On a May afternoon at Westfield Montgomery shopping mall, a group of teenagers with shopping bags races across the tile floor before deflating into chairs by the escalator, checking their cellphones and sipping Starbucks Frappuccinos. For Olivia Andreassi and her friend Vanessa Pontachak, both 13-year-olds from Bethesda, this is a weekly ritual. While Friday nights are for meeting up with friends in downtown Bethesda, weekend afternoons are for getting together to prowl the mall, just as they were for their parents’ generation, when shopping malls meant video arcades and Orange Julius. “We’ve been here for, like, four hours,” Olivia sighs, before sipping from her straw.
But step past the food court and through the exit door and the scene transforms. Rather than teenagers laughing against a backdrop of piped-in music and the smell of soft pretzels, you’ll see a frenzy of construction. Workers in yellow hard hats bang nails. Power tools whir and pound. From the mall’s old parking garage, a new wing is emerging, looking like a massive modernist sculpture of shiny rails, rusted steel girders and concrete walls.
Though Olivia and Vanessa may not realize it, indoor shopping malls are on the decline across the country, and the new construction taking place at Westfield Montgomery is evidence that malls, no longer the pillar of American suburbia that they once were, are trying to reinvent themselves. Anchor stores are dwindling. Online sales are growing. Few new malls are being built. Hundreds of old ones of various sizes are closing, the high school hangouts of yesteryear relegated to hollowed-out hulls. Other aging malls are seeking new life as outdoor plazas with streets, sidewalks and umbrella tables alongside storefronts that mimic the downtowns they once put out of business.
Instead of closing or starting over from scratch, the 46-year-old shopping center once known as Montgomery Mall is opting for an $89-million makeover and expansion. It’s meant to keep the mall current and relevant without leveling the existing shopping center. The remodel brings a sophisticated design, stylish furnishings and higher-end offerings to appeal to Bethesda’s increasing prosperity. There will be a new movie theater that serves cocktails, as well as restaurants owned by celebrity chefs.
The remodel is set to wrap up this fall with a new wing that mall owners hope will spare Westfield Montgomery the fate many now-shuttered malls have experienced across the country.
“You can’t ever stay the same,” says Diego Gonzalez-Zuniga, marketing manager for Westfield Montgomery. “Retail is ever-evolving, ever-changing. That’s something we always have to keep in mind: What kind of experience are we giving shoppers?”
When the Bethesda shopping center opened as the Montgomery Mall in 1968, it was only the second indoor mall in the county, behind Wheaton Plaza (now Westfield Wheaton). Owned in a joint venture of the May Department Store Co., based in St. Louis, and Strouse, Greenberg & Co., based in Philadelphia, the original mall included a colonial-themed corridor of shops with 18th-century facades called Georgetown Row, and a lineup of stores that reads like the intake form at the retail morgue: Hecht’s, Garfinckel’s, Woolworth, Kinney Shoes, Waldenbooks, Peoples Drug. A major expansion added 40 new tenants in 1991, kicked off with a concert by Tony Bennett. Three years later, the Australia-based Westfield Holdings (now the Westfield Group) bought it.
Those were the glory days of malls. Throughout the 1980s, shopping centers became fixtures in the suburban landscape as more than 16,000 new malls went up across the country. In 1990, consumers told Gallup that they shopped more at malls than anywhere else. But by the time the movie Mallrats appeared in 1995, mall construction had dwindled, outpaced by new “big box” developments anchored by stores such as Wal-Mart and Target instead of enclosed shopping centers anchored by department stores. By the late 1990s, those traditional retail anchor chains were consolidating. In the first decade of the 2000s, as online shopping began to take off, mall standbys such as Marshall Field’s and Hecht’s vanished.
Today, online sales account for 6 percent of retail sales; not a lot, but double the amount in 2006, forcing major retailers to rethink how they do business. Traditional anchors are shrinking, both in number and in size. In 2005, Macy’s swallowed up rivals such as Lord & Taylor and Marshall Field’s, both of which were once mall mainstays. JCPenney announced plans to close 33 stores this year. Sears has closed some 300 stores in the U.S. since 2010. While a few upstarts, such as Lululemon and Michael Kors, are on the rise, other specialized retailers are cutting back. Aéropostale is set to close 175 stores over the next several years. Coldwater Creek started closing all of its 370 stores in May. Other mall standbys—bookstores, record stores, video arcades—look like something out of an old John Hughes movie.
The website DeadMalls.com has chronicled some 400 shuttered malls and counting since it launched in 2000. Malls in Montgomery County, like others across the country, are facing a changing consumer landscape. White Flint is reinventing itself as a mixed-use outdoor shopping complex. Owners of Lakeforest Mall in Gaithersburg are considering some sort of mixed-use development as vacancy rates rise there. At City Place Mall in Silver Spring, developers are eying a redesign to bring back tenants.
“In some cases it will be an enhancement of an existing mall,” says Steven Silverman, Montgomery County’s economic development director. “In other cases it may be a restart because of the nature of the center. Retail is changing all over the country and all over the world.”
Amid the carnage, though, some malls are thriving. Tysons Galleria in Fairfax County, Va., enjoyed its best sales year ever last year. Eric Howard, who came to Westfield Montgomery in November as senior general manager after overseeing a pair of Westfield shopping centers in San Diego, won’t release Westfield Montgomery’s numbers, but he says sales are up 8 percent from this time last year. That’s far ahead of the industry as a whole, Howard says.
“I don’t think the mall is dead,” says Anita Kramer, vice president of the Urban Land Institute’s Center for Capital Markets and Real Estate, a nonprofit research group based in Washington, D.C. “There are many, many malls that continue to do well.” So why do some thrive while others languish?
Kramer says the survivors tend to be big malls with lots of anchors that draw in customers from a wide region. Older, smaller malls suffer, she says, but their big competitors—places like Westfield Montgomery and Tysons Corner—survive by complementing traditional retail anchors with new draws that focus on entertainment and dining.
The changes happening now at Westfield Montgomery are modest compared with the overhauls many malls are going through—and those changes represent only a quarter of the 360,000 square-foot expansion that was planned back in 2005, before the recession forced Westfield to do some rethinking. But they’re still part of a national trend: reimagining the mall for consumers who don’t just want shopping. They want a shopping experience.
Websites can sell stuff. Malls are being reimagined to give shoppers a place to be and things to see that keep pace with their changing tastes. “The aesthetic is very important,” Howard says. “The retail mix is very important. But at the end of the day, we want a place where people in Bethesda and Montgomery County can come together and be together. That’s really what we’re designing here. A place where they can meet friends for a coffee. They can meet friends to go to the cinema. They can meet friends for a nice meal.”
Thin and long-legged with gelled black hair, Gonzalez-Zuniga gives a tour of the mall to see the work that’s already been done. New shiny railings are in place along the corridors. Curving minimalist sofas and high-backed chairs sit between floor lamps on antique-looking tripods. He strolls past storefronts for Lilly Pulitzer and True Religion Brand Jeans, two of the new retail offerings at the mall. A white Jeep Cherokee painted with pastel sailboats is parked outside Lilly Pulitzer to promote its new store. Lululemon is on the way, too.
The new wing will be home to ArcLight Cinemas, a state-of-the-art 16-screen theater offering a mix of blockbusters and art house fare, with a food menu that will include chicken sausage baguettes, beer, wine and cocktails alongside Sno-Caps, Junior Mints and popcorn. This is the first ArcLight to be built outside California as the company readies for a national expansion of its high-end theater concept, one intended to focus on the experience of moviegoing, with incredible sound and sharper images, seats with double armrests, no commercials and fewer trailers before the show.
