Retail Unwrapped from The Robin Report

Southdale Center Turns 70; Then What?

Sanford Stein — Thu, 26 Feb 2026 05:01:00 +0000

America’s first indoor mall, Southdale Center in Edina, Minnesota, is celebrating its 70th anniversary this year. This birthday could be a litmus test of the viability of the traditional shopping mall. To ensure its relevance, owner Simon Properties just completed a $400 million renovation and new luxury wing, bringing together Gucci, Louis Vuitton, Moncler, Watches of Switzerland/Rolex, MaxMara, and David Yurman. Southdale now has the highest concentration of luxury retail in the upper Midwest and elevates the “luxe listings” above its mega-competitor Mall of America, just a few miles away. But the question remains: Will this capital infusion guarantee Southdale’s future as a 20^th-century architectural aberration in a digital/agentic age? And will chasing the top 10 percent of spenders buy Southdale and Simon time? It is by no means a guarantee of its longevity.

Can the 70-year-old Southdale Center live up to consumers’ expectations? And the answer is: Adding a new luxury wing is not a panacea for cultural relevance; today’s malls need to deliver experience and brands that are meaningful to consumers.

In the Beginning

Southdale’s origin story is a retail case study. Funded by the Dayton Development Company, it’s widely considered to be the nation’s first fully enclosed, climate-controlled shopping mall. Austrian-born architect Victor Gruen had a different vision from Dayton’s. Gruen planned for the center to be surrounded by housing, apartment buildings, schools, and medical facilities, as well as natural amenities including a lake and a park, modeled after the commerce centers of many European cities. In 1956, he was ahead of his time; the mall became…a mall.

Gruen’s original vision, now known as mixed-use development, has become the formula for the reinvention and salvation of malls like Southdale. Repositioning malls from single-purpose points of transaction into dynamic community forums promoting human interaction is the sustainable reinvention of irrelevant malls. But, given the ginormous price tag involved, there are only a finite number of malls destined for such rejuvenation. The vast majority will perish.

Class Distinctions

Between 1970 and 2002, over 800 shopping malls were built in America. Money was cheap, second-string suburbs were flourishing, and young consumers—baby boomers—were entering their prime earning years. By the mid-1990s, mall numbers peaked at over 1,500 enclosed malls. Then the tide changed. Today, approximately 700 fully enclosed malls still exist, and projections suggest that another 25 percent of these remaining centers will shutter within the next five years. Analysts predict as few as 200 survivors by the mid-2030’s.

What’s the formula for mall survival? Malls are bluntly, real estate assets. And for real estate, the age-old adage “location, location, location” is the playbook. In terms of sustainability, a mall’s age, tenant mix, occupancy rates, and institutional ownership play decisive roles in defining the ABCs of property class ranking.

The highest performing A-class malls boast premium tenants, affluent customers, and high occupancy rates (mid-high 90 percent range). Their tenants are made up of stable, national luxury and premium brands. These properties are newer or heavily renovated, located in affluent markets, typically home to Apple stores, and many are mixed-use village spaces like The Grove.
B-class malls are moderate performers, plagued by failing mid-market specialty chains. With occupancy rates of 80-90 percent, they are often found in secondary suburbs and cater to value-oriented families. They are generally older centers devoid of improvements, and many are still anchored by JCPenney.
C-class malls are the most endangered species, with 500-600 already shuttered since the mid-1990s. Occupancies are often at or below 70 percent and are considered distressed properties. They cater to highly price-sensitive shoppers with local retailers, discounters, and non-retail services.

Gruen’s Gospel

I believe the Gruen gospel of “placemaking” will ultimately determine the fate of Southdale and the rest of the remaining A-class malls. Their ownership is concentrated among a small number of deep-pocketed development and management companies, including Simon Property Group, Brookfield Properties, Macerich, (and to a lesser extent) SITE Centers, Taubman, and Unibail-Rodamco-Westfield.

It’s Simon Property Group and Brookfield Properties, who together own and control nearly half of A-class malls in the U.S. and they must concentrate on bringing their aging mall properties into the 21st century through additions, renovations, and tenant upgrades.

Southdale was completed in 1956, and the mall was just over 800,000 square feet. Today it is 60 percent larger at 1.3 million square feet. The mall’s haphazard expansion in 1963 and 1971, along with multiple renovations through the 2000s and 2010s, has resulted in a rather schizophrenic visitor experience. The current luxury wing is at odds with the rest of the mall. While the new single-level wing is upscale and polished, it feels like an island (or peninsula) unto itself. Visitors arriving through any of the mall’s other primary entrances will, no doubt, be wowed by the newly renovated center court. However, finding the new luxury wing presents a quandary, accessible exclusively via a second-level corridor.

Futureproofing an Aging Mall

All the money in the world can’t save an irrelevant mall. Some centers are destined to fail in the brutal survival of the fittest. There are core fundamentals that are prerequisites in the reimagining and futureproofing of aging malls. Will Southdale measure up?

Anchor Replacement: A mall’s once dominant department stores literally served as anchors and traffic generators, as well as magnets to attract desirable specialty stores. With their departure, similarly compelling anchor-like players must fill that role. A plethora of unlikely candidates are filling the bill today. They include high-end grocery stores, fitness and co-working centers, hotels, medical centers, “high experience” retailers, and even private clubs. Dick’s House of Sport, which has effectively replaced former Sears stores in several top-tier malls is an excellent example.

To Southdale’s credit, it has flexed its “anchor’s away” muscle. In 2019, on the site of a JCPenney store, a massive $43 million, 204,000-square-foot Life Time Fitness flagship dropped anchor. Billed as a three-story athletic resort, it included a rooftop beach club, pool, and even pickleball courts. Immediately adjacent is a 75,000 square foot Life Time luxury coworking development and indoor soccer field. Both are knockout examples of anchor replacement.

