Macy's closing new blow to a mall some call dead

Posted: January 07, 2010

Burlington Center was packed on the day it opened in 1982, according to Deanna Walls, then a young clerk at the Barbara Moss clothing store. Yesterday, she browsed a mall largely void of shoppers.

"Those were the days, and now this mall is dead," she said. "It seems like they have all junk stores in here."

Macy's, one of the mall's three anchors, announced Tuesday that it was closing its 185,000-square-foot store in the Burlington Township mall, citing underperformance.

The closure is another hit for a mall that shoppers, tenants, and industry analysts yesterday described as dead. The mall, on Route 541 between Burlington and Mount Holly, has few national retailers and many vacant stores.

Marketing manager Sunshine Lewis said the mall has a life cycle that follows the economy. "For us, it's a new opportunity for a different anchor to be here," she said.

Calls to owner Jager Management were not returned. Lewis said the privately held company owns two other malls in nearby states. Burlington Coat Factory, Boscov's, and JC Penney Outlet anchor Fairgrounds Square Mall in Reading, Pa. The anchor spaces at Mountaineer Mall in Morgantown, W.Va., are vacant except for one used as a call center.

Jager Management is a small player in a business in which even large companies are struggling to hold their own. The availability of cheap commercial loans before the 2007 credit crunch fueled an explosion of shopping-center construction - and competition for customers.

The purchasing power of residents near the mall is considered very strong for retailing. The average household income is $82,000 - above average for the region, said industry watcher Jonathan Miniman, senior vice president and senior analyst at ING Real Estate Securities in Radnor.

But shoppers are taking their money elsewhere.

Deirdre Bush, 22, and Johan Session, 25, said they shopped at Burlington Center as teenagers when it was home to the Gap and other stores that catered to their age group. Yesterday, Session stopped by for a haircut. The couple does their shopping these days at Cherry Hill Mall.

Burlington "doesn't really have anything," Bush said.

Aside from the prevalence of vacant storefronts, shoppers said the mall looks almost exactly as it did on opening day. The elephant water fountain outside the two-story Macy's store was flashy years ago, Walls said. But it's competing with a $200 million makeover and a new Nordstrom at Cherry Hill.

Pennsylvania Real Estate Investment Trust, a Philadelphia company with properties up and down the Atlantic seaboard, owns Cherry Hill Mall as well as Moorestown Mall, which is a 15-minute drive from Burlington.

Larger mall companies have the power to access loans needed to launch multimillion-dollar renovations, negotiate strong leases with the largest retail chains, and attract investors, Miniman said.

Macy's spokesman Jim Sluzewski said the decision to leave Burlington Center was part of a yearly process to cull poorly performing stores from the company's roster while opening new ones.

Closing sales start Sunday and will continue for about 60 days or however long it takes to sell the merchandise, Sluzewski said.

Burlington Center has adjusted to the exodus of national retailers by billing itself as friendly to mom-and-pop stores. Many are specialty stores that don't depend on the mall's foot traffic.

Shoppers can have their eyebrows trimmed at a busy threading kiosk in the center aisle, spend the day working on crafts at Scrap That! 2, or buy custom-made African clothing.

Lawrence Kauffman has sold eyewear at Eyedeals since 2001 and relies on repeat customers. He's hoping the mall will bring in a lower-end department store that might attract customers.

For now, he said, "I think they drive right by it, and they go to places where they can do more shopping."

Burlington Center was the last enclosed mall to be built from the ground up in the Philadelphia area before the trend shifted toward open-air centers with big regional draws, according to retail broker Steve Gartner, president of Metro Commercial Real Estate, which has offices in Mount Laurel and Conshohocken.

Built to fill a geographic hole between Cherry Hill and Princeton, "it was a mall that never did big business," Gartner said.

The mall and the owners of Macy's tangled in court in 2007 over efforts to add a liquor store and at least one restaurant to the flagging property.

Macy's owner claimed a say over how the property could be used, according to a complaint that GP Burlington L.L.C. filed in federal court. The case was settled in March.

Contact staff writer Chelsea Conaboy at 856-779-3893 or cconaboy@phillynews.com.

Inquirer staff writer Maria Panaritis contributed to this article.

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