Morgan Stanley
  • Now, What's Next? Podcast
  • May 26, 2021

Meet Me At The Mall

Hosted by Sonari Glinton

Transcript

Sonari Glinton:

Hi, I'm Sonari Glinton. Let me paint a mental picture for you. The year is 1984. We're in a mall. A man dangles a child over the second storey railing of a busy food court. Just as he's about to drop her, there is a crash. A dark haired woman smashes through the glass skylight, swings from a golden lasso, and carries the child to safety. Remember what shopping was like, y'all?

Sonari Glinton:

I am talking about Wonder Woman 1984, the movie. They filmed it three years ago at a dead mall in Alexandria, Virginia. The Landmark Mall. While the film crew was shooting that scene in the food court, nearby in the old Macy's department store, a very different kind of rescue mission was unfolding.

Monise Quidley:

We have veterans, we have domestic violence survivors or people currently going through it. We have people who this is their first time being homeless because they had some sort of tragedy or illness that just took all of their savings.

Sonari Glinton:

For two and a half years, all those people lived in the mall, in a temporary shelter set in an old department store. Now this shelter and Wonder Woman gave a dead mall a completely new purpose, a chance of renewal.

Sonari Glinton:

But what about the rest of the malls? Well, even before the pandemic, malls across America were dead or dying. Experts predicted one out of every four malls will close as more shopping moves online. Now months of lockdowns haven't helped.

Sonari Glinton:

On this episode of Now What's Next, an original podcast from Morgan Stanley, we're asking how are shopping malls adapting and how is the pandemic forcing that change?

Howard Lo:

This is a shopping mall that is probably light years ahead of 99% of the other malls in this world.

Stephen Choi:

Me personally, I hate shopping malls. I never go to them. It was really about building a building for people who might not actually like shopping malls as well.

Speaker 5:

I think it's great to have that space used again because it's right in the middle of the community.

Sonari Glinton:

Malls are dead. Long live the mall. Now, let's go shopping.

Sonari Glinton:

I definitely had a good 30 minutes this morning getting dressed because I was like, "I'm going to meet Ilse Metchek I can't come looking like ..." Did I do okay?

Ilse Metchek:

Good. I don't mind that at all. You're all right.

Sonari Glinton:

Note that she said she didn't mind my outfit. Ilse Metchek, mind you, is a legend in the fashion industry. For over 17 years, she worked her way up from being an assistant to becoming a designer. She ended up owning her own clothing manufacturing company, which she eventually sold and then became the head of the California Fashion Association.

Ilse Metchek:

We've been around for 25 years. I've been around for twice that. I've been a designer. I've been a manufacturer. I've managed 250,000 square feet of the California mart, and one of my functions is to know what's going on.

Sonari Glinton:

Now to do that, Ilse Metchek goes to a different mall every single week. I wanted to get her take on a newer shopping experience, so we went to Platform in Culver City, just outside of Los Angeles.

Ilse Metchek:

When you think of a mall nationwide in the United States, this is not what you think of. This is a structure that was really primarily for one kind of consumer. A contemporary shopper, contemporary clothing, contemporary apparel. It's not a general mall.

Sonari Glinton:

No, it isn't. It's got a lot of pop-up stores, open air walkways, cool seating areas and a courtyard. Very urban, very Instagram friendly. But for Ilse, now more than ever, malls need that extra special something to draw folks in.

Ilse Metchek:

I went to a mall last weekend, 50 miles out of Los Angeles. The stores looked so dated. They still had a t-shirt with a pair of jeans in the window. There was nothing compelling about bringing all of these eyeballs into the store. The people will be back in the malls. Now it's up to the retailer.

Sonari Glinton:

And they're just beginning to come to grips with this problem.

Ilse Metchek:

Before the pandemic, as a country, we were over retailed. Too many stores.

Sonari Glinton:

Too many stores, too many malls, and brands that used to be popular in malls have been closing or failing. Right now, we're talking about 2 million lost jobs.

You don't have to be a legendary fashion designer to know that all malls are not the same. They fall essentially into categories. A malls, well, they make the most money. Think high-end restaurants and Apple stores. B malls, those are the mid-range malls and…

Ilse Metchek:

Cs are pretty much over. Those are the ones that are blank spots now because they had JC Penny, Sears, May Company or a Macy's, and in the middle, they had all the same brands that you can find anywhere else. And anything that you can buy in a C mall, you could buy online.