In 2024, on the site of a former Herberger’s department store, Southdale introduced a 25,000 square foot, two-level Puttshack, that bills itself as an “upscale, tech-infused” mini-golf experience. Immediately adjacent is Kowalski’s Market, a premier specialty grocer which should also generate repeat traffic. Southdale’s score: 9 out of 10.

Retail Theater and Experience Engines: The success of the reimagined mall becomes a shared proposition between landlord and tenants. In the face of unified commerce, the continued growth of online retail, augmented reality, and generative AI, brands are being forced to up their game to get folks off the couch. Becoming fully immersed in a brand’s storytelling has become the new norm. Brands like Lego, Crayola, Build-A-Bear, and Camp have become the new “play stations,” undergoing constant reinvention aimed at lengthening the customer’s visit and creating memorable moments.

With the massive popularity of the collectables market that grew by 32 percent in 2025, select specialty retailers are cashing in. Among them, CardVault, Pokémon Center, Kura Sushi gashapon, and Pop Mart. They sit at the intersection of collecting, surprise, and social sharing. They are selling sets, series, rarities, even blind boxes that foster “the chase.”

And beyond the store purchase, often viral “unboxing” follows, driving social media sharing. These brands, and others like, them populate the halls of the Mall of America, while Southdale hasn’t hopped on that brand wagon yet. Southdale’s score: 2 out of 10.

Social Interaction and Brand Activation: More than ever, brands depend on popular performers and sports figures to co-promote product drops. To that end, top malls have beefed-up marketing and event teams to facilitate high-energy, revolving events to drive traffic. Southdale currently has a considerable amount of underutilized space which could be captured for such events that bring “like-minded” groups together around a shared passion. Southdale’s score: 5 out of 10.
Food-Forward Destinations: National restaurant chains like Applebee’s will no longer cut it with new generations, proud of their food-fixated tastes. The winning ticket includes chef-driven restaurants, multicultural food halls, and experiential dining. Chef-staged, fixed-price dinners are selling out months in advance. Even ghost kitchens are being created to facilitate the preparation of Michelin Chef-quality meals for takeout or near-instant delivery to area foodies.

Southdale’s Dining Pavilion is the ghost of its former massive food court; there are plenty of tables and chairs, but light on eats. Southdale is lacking in the fine dining experience that will lure in customers. Southdale’s score: 7 out of 10.

Social Infrastructure and Walkability: Too many major malls resemble fortresses, surrounded by seas of asphalt, as vehicular access and parking overrode pedestrian friendliness during the planning process. The new mall’s viability focuses on socialization, visit duration, relaxation, and immersion. Reimagined, multi-use developments are selling off excess parking to accommodate multi-family housing. Other pedestrian-centric amenities include green spaces, walking paths, water features, community gardens, and well-equipped play areas, for folks to gather, linger, meet, and work. Southdale hasn’t begun turning parking lots into parks. With an influx of multi-family residential properties and luxury services, “greening” initiatives are a must. Southdale’s score: 5 out of 10.

Prescription

While Southdale doesn’t publish its annual visits, The Minneapolis/St. Paul Business Journal reported an 11 percent increase in foot traffic following the opening of the new luxury wing, which isn’t too surprising. Applying my “mall-metamorphosis metrics,” Southdale is an overachiever with its recent retail and lifestyle additions; however, it is clearly an underachiever in the rest of the crucial placemaking attributes. New retail is moving much faster than center owners, including Southdale, can anticipate and act on. Its relevance will depend on staying ahead of what customers want, not catching up to them.

The Top 10 New Stores to Watch in 2026

Warren Shoulberg — Mon, 12 Jan 2026 05:01:00 +0000

It was one wacky year for the retail business, but any number of brands endured—even prospered. We expect the same unpredictability in 2026 when both individual and fleets of new stores arrive on the retail landscape. No doubt there will be a few last-minute surprises but, for now, here’s our preview of what’s in store for the new year. We’ve also included a few late-2025 arrivals that may not have been on your dance card.

Limited Openings

Primark Herald Square New York: The Irish-based deep discounter has stepped up its expansion efforts in the U.S. these past few years, but this opening marks its first Manhattan location, and it went high-profile to be sure. It’s across the street from Macy’s in the former Old Navy flagship. At four stories and 78,000 square feet—54,000 square feet of selling space—it will be the biggest store on the block and should attract serious crowds. The irony that shouldn’t be lost on anyone is that Old Navy was a market leader in its day. Primark, carpe diem.
Wayfair: The giant home furnishings retailer, so far limited to one full-line store outside of Chicago, will open in Atlanta in the spring and later in the year in the Denver metropolitan area …if all goes according to plan. At around 150,000 square feet, these stores are meant to be the physical manifestation of the online shopping experience, with just about everything and anything somebody could want for their home, including the kitchen sink.
Netflix House: Technically, the streaming service’s first two stores opened in late 2025, in the Philadelphia and Dallas markets. The next one is not scheduled to open until 2027 in Las Vegas. This retail concept belongs on our list, given how few people in the business have actually been in a Netflix store. These 100,000-square-foot interactive—dare we say immersive or experiential—stores offer countless attractions keyed into the network’s shows, including Stranger Things and Bridgerton. They are free to enter, but the meter starts running pretty soon thereafter. Is this the future of shopping mall anchors? Visit one, and then you tell us.
Von Maur: We need to stretch the calendar one more time for this one in what will be the midwestern department store chain’s first location in the broader New York metro area. The Freehold, NJ, store is set to open in 2027, but for many snobbish New Yorkers, this will be their first time seeing a Von Maur store in person. Equal parts Nordstrom, Dillard’s and a touch of Macy’s, it will also remind some of vintage Stern’s. Let’s see if it cuts it in the decidedly more volatile and promotional wilds of Jersey.
Zale’s: In 2025, the moderate jewelry specialty chain opened four new concepts it calls The Edit. For 2026, there are several more on the way. As with any variation on a retail theme, these new stores may have subtle points of differentiation: open layouts, more private shopping spaces and additional digital bells and whistles. As a mid-market player, the chain is clearly trying to offer a fresh face for a shrinking market segment. New stores in Atlanta and Jacksonville are on tap for the first quarter of the year.

