You cannot blame the current round of retail bankruptcies and store closures on declining mall traffic. Malls have generally performed about as well as they have traditionally, so stores have had opportunities to sell to consumers.
Lackluster sales numbers are not due to a lack of potential customers, and they’re certainly not due to massive growth of the internet. Online sales have held pretty steady at around 16% of the total for the past couple of years.
Related: After bankruptcy, retail chain liquidates stores, seeks buyer
In fact, the only time they topped 20% was during the height of the pandemic. Foot traffic and failing malls are a convenient excuse, but not a valid one. So many retailers have failed that malls simply have had to reinvent themselves to stay busy. They’ve largely been successful in doing that.
“But comparing YoY at average daily visits – a more accurate analysis of YoY performance when comparing a regular year to a leap year – reveals that visits to indoor malls and open-air shopping centers held relatively stable in February 2025, despite the sharp drop in consumer confidence. And both mall types outperformed the wider retail YoY average – highlighting the ongoing resilience of the retail format,” according to data from Placer.ai.
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The bankruptcy and liquidation of another retail chain, which had a significant mall footprint, will result in further changes to retail in a broader way.
Mail retailer’s death frees up space for something new
Neha Govindraj is the CEO of Bonside, a firm that provides financing to emerging brick-and-mortar businesses focused on services or experiences — like fast-casual restaurants, yoga and Pilates studios, and coffee shops. A number of his company’s portfolio businesses – including JoJo’s Shake Bar and Golf Lounge 18 – have recently expanded or are in the process of opening new locations in former malls that have been closed and redeveloped into open-air shopping centers.
More closings:
- Popular retail chain to close unprofitable store locations
- Bankrupt retail chain unloads store leases, key asset
- Popular discount retailer files bankruptcy, closes all stores
He sees the Forever 21 closure and liquidation as a sort of opportunity.
“We’re in a period where the makeup of a retail footprint is evolving. In the past, it was dominated by traditional mall retailers like Forever 21 because that’s what the consumer demanded. Today, we’re witnessing the rise of service and experience-based businesses,” he shared in an email to TheStreet.
The CEO believes that changing consumer needs are forcing malls to make changes to what they offer.
“A driving force is the consumer’s demand for more experience, variability, and convenience. While traditional retailers can offer experiential elements, service-based retailers’ core offering is an activity or experience (think: facials, haircuts, restaurants, golf simulators),” he added.
Malls are changing, not dying
Govindraj believes that the limited space needs for some of these experience and service retailers makes it easier for landlords to take a chance on them.
“With their ability to optimize for small footprints (many require less than 1,500 square feet), they inherently provide more variability as well — 6,000 square feet can host four service-based retailers versus one traditional retailer. Additionally, consumers increasingly crave the convenience of hubs, where they can drop kids at swimming lessons while attending a boutique fitness studio next door,” he wrote.
Related: Another auto supply chain closing most stores, no bankruptcy filed
This is simply a natural shift to supply meeting demand as consumer tastes and needs change, Govindraj explained.
“While consumer spending may trend downward, services prevail as they meet modern consumers’ needs and cater to various demographics. Many are simply inelastic by nature (i.e., daycare). For landlords adapting to this new landscape, identifying and partnering with the strong-performing services-based businesses will be critical to remain resilient as the retail landscape experiences this evolution,” he added.
Forever 21, for its part, has already begun the liquidation process.
“In connection with the filing, we are beginning the process of closing a number of stores across the U.S. Importantly, however, our stores will remain open for the time being, and we will continue to fulfill customer orders placed online. We also will continue to honor customer gift cards and store credit through and including April 15, 2025. All sales both in U.S. stores and the U.S. website are now final,” it posted on its website.
