The large department store of yore is a dying breed. Shopping mall sites once reserved for big-box department store brands, which range from 80,000 to 250,000 s.f., are now repurposing those spaces for either entertainment-based concepts or restaurant/food hall tenants. So what will become of the large department store mall brands? They are still around, and currently in expansion mode, but with a new small-format prototype for today’s errand-minded customer who seeks quick convenience when shopping.
Look for suburban neighborhood power centers and strip center sites, especially those with a dearth of higher end tenants, to primarily be targeted for these smaller department store brands. The preferred customer is the mid- to upper income bracket female shopper who has migrated away from urban metro shopping, as well as the suburban-based luxury aspirational-minded Gen Z and millennial customer. Smaller prototypes open up more real estate options for these department store brands, while reducing overhead costs for labor, rent and utilities. Look for Burlington, Kohl’s, Macy’s and the brand-new Amazon Style to all be opening more of these smaller-sized department stores in the years ahead.
Burlington has strong expansion goals for its smaller-format stores, which are in the 25,000-s.f. range, as it anticipates opening about 120 new units in 2022, followed by approximately 140 new stores per year until at least 2025. Seeking sites in all markets of the U.S., the off-price department store brand will target freestanding, inline and anchor units in strip malls, grocery-anchored power centers and traditional malls with other off-price co-tenants, such as T.J. Maxx and Ross. Ideal locations should have a population of at least 200,000 within a 10-mile radius for rural trade areas, within a five-mile radius for suburban trade areas and within a three-mile radius for downtown urban trade areas.
Kohl’s will be opening up 25 new smaller-format stores per year over the next four years, starting in 2023. As for this year, look for five of these smaller 35,000-s.f. units to open, with a new store expected this summer in Bonney Lake, Wash., and four more this fall in Lenox, Mass., Tacoma, Wash., San Angelo, Texas, and Morgantown, W. Va. New sites targeted will be in strip malls, standalone buildings and power centers in smaller, more rural areas where the brand does not have a presence. The smaller size allows Kohl’s more flexibility with accommodating potential sites in new regions. Kohl’s has been testing out this smaller store concept in 20 select regions over the past five years to much success.
Although Macy’s still expects to permanently close one-fifth of its total large format stores, the brand will open up to 10 more of its smaller-format units for the duration of this year. This will include a mix of its various brands, including Market by Macy’s, the discount-minded Macy’s Backstage and Bloomie’s. A new Market by Macy’s, the sixth one in the U.S., which sells a limited number of select curated items, including more locally known brands, will open by mid- to late 2022 in the Johns Creek Town Center power center in Suwanee, Ga. It will take over the former 31,000-s.f. Stein Mart, positioning itself with co-tenants such as Lowe’s, Sprouts Farmers Market and Michaels. In May, a third standalone Macy’s Backstage opened with a 22,000-s.f. unit at Simon Properties Group’s Grapevine Mills indoor mall in Grapevine, Texas.
At the moment there is only one Bloomie’s store, the spinoff of Bloomingdale’s that opened in August in a 2,000-s.f. unit in the Mosaic District street-front shopping center in Fairfax, Va. The Bloomie’s prototype tests out new technology meant to assist shoppers, including dressing rooms that feature buttons for quick assistance, as well as a front desk format that has a drop box for returns, and an alteration servicing area.
Even Amazon has entered the small department store space, opening its first such prototype, called Amazon Style, in May in the Glendale, Calif.’s The Americana at Brand outdoor mall. The unit, at 30,000 s.f., sells apparel, accessories and shoes for both women and men. The store is meant to keep shopping easy for its customers using modern technology. For example, the sales floor features only one of each item available for purchase, and the customer will then scan its QR code for available colors and sizes. Using a touchscreen, the preferred sizes and colors are then provided at the fitting room by an associate. Its co-tenants at the outdoor mall include Apple Store, H&M and a Sprinkles Cupcakes and Ice Cream. Amazon Style is opening a second store in the Easton Town Center mall in Columbus, Ohio. It will be in the 26,000-s.f. site of a former Forever 21 store. Rumors are circulating that new Amazon Style stores may pop up elsewhere in Northern or Southern California suburban sites.
[Editor’s note: new information about Amazon Style locations has been made available since the original publication of this article.]