Is physical retail contracting or expanding in 2026? And the answer is: From limited-run openings including Primark and Wayfair to a mega 450 new locations for dollar stores, physical retail reflects optimism and courage in the new year.

Retail at Scale

Walmart: There’s still no hard count on how many new locations the Boys from Bentonville will open in 2026, but it’s probably fair to say the year will mark its largest expansion in a number of years. Walmart is riding a hot hand these days and smelling blood from its biggest competitor, Target. You can bet it’s all about market share.
Dollar General: However many stores Walmart opens, it will be a rounding error compared to this dollar giant, which says it will open 450 new locations in 2026. All the big dollar brands have always opened large numbers of stores each year, but let’s not forget that many of these are replacements for locations they have closed. Still, 450 is an outrageous number, and we doubt any national chain has ever been this ambitious. By the way, do the math and this works out to 1.2 stores a day…including Sundays.ow HG
Barnes & Noble: Rising from the dead, it wasn’t all that long ago that this bookstore chain would have been on a list of companies closing stores. Under new leadership supporting a localized merchandising strategy, B&N has undergone a remarkable transformation and says it will open 60 new locations this year, on top of the number it rolled out in 2025. Rumors of going public may alter those plans, and if those rumors are true, we hope that as a public company Wall Street doesn’t push the endangered bookstore model to do anything stupid.
Lululemon: While the activewear retailer finds itself in a proxy war with its founder trying to once again assert control, the retailer has an ambitious expansion plan in place this year. Unlike some other American brands, it includes overseas locations. Through its franchising model, it will open new stores in six overseas markets: Greece, Austria, Poland, Hungary, Romania and India. This comes as its U.S. growth seems to be stalling out, so it will be fascinating to see if it can succeed in Europe and Asia when so many other American brands have failed.
Buc-ee’s: The Texas-based, travel-center-on-steroids chain is opening at least five new locations in 2026. But what’s important here is they are entering three new markets: Ohio, Arizona and Arkansas. These represent a continued geographic expansion for this clever little beaver and prove the concept of 100-pump gas stations combined with 50,000-square-foot retail stores, restrooms bigger (and cleaner) than anything imagined before, and Texas barbecue has potentially endless possibilities. And don’t you dare call it a truck stop: Trucks are not even allowed at Buc-ee’s.

We expect other big expansions of retail brands over the next 12 months. But as is increasingly the case in the retail business, the big get bigger, and the rest end up in that big mall in the sky. Stay tuned.

The Shifting World of Retail Real Estate

Retail Unwrapped — Fri, 26 Dec 2025 05:01:00 +0000

We’ve all read the real estate headlines, both positive and otherwise. So, what’s really next in retail real estate? There’s nowhere left to expand: Occupancy in quality centers is running 96 to 97 percent in desirable locations. It’s a landlord’s market with store openings continuing to outpace closures by roughly 2:1. And capital is still flowing into retail real estate and property tech despite negative headlines. Join Shelley with real estate experts Stephanie Cegielski, Vice President, Research and Public Relations of ICSC and Steve Morris, Founder of ASG as they reveal how retail real estate is operating from a position of strength driven by limited supply, disciplined development, and sustained demand for high-quality space. They discuss how retailers are competing aggressively for high-quality space, consolidating footprints, leveraging data-driven site selection, and designing stores to support omnichannel convenience rather than pure browsing. While landlords currently hold leverage, lease structures are becoming more flexible and collaborative. Mixed-use, wellness, value retail, and data-enabled decision-making are defining the next phase of physical retail growth. Listen and learn what to expect in real estate as developers up their game in delivering the services and experiences customers want.

Special Guests

Stephanie Cegielski, Vice President, Research and Public Relations of ICSC

Steve Morris, Founder of ASG

Transcript

Retail Real Estate Redefined

Brian Delp — Mon, 27 Oct 2025 04:01:00 +0000

Headlines have proclaimed the “death of the retail store” since the emergence of disruptive ecommerce, and long before the struggles brought by the pandemic, the surge of Chinese marketplaces, and, of course, Trump’s tariffs. 2025 has delivered no shortage of early warning canary calls.

Real Estate Redefined

Tariff pressures, escalating operational costs, and high interest rates have not derailed retail real estate. Instead, they are reshaping it. Rising construction costs and expensive financing are steering capital away from new developments and toward repositioning existing assets. At the same time, shifting consumer lifestyles, particularly among younger generations, are giving open-air and mixed-use spaces new relevance. The result is a market defined by closures at one end of the spectrum and reinvention at the other, with investors, developers, and retailers reshaping the landscape.

Retailers with significant real estate holdings are better insulated from rising rents and capital costs and can leverage property as both a financing tool and a growth asset. The market is beginning to reprice this dynamic, treating real estate not as a static asset but as the true measure of long-term strength.

