated in cities and towns across the region.
The historical downtown business cores of many small cities like Dublin were first decimated by the upswing in “big box” malls. As customers were siphoned off, traditional local retailers began to disappear along with the many jobs they created.
Now that many of the same “big box” retailers are following suit, these communities are being hit with the triple whammy. The residents have not only lost retail options and the jobs that go with them, but the sales tax revenues that are critical to maintaining their municipal services have also evaporated.
The billions of dollars in the President’s stimulus program may help cities like Dublin to preserve their police, fire and trash collection services. But in the end, it will do very little to help this town, and other cities like it, to regain the vitality they’ve now lost.
For the foreseeable future, it looks like I’ll be doomed to shop from the quiet confines of my laptop.
John Cohn is a senior partner in the Globe West Financial Group, based in West Los Angeles. He may be contacted at www.globewestfinancial.com
