Department stores on the nose as malls take fight to Amazon
Listed mall landlord Vicinity Centres is tackling the threat of Amazon by remixing centres away from mid-level women’s apparel to eateries and also expects department stores in its malls to shrink in the future.
At its annual general meeting last week, the group highlighted this shift to consumer spending on experiences and services and the rising market share of international retailers.
The group’s developments will rely less on department stores, with the recent expansion of Chadstone in Melbourne including four international flagships, instead of another department store, outgoing chief executive Angus McNaughton told The Australian.
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Three to five international flagships could provide more sales turnover per square metre than a department store, generate more foot traffic and higher rents.
Department stores are considered less viable than larger specialty retailers. Picture: Jackie Chan
“We are looking to reduce our department store footprint when we can. We have long-term leases in place and that takes a long time,” McNaughton says.
“We would love to get back some of the floor space from some of the anchors so we would be able to put in some of the flagships of other retailers.”
Some smaller format department stores will soon open in the group’s shopping centre developments.
The comments come after beleaguered department store Myer flagged plans to close more stores.
Vicinity notes its full-year guidance of funds from operations per security of 18c to 18.2c and says its transition to incoming boss Grant Kelley is well progressed. McNaughton says he is most proud of the Federation and Novion merger and delivering key projects.
This article originally appeared on www.theaustralian.com.au/property.