Closures and Consolidation

The first half of 2025 was retail’s weakest leasing period since the pandemic. U.S. retailers vacated nearly fifteen million more square feet than they occupied, reversing two years of steady growth. We’ve experienced the recent closure of Joann’s, Party City, Rite Aid, and Forever 21. With Walgreen’s plan to go private, 450 store closures are estimated for 2025, with many more slated through 2027. The acquirers of bankrupt retailers Claire’s and Big Lots have shed additional, multiple locations as well.

San Francisco Centre exemplifies the severity. Once among the Bay Area’s top-performing malls with sales exceeding $1,000 per square foot, the property now sits 93 percent vacant and headed for foreclosure after Nordstrom and Bloomingdale’s departed. What killed it was not ecommerce but an ecosystem collapse: Pandemic closures, surging crime, homelessness, and organized retail theft decimated foot traffic.

But are we really witnessing the end of brick and mortar as we know it? Not quite. Step back from the headlines, and the capital flows to doubling down on new formats, categories, and markets that will earn their keep. The state of retail real estate, much like retail itself, has evolved under pressure from a rapidly evolving global climate into new territories. While closures make headlines, the underlying math tells a different story.

Developer’s Dilemma

Despite early-year softness, national retail vacancy remains below 5 percent, the lowest since the 1980s. Even as net absorption dipped into the red in early 2025, indicating that tenants are vacating more space than they are occupying, the lack of emerging new space has kept competition for prime locations tight and rents edging upward.

Developers face a tough equation. For developers, the barriers to breaking ground are steep. Tariffs on steel and aluminum are inflating construction costs just as elevated federal interest rates make borrowing expensive. Only 7.2 million square feet of new space was delivered in Q2 2025, the lowest since 2000. Since 2009, completions have averaged just 0.5 percent of inventory, the slowest rate of any major property type.

New construction has been limited over the past decade, and that scarcity is one of the biggest reasons retail vacancy remains near historic lows and has become retail real estate’s most reliable stabilizer. Asking rents reached a record $22.73 per square foot nationally and are projected to grow 3.1 percent annually through 2029. With few new projects breaking ground, attention has shifted to adaptive reuse and mixed-use conversions.

What’s Old Is New

With new construction constrained, redevelopment is where the activity lies. Across the country, some enclosed malls are being repositioned as open-air mixed-use community centers blending retail, housing, healthcare, and entertainment, keeping supply tight and value strong. These dynamics are pushing investors to favor adaptive reuse projects and repositioning strategies over speculative new builds. In practice, that means that some existing malls, shopping centers, and neighborhood retail are getting a second life.

Open-air centers are the clear outperformers. Neighborhood and community centers continue to thrive with 5.6 percent vacancy, while regional malls hover above 10 percent. Open-air centers and mixed-use developments have sought to become the new “third places,” balancing commerce with connection. Grocery anchors and personal services provide stability, while flexible footprints accommodate gyms, medical suites, and co-working spaces.

Psychographic Reinvention

Limited supply isn’t the only reason retail real estate is holding steady, as changing lifestyles are driving demand for spaces that serve more than transactions. Gen Z consumers are redefining how and where people gather. They drink less alcohol, exercise more, and tend to socialize through shared activities rather than exclusively nightlife. Running clubs, boutique gyms, and sober social events are turning shopping centers into hubs of community life.

Experiential retail reinforces this shift. Brands like Coach, Ralph Lauren, and Gucci are weaving cafés, workshops, and cultural activities into their stores. Coach Coffee and Ralph’s Coffee have evolved from marketing stunts into global lifestyle extensions that boost traffic and dwell time. Gucci has blurred the line between retail and hospitality with its Gucci Osteria and Giardino 25 concepts. These examples illustrate how the store is becoming a place of belonging rather than transaction, and in that evolution, retail is reclaiming its cultural relevance.

Retailers Getting into the Real Estate Game

Developers slow clean-sheet projects and consumer psychology shifts, so, retailers are stepping in to reshape the landscape and build ecosystems that place their brands at the center. These efforts now extend beyond managing their own footprints. This strategy is already visible across the industry, as major retailers acquire and redevelop key properties.

Walmart acquired the Monroeville Mall near Pittsburgh for $34 million, with plans to reposition it as a mixed-use destination blending retail, entertainment, hospitality, and residential.
Dillard’s purchased the Longview Mall in Texas, citing concerns about absentee landlords.
Costco is anchoring a $425 million project in Los Angeles that integrates a warehouse store with 800 apartments, including affordable housing units. The development, enabled by California’s streamlined housing approvals, reflects retail’s emerging role as a catalyst for community infrastructure.
IKEA has taken the urban approach with their acquisition of Nike’s flagship at 529 Broadway in SoHo for $213 million, planning to use the lower floors for a small-format store and convert the upper levels into office space.

Collectively, these moves reflect a structural evolution. Retailers are moving beyond managing their own footprints to secure long-term stability, brand alignment, and control over the environments that shape the customer experience. They are no longer passive occupants but active stewards of the spaces where they operate. Increasingly, that stewardship is being reflected on the balance sheet.

Retail Real Estate on the Balance Sheet

Real estate is increasingly the quiet anchor of retail valuation. In some cases, the value of owned property exceeds the market capitalization of the company itself. Macy’s exemplifies this conundrum. Analysts estimate its real estate holdings between $7.9 billion and $10.5 billion, compared to a market capitalization of roughly $4.8 billion as of fall 2025. Several activist investors have argued that Macy’s real estate alone could justify its valuation, noting that the market heavily discounts its retail operations. In its 2024 10-K filing, Macy’s acknowledged this imbalance, outlining plans to sell underperforming properties and explore redevelopment where the land is worth more than the store.

