A few years ago, Restoration Hardware had three Denver-area
stores scattered in malls. Today, the furniture chain has just
one new one: a palatial, four-story gallery with a rooftop
Retailers from Gap Inc. to Abercrombie & Fitch Inc. are abandoning a
decades-old strategy of growing sales by blanketing cities with
stores as consumers do more of their shopping online and less at
The shifting shopping habits have prompted chains such
as Williams-Sonoma Inc. and Macy’s Inc. to close stores in secondary malls to focus on web sales
and more upscale shopping centers.
Restoration Hardware Holdings Inc. closed its three older Denver-area stores and last fall
opened the 70,000-square-foot flagship at the Cherry Creek
Shopping Center, an upscale mall that also is home to Burberry and Brooks Brothers.
Restoration Hardware declined to discuss its new approach, but
its change in direction is part of a redesign of the
nation’s commercial centers—a reversal of the
“malling” of America.
“With technology, retailers don’t need that extra
store in a marginal market,” said William
Taubman, the chief operating officer of Taubman Centers Inc., which owns Cherry Creek and mainly operates high-end, or
called “A” malls. That is widening the gap between
the country’s most productive malls and weaker properties,
executives and analysts said.
Once-solid regional “B” malls that thrived for years
are losing shoppers and tenants to the “A”
malls—those with sales per square foot in excess of $500,
according to Green Street Advisors.
The research firm estimates that about 44% of total U.S. mall
value, which is based on sales, size and quality among other
measures, resides with the top 100 properties, out of about
Almost all of the 40 stores that Macy’s closed last year
were in “B” or “C” malls, according to
Green Street. For already weak malls, the loss of an anchor can
accelerate a downward spiral that leads to other vacancies.