Expert: Economy mauling shopping malls' profits

Some shopping malls are bracing for a tough year as the slumping economy puts a strain on stores and shoppers.
"The tough economic environment, including high fuel prices, has hit the retail sector harder, since consumers have pared traveling and pared their discretionary spending," said Michael P. Niemira, chief economist for International Council of Shopping Centers.
The council predicts 144,000 store closings by year's end, a 7 percent increase from 2007 and the highest jump in 14 years.
Indianapolis-based Simon Property Group, the nation's largest mall owner, lost 151,000 square feet of occupancy to bankruptcy during the first six months of this year, compared with 30,000 square feet during the same period in 2007.
Simon has tried to look at store closings as opportunities to renovate the space. When Castleton Square and Greenwood Park malls lost L.S. Ayres stores, for example, Simon turned the vacancies into open-air additions to the malls.
"That was one big store that closed, and we redeveloped that space in a more appealing manner with 15 to 20 new stores," said spokesman Les Morris said.
But even open-air shopping centers, such as Clay Terrace in the Indianapolis suburb of Carmel, could face struggles because of the economy. This year the mall lost Bombay, Circuit City, Kid's Corner and Memoirs, a scrapbooking store.
"People in Carmel have money to spend, but even they seem to be cutting back," said Shelia Gintley, a Carmel resident who visits Clay Terrace weekly. "I think when you see something like this happening in Carmel, that is proof it has to be happening everywhere."
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