Dillard’s, by contrast, shows how real estate ownership can strengthen the balance sheet without overshadowing it. The company owns the majority of its stores outright, with total assets around $3.7 billion and equity near $1.9 billion, and carries little net debt. That ownership gives it flexibility that many peers lack, whether leasing to third parties, redeveloping, or maintaining cash flow stability during downturns.

Across the sector, this pattern repeats itself. Retailers with significant real estate holdings are better insulated from rising rents and capital costs and can leverage property as both a financing tool and a growth asset. The market is beginning to reprice this dynamic, treating real estate not as a static asset but as the true measure of long-term strength.

How Now for the REITs

According to Matt Reid, Vice President, Tenant Representation at ASG, “The continued strength in dominant assets and in traditional REITs is amplified by the strategic divestment of non-core or weaker assets over the past several years, which has allowed them to focus energy and capital on their core and more dominant assets.” The strength of retail property ownership extends beyond individual companies. The public equity markets underscore the retail sector’s fundamental health, with Real Estate Investment Trusts (REITs) demonstrating significant stability and growth. The total equity market capitalization for NYSE-listed REITs currently stands at approximately $1.264 trillion, serving as a key bellwether for the entire commercial property landscape.

The Shopping Center segment has emerged as a sector leader, proving its resilience and ability to generate solid returns. This strength is directly tied to the performance of daily needs and necessity-based retail formats. Major operators like Kimco Realty reported outstanding performance in their Q2 2025 results. The company not only increased its full-year 2025 FFO guidance but also reached an all-time company record for small shop occupancy at 92.2 percent. This stability allows operators to wield significant pricing power, reflected in double-digit rent spreads on new leases. Their optimism is driven by achieving near-record high occupancy rates and successfully exercising significant pricing power on new and renewing leases, a testament to the limited supply of new competitive space.

Even the often-maligned mall segment is signaling a robust comeback, with premium assets thriving, shifting from pandemic-era distress to renewed investor confidence. Mall giants like Simon Property Group, reported a 4.2 percent increase in Domestic Property Net Operating Income (NOI) in its Q2 2025 results. This growth is directly supported by high occupancy rates across its premium portfolio. Further signaling a return to pre-pandemic financial health, the company raised its quarterly common dividend to $2.15 per share in Q3 2025 and increased its full-year FFO guidance.

Investors are projecting continued high returns for the sector, reflecting confidence in its sustained cash flow. Retail REITs’ earnings are forecast to grow by approximately 7.0 percent per annum over the next few years, maintaining a robust trajectory despite broader economic uncertainty. This growth signals a high degree of confidence in the retail sector’s ability to maintain and grow its distributable income.

Resilient but Redefined

Retail real estate is at once challenged and robust. Closures highlight the fragility of overstretched chains, but adaptive reuse, off-price expansion, and community-driven formats are driving resilience. Developers face headwinds from tariffs and interest rates, yet capital is flowing into reimagined assets with stable demand.

Perhaps most importantly, consumer lifestyles are reshaping the market. Younger generations are prioritizing social wellness, fueling demand for open-air spaces and mixed-use environments that serve as modern third places. Retailers, developers, and investors alike are responding, transforming brick-and-mortar into the economic and cultural anchors of the next generation.

With vacancies near multi-decade lows and rent growth projected to outpace inflation through 2029, the future of retail real estate won’t be measured in square footage alone, but in its ability to anchor communities, experiences, and enduring value. “At the end of the day, despite continued growth in ecommerce and the current unusual impediments to retailing (notably unwarranted price inflation), consumers will still support physical brick-and-mortar shopping where their needs and wants are fully satisfied,” says Mark Cohen, former director of Retail Studies at the Columbia Business School and my TRR colleague.

A Ukrainian Mall Rises Out of the Ashes

Mark Faithfull — Mon, 13 Oct 2025 04:01:00 +0000

The Nikolsky Shopping and Entertainment Center is Kharkiv’s major mall, and its origin story and wartime rebirth tell one of the most remarkable stories of the brutal conflict in Ukraine. It remains a beacon of hope not just for residents in the besieged city, but for the world.

A Russian missile hit the mall's roof, causing a fire on the fourth floor. It destroyed the ventilation chamber on the fifth floor and affected multiple other areas, including the dome, façade, climate systems, glass installations, and multimedia displays. Inside, the atrium supports collapsed, glass storefronts shattered, and interior decor spanning the second to fourth floors was heavily damaged.

A Mall Story

It was never an easy run for Nikolsky Shopping and Entertainment Center. The mall opened during the latter stages of the pandemic, which was challenging enough, but little could prepare Kyiv-based mall developer and owner Budhouse Group for what was ahead. Less than a year after opening, Ukraine would be invaded by Russia and shortly after that, the Kharkiv shopping center would be extensively damaged by a missile.

Undaunted by the level of damage wreaked by the bombing or the ongoing threat of further missile attacks, the company was determined to restore the center as a symbol of hope and normality for the people in the eastern Ukrainian city of Kharkiv—and beyond.

“We had to go through challenges that none of us should have to go through,” Budhouse Group Chief Marketing Officer Dmytro Bushmakin said. “We opened at a very difficult time during the Covid pandemic. The world was in lockdown. Business was unstable. People were tired, but despite this, Nikolsky immediately became a favorite place for Kharkiv residents. From the very first days, Nikolsky began to break all possible records for shopping center activity across the whole country. We were happy. We made plans, huge plans, but life had a different scenario for us.”

The Mall in Wartime

When the Nikolsky Shopping and Entertainment Center opened its doors in May 2021, it made its debut with the kind of fanfare expected for a major new mall in an emerging retail market. Boasting Ukraine’s largest domed roof structure, the 1.1 million square foot mall – of which around half is dedicated to retail – offered over 150 stores, a hypermarket, restaurants, a multiplex movie theater, bowling, fitness facilities, and an entertainment zone for children.

