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Platte River Mall faces challenges of changing economyTell North Platte what you think
 
Photo by George Lauby
Photo by George Lauby
Photo by George Lauby
The importance of JC Penney is evident, with its sign near the mall's main entrance.
Courtesy Photo­Image
Cassie Condon

One clothing store at the Platte River Mall – Rue 21 – closed Memorial Day.

Rue 21 operated from a mall storefront on the north wing, about halfway between the two anchor stores — Herberger’s and JC Penney.

During the final days of the clearance sale, remnants of merchandise at Rue 21 were selling for 70-80% off. Clothes and hangers were scattered here and there on the floor, signs of shopping frenzies and carelessness.

In the middle of the mall, a liquidation sale is also underway at JC Penney.

Penney’s is the original anchor store of the mall, but it will close July 31 after more than 100 years in North Platte.

Merchandise is 30% off at Penney’s.

The closings are part of an alarming trend. They come after the closure of Vanity clothing, which filed for bankruptcy, and the closure of a hometown business, Da Buzz coffee shop, that was near the mall’s main entrance. Owner Job Vigil said there was not enough foot traffic to keep his coffee stop humming.

It’s hard to predict the future of the Platte River Mall. This might not be the end of the closures, yet the mall is far from empty -- 20 stores still operate there, plus the AMC movie theater.

Optimistic indications are not overly apparent.

U.S. retailers have been closing stores and filing for bankruptcy at rates not seen since the great recession, according to a May 8 report in Business Insider magazine. Closures this year are the most since 2008, the year of the great recession. The trend of closing retail stores is expected to continue through the year, according to the report.

Four hundred stores of another major Platte River Mall tenant – Payless Shoes – are closing in other parts of the country. The Staples company, which anchors the south end of the mall, is for sale, facing financial trouble brought on by tremendous competition from online retailers.

But despite the challenges, Platte River Mall Manager Cassie Condon is hopeful. She points to the 20 stores in the mall and says leasing considerations are active.

“I am optimistic that things are moving in a very positive direction for us,” she said. “We have several companies currently looking at Platte River Mall, but until the papers are signed, I cannot release who we are working with.”

The mall itself has endured several economic downturns over the years, as well as the competition of Wal-Mart and Menard’s, plus numerous changes in the retail scene, since opening in the early 1970s.

Condon is no stranger to tough times in the business.

She worked for the company that runs the mall, DP Management of Omaha, for five years as assistant mall manager before taking the top post in 2015.

In all, she has more than 16 years of retail experience at the Platte River Mall.

She recently received an award from DP Management for initiative, excellence and dedication. She was chosen from 110 DP employees in eight states for the award.

As consumer’s needs and wants change, retailers are adapting. Some have down-sized their corporate footprint to compete with online means of purchasing goods, Condon said.

The challenges for retailers – even large retailers — have seldom been greater.

One of the world’s greatest investors, Warren Buffett, recently sold his stock in Wal-Mart. Wal-Mart is reportedly investing billions to compete with Amazon.

Buffett said he is getting out of his investments in retail businesses.

“The world has evolved, and it’s going to keep evolving, but the speed is increasing,” he said on May 5 at his annual stockholders meeting in Omaha.

Amazon-type stores now attract online customers who like the convenience of shopping at home. Amazon distribution centers might be half a continent away, but provide good customer service, bolstered by the shipping of United Parcel Service and FedEx. The final miles to rural addresses are often covered by the U.S. Postal Service.

Orders can be sent – and returned and replaced when necessary — to nearly every corner of the country. 

Also, the economy suffers from underlying wage stagnation, forcing shoppers to search for the best deals they can find.

Often they can’t find what they want in a conventional retail store, and can buy it cheaper online, where the selection is massive.

Electronic devices – smartphones and computers – are full of national advertisements that target buyers according to the websites they visit, which merchadise they pause to consider, which facebook posts they like, always urging people to buy more online.

The rapidly evolving marketplace has given birth to a counter-force — the “shop local” movement – reminding people to help support their community by spending money locally.

The problems are not confined to North Platte. Far from it.

The Crossroads Mall in Omaha, where entire wings are empty, is in line to be totally rebuilt. 

“In communities our size, we feel the hit even harder,” Condon said.

Integrating technology through smart phone apps, similar to what Buckle is doing, is a good option.

With a Buckle app, customers can see the new merchandise at the store and reserve it for themselves, from their phone.
The Buckle continues to operate at the Platte River Mall.

Likewise, the AMC movie theater at the mall is revamping their concessions to appeal to customers.

Such tactics help retailers stay ahead of the fast evolving game, Condon said.

 

Rents 

Retail corporations are making business decisions in their board rooms, based on their bottom financial line.

The negative retail factors are fanned by what some believe are extraordinarily high rents for retail space at the Platte River Mall.

Since the mall is owned by DP Management of Omaha, a commercial real estate company, the conventional fear is that mall management companies must charge more than the market will bear for rent, or they will just close the doors.

But somewhat surprisingly, rents at the Mall are below the industry standards.

Nationally, rents for retail space in malls run around $17-20 per square foot, according to an April report in the industry newsletter “Shopping Centers Today.” 

Rent at the Platte River Mall is around $12-15 per square foot, according to another industry publication – Loop Net

Based on those numbers, rent at the mall is about $1,500 a month for around 2,000 sq. ft. 

Condon said lower rents are available for mom and pop and specialty shops through the mall’s “incubator” program, allowing businesses to get their feet wet at an introductory rate.

There is not a vast surplus of vacant retail space waiting to be filled, according to the Shopping Centers report. Despite closures of chain stores, less than 10% of retail space in shopping malls across the country is empty, SCT said.

It will be important to see what happens at the Platte River Mall, and by extension, to cities such as North Platte.

The challenges have seldom been greater.

 

(This report was first published in the Bulletin's May 24 print edition.)


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The North Platte Bulletin - Published 6/5/2017
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