Thanks for the link, too–it’s interesting to see in detail how this is affecting other markets! As far as Boston goes, I know four malls have already announced they will add a Nordstrom’s store to replace the departed anchor. The remainder have been quiet. I expect that JCPenney (who has a very weak immediate Boston area presence with only a couple of stores) will take a store or two, but beyond that the possibilities are wide open.

Retail history enthusiasts should recognize that this is a pivotal time for the American shopping mall. In a sense, the Federated-May merger is the end of the “traditional department store” that has sustained the mall for half a century, leaving the future of that format in doubt. And yet, property owners are poised to remake this end into a new beginning. The malls of tomorrow will be far different from the malls of today, meshing traditional stores, big-box outlets, “destination” retail, and housing in an exciting new paradigm of development.

I’ve been very anxious to see the results of the Federated-May merger here in Southern California, as it is the largest market affected by this combination. Little more than a decade ago, the region had four major “traditional department store” players — Bullock’s, May Company, Robinson’s, and The Broadway — now it has one, Macy’s. Nearly two dozen stores will eventually be shuttered, posing a challenge to nearly all the region’s malls.

Last September, I explored the implications of this merger in Southern California in a post I’d like to share with you and your readers:
Big Changes in Store for Southern California’s Malls

While I saw an opportunity for Dillard’s to enter the market and for Gottschalks to expand its Inland Empire presence, those possibilities seem less likely now that the bulk of the shuttered stores have been sold to mall owners (Westfield and Macerich). I see the mall owners favoring one or more of the four strategies you described above, as many retailers and restaurants can bring in more sales per square foot than a typical department store. Nordstrom will pick up a few units, as may JCPenney, but I think Macy’s is so dominant that a push by Dillard’s or Gottschalks is doomed to fail.

Southern California is a market where a lack of land and strict zoning regulations have kept big-boxes from dominating, so I expect to see Target and Wal-Mart at more malls. Target is favored at more “upscale” properties; Westfield is adding a brand-new Target to Topanga Plaza, where it will be joined by Nordstrom and Neiman Marcus. Wal-Mart may be welcomed at more “common” malls, such as Westfield Parkway in San Diego, where it recently opened in a brand-new building. Target and Wal-Mart have both opened at several malls in greater Los Angeles and San Diego and have proven very receptive to multi-story designs.

I’m sure we’ll all follow this story, with big changes at malls in Boston, Los Angeles, and elsewhere.