The shopping center is located in the heart of the city, close to many well-known urban destinations, including the Kharkiv Choral Synagogue, Kharkiv State Scientific Library, Shevchenko Park, Pokrovsky Square, Kharkiv Historical Museum, and Constitution Square.

However, in February 2022, Russia invaded Ukraine, and on March 9, a Russian missile hit the mall’s roof, causing a fire on the fourth floor. It destroyed the ventilation chamber on the fifth floor and affected multiple other areas, including the dome, façade, climate systems, glass installations, and multimedia displays. Inside, the atrium supports collapsed, glass storefronts shattered, and interior decor spanning the second to fourth floors was heavily damaged. Thankfully, there were no casualties as the mall was empty at the time of the strike.

“Nikolsky was directly hit by a missile. Everything was destroyed, the city was under constant shelling, constant danger. Without hesitation, we decided to start reconstruction work as soon as possible and ensure the safety of visitors and staff by arranging shelters,” Bushmakin said. He stressed that the reason this was undertaken was not only for the sake of business recovery, but it was necessary to show that “life goes on, and we will not be broken.”

Restoration began in April 2022, prioritizing the underground level — home to the Silpo supermarket and parking lots — both for public use and as a makeshift shelter during ongoing air raids. “Four months later, we had already opened the first level, and every month, we launched a new level. Every day was a challenge, from the shortage of materials to the constant bombing of the city, but in October, we completely restored the entire center. It was not just reconstruction. We turned to the idea of socializing space. We begin to organize events that help people unite and distract from the terrible reality,” Bushmakin said.

By June 17, the first and second floors were operational again. The third floor followed on October 21, and by November 18, the fourth floor — along with the multiplex movie theater, sports facilities, a bowling alley, and food court — had reopened to the public.

“In particular, we conducted charity and social projects in the shelters, and one of the most emotional was a movie theater in the underground parking area,” he said. “We put up a huge screen, and people who stayed in the city came just to watch a movie. Our center in the city center was a place where you could find shelter and recharge your phone via the generators, because there was a blackout all over the country.”

By December 1, 2023, all the damaged retail space had been restored and handed over to tenants for their fitouts.

Restoration in a War Zone

According to Maksym Havriushyn, the mall’s COO, the decision to push ahead with the restoration process began despite the fact that Russian troops were just around six miles from Kharkiv. He emphasized the importance of reopening before winter, so the building would remain usable, and to restore infrastructure when much of the city’s retail was shut. He also noted the mall’s role in offering both shelter and a return to normalcy. The total cost of restoration approached $18 million, while overall losses, including depreciation, reached around an estimated $150 million.

The revitalized mall saw its visitor numbers rebound, and by February 19 this year, the Nikolsky Center had welcomed its 30 millionth visitor since opening. That is all the more remarkable given that currently the city’s population is estimated to be less than half of the 1.5 million who lived there pre-war. Resilience is a powerful mindset; the mall and bars remain busy, with the city’s epithet ‘unbreakable’ seen everywhere.

Nikolsky’s Bigger Story

In 2024, the total turnover of Budhouse Group’s shopping centers amounted to nearly $300 million, 33 percent up over 2023 in local currency. They have withstood unimaginable challenges, impacted by the closure of the Fabrika shopping center in Kherson, which was destroyed by Russian bombing.

“Nikolsky is like a phoenix that rose from the ruins and began its new life,” Bushmakin said. “Today we can broadly say again, the footfall has returned to pre-war levels, and now we are showing record results again. First of all, this is not a marketing achievement. No, it is more than that. It is a human achievement.

“We believe that Nikolsky is not about walls. It is not about commerce. It is about people. It is about the residents of Kharkiv who returned home. It is about the tenants who risked reopening stores. It is about the team that worked in basements without lights,” he said. “We want this story to become not only the story of Nikolsky, Kyiv, Kharkiv or Ukraine, but also an example for the whole world. The impossible is possible if you have great people and faith behind you.”

Mango’s Ambitious Expansion Plans

Mark Faithfull — Thu, 25 Sep 2025 04:01:00 +0000

Despite international tariff turmoil, Barcelona-based retailer Mango has continued its ambitious expansion in the U.S. Often overlooked for rivals such as Spanish powerhouse Inditex, Sweden’s H&M and Japan’s Uniqlo, Mango has deliberately and carefully built on its quintessential Mediterranean approach. And right now, it seems to have got its sunshine chic just right, rolling out stores across the globe.

What’s interesting about Mango’s approach is that it has stepped away from fast fashion and is pinning its expansion not only on leveraging its Spanish heritage but on slowing the fashion cycle and concentrating on durable, longer-lasting apparel.

Manifest Destiny

Two big things are happening that could help propel its U.S. presence further. First, it hit a landmark by reaching 50 U.S. stores in its North American campaign and secondly, an impending new flagship in Manhattan – set to be bigger and better than its current flagship – is aimed at putting its new brand positioning onto the biggest U.S. stage.

But what’s more interesting about Mango’s approach is that it has stepped away from fast fashion and is pinning its expansion not only on leveraging its Spanish heritage but on slowing the fashion cycle and concentrating on durable, longer-lasting apparel.

Mango is pushing its U.S. expansion plans. It has been present in the U.S. since 2006, but the company launched its more aggressive growth cycle in 2022 with the opening of its current flagship Fifth Avenue store. The Spanish global fashion retailer recently opened its 50th U.S. location over the summer in Portland, Oregon, in the city’s Washington Square shopping center. The new location focuses solely on Mango’s Woman line and became the brand’s second store in the city after opening at Pioneer Place earlier this year.

