A turning point for Southwest Side retail
Kohl’s announcement points to uncertainty, likelihood of more changes at Southridge Mall

By DAVE FIDLIN - Special to the Post

April 24, 2017

Kohl’s Department Store has announced it will relocate from Southridge Mall in Greendale to the 84South development in Greenfield.
Dave Fidlin/Special to the Post

GREENDALE — With unprecedented, rapid changes in consumer spending habits, Southridge Mall, the large shopping metropolis in the county’s southwest quadrant, faces an uncertain future.

Kohl’s, which has been a mainstay at Southridge since it opened in 1970, announced recently it was leaving its anchor tenant space within the venerable development, further magnifying the growing uncertainty.

Mirroring what a number of retailers are doing in the modern commercial development climate, Kohl’s late next year is expected to uproot its Southridge operations and relocate to a new mixed-use development, 84South, in Greenfield.

“Pending all municipal approvals (from the city of Greenfield), the relocated store would open in late 2018,” said Jen Johnson, vice president of corporate communications for Menomonee Falls-based Kohl’s.

“The new, one-story 55,000-square-foot store will be smaller than the current two-level 85,000 store at Southridge Mall.”

Although it still has a healthy balance sheet, leaders within publicly traded Kohl’s have indicated they are addressing changing consumer habits by shrinking store footprints to remain competitive and profitable. The Southridge announcement follows this strategy.

Although the Kohl’s announcement knocks one of Southridge’s five anchor department stores off the roster, mall management and owner Simon Property Group have expressed optimism about the site’s future as a commercial retail destination.

“We continue to evolve to provide shoppers with more choices at their shopping mall,” Mary Mokwa, Southridge’s general manager, said in a statement.

Due to the uncertainty in brick-and-mortar department stores, the anchor lineup at Southridge could change.
Dave Fidlin/Special to the Post

Mokwa pointed out Southridge has several new developments on the horizon — the most prominent being Milwaukee-based Marcus Theatres’ Bistro Plex, which is expected to open this summer on what once was parking lot space on the mall’s perimeter.

But Southridge’s traditional business model with a heavy emphasis on department stores as anchor tenants and a layout that requires shoppers to access shops inside the mall corridor might have to be tweaked in the years ahead.

When asked about Southridge’s long-term viability and, specifically, the future of the Kohl’s space within the mall, officials within Indianapolis-based Simon Property Group declined comment.

But the company provided a statement from Rick Sokolov, Simon’s chief marketing officer, on the property management company’s view of anchor department store spaces.

“If department stores close, we know what to do with them,” Sokolov said in the statement. “We are ready to take them back, should the opportunity present itself, where we can make money and do it on a cost effective basis.”
 

The remaining anchors

Exacerbating the uncertainty is the state of Southridge’s other four anchor tenants.

The parent companies behind Boston Store, JCPenney, Macy’s and Sears have all struggled in recent years and are in varying states of profitability.

The direst of the quartet is Sears. Hoffman Estates, Ill.-based Sears Holdings Corp. runs the Sears and Kmart stores. SHC has not posted a profit across its two department store chains since 2010.

The Marcus Corp. is building a movie theater with bistro at Southridge Mall in Greendale, which is taking up parking space at the mall. Southridge has been a retail mecca on the Southwest Side of Milwaukee County for nearly 50 years, far outlasting its northern counterpart, the defunct Northridge Mall on Milwaukee’s North Side. Southridge’s owners cite its ability to change as a factor in its favor in the future.
Dave Fidlin/Special to the Post

Recently, the ailing retailer in its annual earnings report gave a warning shot that it might completely shut down its two brands.

“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a growing concern,” SHC management wrote in the annual report.

SHC has been closing scores of Sears and Kmart stores in recent years as it tries to stem losses and stay afloat. When it comes to department store closures, Sears is not alone.

Plano, Texas-based JCPenney recently announced it was closing 138 stores across the U.S. No Milwaukee-area stores were on the list, though the company is shuttering four stores in smaller communities in northern Wisconsin.

Cincinnati-based Macy’s also is in the midst of a multi-phased effort to close up to 100 unprofitable stores across the U.S. Neither the Southridge nor Mayfair Mall locations are targeted at this time.

Bon-Ton, which owns the Boston Store brand, is in such a financially precarious situation that it recently faced the risk of having its publicly traded stock delisted because it fell below $1 per share. The company, with dual headquarters in Milwaukee and York, Pa., has announced plans to close a small handful of its stores this year.

Despite the uncertainties, Southridge Mall and Simon Property Group have a strong ally: the village of Greendale.

“Southridge Mall has been a part of Greendale for nearly 50 years,” Village Manager Todd Michaels said. “As with any member of our community, we hope they continue to thrive.”

Michaels said he and other village officials are optimistic about Simon Property Group’s expertise and ability to keep Southridge relevant as shopping trends change.

“As the largest mall owner in the country, they have the knowledge and means to manage the mall into the future,” Michaels said.