One of the most confounding life lessons many of us eventually learn is that you hardly ever know you’re in the good times until they’re over.
Andy Bernard from “The Office” may have phrased it best when he said, “I wish there was a way to know you were in the good old days before you actually left them.”
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For many retailers, this sentiment rings true.
Take a look at your local shopping mall, central plaza, or even Main Street downtown.
There is a good chance that, 10 or so years ago, these centralized shopping hubs were bustling with customers and gleaming “Open” signs, signifying a thriving commercial culture.
Now, however, those days might be largely behind us.
There’s a better chance that, today, your local shopping mall stands largely unoccupied or underutilized.
Your central shopping plazas are filled with vacancy or for-rent advertisements, or are instead home to one or two large, national big-box stores.
And your downtown Main Street may even be boarded up.
Torrid is closing nearly 200 stores.
Image source: Getty
Mall retailers hit the hardest
But things are particularly dire in the indoor shopping area.
It’s estimated that just under 9% of total available mall space in the U.S. lies vacant or un-leased.
This is expensive for mall operators, but it’s also costly for the tenants that already operate in malls.
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That’s because malls typically charge outsized rent to their tenants for the opportunity to get more exposure to foot traffic.
The more foot traffic a mall gets, the more foot traffic mall stores get. And that activity typically converts into sales.
But that’s not the case when people stop coming.
As malls decline in popularity and folks opt instead to shop online or at discounters closer to town, profits dwindle.
Which makes it even harder to justify paying those high rents for diminishing returns.
Popular mall retailer closing stores
And now, the popular clothing store Torrid is closing up to 30% of its footprint as sales decline, particularly in shopping malls.
Torrid mostly caters to plus-size women, specializing in sizes 10-30.
About 65% of Torrid stores are located within shopping malls, and around 60% of its leases are coming up for renewal shortly.
Meanwhile, current estimates say up to 70% of Torrid’s new demand comes from online shoppers.
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This means that operating out of shopping malls is a decreasingly lucrative model for the company.
So Torrid announced it would shutter roughly 180 stores as it works to renovate its shopping model.
The brand currently operates over 630 stores.
Despite the closures, Torrid CEO Lisa Harper maintained that the brand is in a “strong financial position.”
Torrid plans to refresh about 135 stores in an effort to attract and maintain remaining brick-and-mortar customers.