In keeping with its positioning around its Spanish heritage, the store features Mango’s ‘New Med’ concept, which the retailer has focused on as part of an emphasis on celebrating its Mediterranean location, in contrast to the site-neutral global approach taken by most of its rivals.

“Reaching this milestone (of 50 stores) is an important achievement for the entire Mango team and reaffirms our deep commitment to our U.S. clients,” Mango Chief Expansion & Franchise Officer Daniel López said at the time of the opening. He called it “a testament to the warm reception of our unique value proposition and to Mango’s ambition in the U.S.”

U.S. Expansion

Mango has already opened stores in Nevada, New Mexico, Washington and Oregon this year, while it also launched at Fashion Show Las Vegas, the largest shopping, dining and entertainment destination on the Las Vegas Strip, plus at Albuquerque’s Coronado Center mall.

It is also set to open its first store in Chicago on Michigan Avenue and will also increase its presence in California with a store in Costa Mesa’s South Coast Plaza. Its plan is to open 20 new stores by year’s end, resulting in around 65 company-owned U.S. stores by the close of 2025.

The highest profile of this U.S. expansion will come when Mango opens its fourth Manhattan store at 1976 Broadway, situated in the heart of Lincoln Square. The 13,000 square-foot store will become its new U.S. flagship and will stock the Woman, Man and Kids lines. Other locations are in Midtown on Fifth Avenue, in SoHo and at the Hudson Yards complex. Mango also reached an agreement with Parsons School of Design in New York to create training scholarships.

“We are thrilled to continue executing on our expansion plans by increasing our footprint in New York City, one of the most important fashion locations in the world,” López said. “This opening reaffirms our deep commitment to the U.S. market, a fundamental pillar in our global strategy, as well as the positive reception of our differential value proposition by our customers in the U.S., a key market that is experiencing double-digit growth.”

Mango New Med

Central to this differentiation and Mango’s big gambit is the ‘New Med’ identity, unveiled across its latest store designs and visual language, which it says channels the textures, warmth, and relaxed sophistication of the Mediterranean. To that end, stores feature natural woods, handcrafted finishes, earthy tones and an aesthetic that mirrors coastal light, evoking a lifestyle rooted in culture, sun, and authenticity.

While its rivals tend to concentrate on fashion seasonality, it has focused on design and lifestyle storytelling in a bid to reshape how consumers perceive the brand. Its strategy builds on the idea that fashion can be accessible without being disposable, with an eye toward longevity.

This should play well to its customer base, and right now it seems to have that playbook right. But trends change fast. While its performance has justified the approach, there is no escaping the fact that cautious expansion leaves it in danger of falling further behind the global fashion giants or fast-moving new entrants.

Economies of scale could be a factor, too. Growing to 50 stores and opening new DCs is one thing, but at that size and with tariff challenges, protecting margins and lowering its cost base are going to be tough unless it accelerates growth and creates regional hubs.

But certainly, the Med brand identity dovetails with a more environmentally conscious approach that favors longevity over constant churn, leaving it less vulnerable to sustainability challenges. It has also allowed Mango to carve out a middle space —affordable yet elevated, lifestyle-oriented yet approachable — which is clearly where it believes its future lies. “Our strategy is about depth as much as scale. We are not only opening more stores worldwide but also elevating what Mango stands for in each market,” Mango CEO Toni Ruiz said of the approach.

Mango’s International Growth

So, what about the rest of the world? The approach is global, and in Europe, Mango is reinforcing its presence in established markets. France and Germany, already among its top performers, are receiving larger flagship formats under the company’s New Med concept, while the U.K. and Italy remain important centers for growth, with expanded store networks in London and Milan.

In the meantime, in India, its partnership with Myntra continues to drive openings, with several new stores set to launch this year in Delhi, Mumbai, and Bangalore. The company is also strengthening operations in Southeast Asia, while Chinese expansion is being pursued cautiously, focusing on tier-one cities such as Shanghai and Beijing.

In Latin America, Mexico continues to be a key market, with Mango preparing new flagship stores in Mexico City and Monterrey in 2025, alongside additional sites in Guadalajara. Chile and Colombia are also expanding, with the brand strengthening its presence in Santiago and Bogotá, “Latin America is a region of enormous potential for Mango. We see a young, dynamic customer base that connects naturally with our brand identity,” López said of growth plans.

Will Slow Fashion Work?

Mango’s gamble is that a slower, more considered apparel offer will not only help differentiate it from the slew of fast fashion rivals but also appeal to customers concerned about the environment and looking for good quality wardrobe staples. Mango wants shoppers to know all about its Barcelona roots, and coupled with its proven supply chain agility, the format provides both scalability and brand elevation.

Will Warby Parker Succeed in Besieged Target?

Sanford Stein — Thu, 18 Sep 2025 04:01:00 +0000

Target has been in the news, and not for the best reasons. But it may have gotten closer to the red bullseye with one interesting move. In late February, Target announced a partnership with Warby Parker for shop-in-shops in selected Target locations. I recently visited the second such unit to open in suburban Minneapolis. There will be five other shops for this initial launch, including Willowbrook, IL; Brick, NJ; Columbus, OH; and Exton, PA.

In the amorphous Target environment, a separate door clearly demarcates Warby Parker from its host store and makes its customers and staff feel safe, secure -- clearly in a WP space and place untarnished by a soulless big-box interior.

Brand Control

The Warby Parker-Target concept is more akin to an in-line mall store than the more integrated Target and brand models such as Ulta, Apple, Levi’s, and even Caribou Coffee. Following the retail licensing/concession model, Warby-at-Target comes complete with a glazed storefront and its own door. It’s about total brand control.

