Valle Vista looks locally to fill its store vacancies

HARLINGEN — Local retailers are taking up the slack to fill vacant storefronts at Valle Vista Mall.

Mall officials recently announced several locally owned businesses are now open at the mall, including Coqueta’s Bridal, Coffee Art Company, Jump Around and New Sun Racing.

“Valle Vista Mall is thrilled to welcome these growing local businesses which are debuting in our area,” said Doug Snyder, general manager at the mall. “We strive to deliver the right combination of stores, eateries and entertainment options to keep shoppers engaged and returning often.”

Snyder works for Washington Prime Group Inc., which owns Valle Vista Mall. Washington Prime is a real estate trust, or REIT, a financial vehicle which invests in real estate through property or mortgages and often trades on major exchanges like a stock.

The addition of locally-owned businesses to fill empty storefronts at malls is a relatively new development. As major national retailers scale back operations and close stores across the country, malls are looking at local or regional businesses to fill open spaces.

“They have to have someone in the space or, first of all, that means that you’re not getting a lease payment on that space,” said Michael Minor, chairman of the Marketing Department at UTRGV’s Robert C. Vackar School of Business and Entrepreneurship.

“But secondly, that’s bad public relations for the mall as a whole because if there are empty spaces, then you’re not really looking like a vibrant setting for customers,” he added. “So they’ll tend to think less of the mall and will tend to shop elsewhere or go online.”

Retail malls, long a solid staple of the urban countryside, have been deeply hurt by changes in the shopping habits of American consumers buying online as well as other brick-and-mortar retail competition.

“Nationwide there’s only been one mall built in the past several years,” Minor said. “And malls are closing elsewhere pretty much left and right.

“In the Valley we haven’t really felt that, so all of the malls that were here a few years ago are still here,” Minor added. “And as far as we can tell they’re all doing pretty well.”

But that may not last.

Retail analyst Jan Kniffen told CNBC last year he predicts one-third of the 1,100 enclosed malls in the United States will close in the coming years. Kniffen bases his dour prediction on increasing online sales and a glut of retail space.

“On an apples-to-apples basis, we have twice as much per-capita retail space as any other place in the world,” Kniffen told CNBC. “So, yes, we are the most over-stored place in the world.”

One of the biggest dangers facing Valle Vista and other malls is the loss of an anchor store.

J.C. Penney will close 13 percent of its 1,000 U.S. stores this year, or about 140 stores.

So far, the only Texas location to be revealed as being on the list is the Penney’s store at the South Plains Mall in Lubbock. Penney’s has five stores in the Valley, including one at Valle Vista.

Another major anchor tenant is Sears, which intends to close 150 of its stores this year. No store closings list has yet been revealed. Sears also is an anchor tenant at Valle Vista Mall.

Malls which have lost anchor tenants struggle to fill the large retail spaces they relinquish.

“There are no big retailers with multiple stores who are taking the place of Sears or Kmart or J.C. Penney,” Minor said. “So I think we can presume that’s a dilemma for the mall operator — I’ve got this big huge space and what do we do with it?

“Sometimes that big space gets partitioned off into smaller stores but that’s a lot of work for the mall owner,” he said. “Compare it to negotiating with J.C. Penney — you’re negotiating with one potential client — and if you’re going to try to replace that say with 15 to 20 smaller stores, then your cost of negotiations and just the paperwork goes up.”