Warby understands its extraordinary brand value is a direct result of its obsessive control over every brand touchpoint throughout the customer’s ever-evolving “path to purchase.” Every aspect of the WP brand is holistic and speaks in one voice, including its website, marketing, product design, store design, and great personal service. In the amorphous Target environment, a separate door clearly demarcates WP from its host store and makes its customers and staff feel safe, secure — clearly in a WP space and place untarnished by a big-box soulless interior. It’s a smart marketing and design strategy.

This dedication to brand integrity has enabled Warby Parker to evolve from one of the most dominant digital native retail brands to becoming an equally successful unified commerce brand with over 300 retail stores in the U.S. and Canada. Now WP is reaching out to a new audience, more mainstream by definition, managing and operating the Target shops with its own trained Warby Parker staff, thereby ensuring their high value offering.

Scaled Design

From the point of view of a recovering store designer (me), the store is a smash hit. It is nothing less than a slightly downsized, impeccably merchandised retail offspring. Warby Parker’s fleet of stores ranges from this tidy 1,000 square foot Target shop-in-shop to 2,500 square foot stores, with an average footprint of 1,600 square feet. At Target, Warby Parker’s full product and service offering includes glasses, sunglasses, contacts, eye exams and vision tests; there is an exam room for their on-site opticians.

From the product SKU perspective, customers won’t feel short-changed. The WP design team has managed to shoehorn in 18 bays of eyewear, comparable to larger stores in the chain. Overall, there’s one problematic element: The shop’s aisles are ample for normal traffic trying on and buying, however, one or two massive Target shopping carts will blow the flow.

By the Numbers

While there haven’t been any disclosures on the financial terms underpinning the partnership, Warby Parker is likely paying Target for space and retains most operational autonomy. So, who stands to benefit from this partnership the most?

Target stores currently generate approximately $438 per square foot in annual revenue. This figure reflects performance across their nearly 2,000 U.S. locations and includes both general merchandise and specialty categories like apparel, beauty, and home goods.

Meanwhile, Warby Parker reportedly generates around $3,000 per square foot annually, putting it in the same league as high-performing retailers like Apple and Tiffany. That’s a lot more revenue power packed into a small space. I suspect the speed of the actual store rollout may be impacted by how well these initial stores perform, but I think this could be a win for both parties.

Adios Ulta

The elephant in Target’s room may well be cosmetics. The WP launch runs in tandem with Ulta Beauty’s announced decision to end its four-year partnership with Target, with shop closures expected by August 2026. Coincidentally, the 1,000 square foot Ulta spaces match the new Warby-in-Target footprint. Longer term, Ulta expects its “divorce” decision will boost traffic and revenue to its wholly owned stores. It has been reported that the Ulta-in-Target stores generated royalty revenue well below one percent of net sales over fiscal 2024.

In a recent interview, Ulta’s president and CEO Kecia Steelman, was asked about plans to increase its store count to compensate for pulling out of Target; she responded: “I’ve got plenty of stores where I could pick up that volume in existing store format. So, there is no need to suddenly be more aggressive and open stores because we are moving away from the partnership with Target.” Okay then!

The Vision Prize

Optical is not new for Target. It first partnered with Luxottica to open Target Optical shops inside its stores back in 1995. And EssilorLuxottica renewed its licensing agreement with Target in February 2023 for the 580 Target Optical stores it occupies. Like the Warby Parker arrangement, those eyewear and vision care departments are operated and managed by Luxottica Retail North America. EssilorLuxottica is the world’s leading optical retailer, owning and operating LensCrafters, Sunglass Hut, and Pearle Vision, along with manufacturing and/or licensing nearly two dozen of the top eyewear brands, including Ray-Ban, Oakley, Persol, Oliver Peoples, and the list goes on.

According to Target’s official press release, the new Warby Parker shops will open in locations without existing Target Optical offerings. Duh.

Who Wins in the Target – “Warby Parknership”

Retail partnerships of this nature have been going on for eons. Department stores began subletting space to cosmetics companies in the early to mid-20th century, but the practice became especially widespread in the post-war retail boom of the 1950s and 1960s.

Best Buy has accelerated the “store-within-store” model through the plethora of tech brands that pay to play in their digital playground. However, the win-win nature is not always evenly matched. And as far as the Target-WP deal goes, I believe Warby Parker could be the big winner; here’s why:

Captive Audience. While it’s unlikely that WP expects “destination visits” to Target for the sole purpose of trying on or buying their eyewear, the brand exposure and broadening their audience is a sure bet. Whether it tarnishes the brand for existing WP customers remains to be seen.
Cost Savings. In comparing the sky-high costs of tenant buildout in a typical regional mall or freestanding street location, combined with associated common-area maintenance (CAM) costs, with that of a more moderate Target shop-in-shop, the latter is the winner.

Online/In-Store Synergy – It has been well established that the addition of a physical store to a digital-first brand reduces customer acquisition costs and drives incremental online traffic. The Target move increases Warby’s zip-code coverage without committing to long-term mall leases. With Warby Parker’s highly refined digital marketing machinery, the benefits include a robust, new data trove.

Will Target Diminish WP?

Even with the potential positives for WP, one might question what the long-term strategy here is (if there is one). The WP partnership is a gamble for the brand that has made its mark based on its popularity with young, hip customers. Is that a good match with the typical Target customer? Will it confuse Target’s shopper who is not necessarily a WP customer, let alone aware of the brand? And what about WP’s shiny, clean interior design in Target’s tired big box stores?

Warby Parker started life as a niche brand offering and has broadened its marketing strategy as it has scaled. The skeptic could ask, “At what price to brand integrity is scaling to the masses?” On the other hand, 79 percent of Americans wear eyeglasses. That market is clearly irresistible.