Sonari Glinton:

With the pandemic's boom in online shopping, you would think that malls are in more danger than ever, but ...

Ilse Metchek:

50% of what is bought online goes back, it's returned. The boom is all fat, pumpkin. You'll buy online what you know will stick with you, what fits, what you know. But for new stuff, to be excited, to be engaged in what's happening, you have to get out. You're not going out to the mall with your wallet in your hand and seeing what you can buy. I think that's not what a mall is for anymore. A mall is a social experience now.

Sonari Glinton:

For many of us, especially anyone born in the suburbs after the 70s, the mall has always been social, and it's likely where you got your first taste of freedom.

Howard Lo:

Yeah, I think from my junior high years through high school, I'd ask my parents to drop me off there and then spend the day watching a movie and then waiting for other friends to show up and then just walking around the mall. It's not really even necessarily shopping. Back then, it was very, very exciting, just lots of people buzzing around.

Sonari Glinton:

That's Howard Lo. He grew up in the suburbs of Orlando, Florida, but the mall he's describing is actually every mall USA.

Howard Lo:

I remember it was a cross shape, so all four ends of it was anchored by one of the major department stores. There was a Sears, actually. Yes, I remember going to Sears a lot over there when I was growing up.

Sonari Glinton:

Now these days, Howard Lo spends a lot of time in a very different mall on the other side of the world.

Howard Lo:

Okay, so I can give you the exact sensation of what it feels like when you walk into Jewel. If you ever watched the opening scene of Jurassic Park. You know, it's kind of flying through the clouds, you're coming to the island and then you see the first dinosaur and you've got this music swelling in the background?

Sonari Glinton:

Howard Lo is describing the Jewel, an opulent mall attached to Singapore's Changi Airport. Now I'm not talking a regular airport. I may have left my heart in San Francisco, but Atlanta's airport stole my soul.

Sonari Glinton:

Changi is heaven in comparison. It's been rated the best airport in the world. Howard moved to Singapore in 2003. While working full-time at Microsoft, he opened a Japanese-style sushi bar where he met his wife and future business partner. They took that sushi bar and grew it into a group of restaurants and bars called Empire Eats. They chose to put two of their places in the Jewel because well, they knew it was going to be a hit.

Howard Lo:

When you come in from the main entrance, as soon as you walk in, it's grand. There's just so much space as the hallways are so wide, but straight in front of you is the amazing rain vortex.

Sonari Glinton:

That is the world's largest indoor waterfall, dropping down from the glass ceiling, and it's surrounded by a forest that stretches over five storeys. There are also garden mazes, climbing nets, a museum, movies, lots of places to eat, bars, and oh yeah. Shopping.

Sonari Glinton:

It's an all-day experience and you don't have to be inside of the travel part of the airport to go to Jewel. It is open to everyone.

Howard Lo:

Even before Jewel, the locals have always gone to just hang out at the airport. You go there at any time and you'll see students using the restaurants to hang out and study at. You'll see families coming in with their kids since there's all kinds of rotating exhibits and road shows that are going on at the airport.

Sonari Glinton:

Now during the pandemic with most travel suspended, Changi Airport has taken a huge hit. Passenger traffic dropped nearly 83%, but Howard's noticed the locals have embraced Jewel even more.

Howard Lo:

I think it offers a little psychological escape. The fact that you do go to the airport to go to this mall helps trigger those associations in one's mind that they're getting away. Then once they're in the mall, because it is so different from the other shopping malls out here, it feels like a comfortable mini-vacation.

Sonari Glinton:

And while Howard says Jewel is light years ahead of malls around the world, there are signs it's changing stateside as well.

Sonari Glinton:

Probably the best example is The Grove in Los Angeles, which is sort of like a theme park with restaurants, shops, live events. They tape TV shows and specials there, they have valet and concierge services. There are fountains and lawns, even a trolley that goes ...

Sonari Glinton:

Developers have been forced to experiment. Heck, they should have been experimenting all along, especially with traditional mall tenants looking to leave. Now last fall, The Gap, which owns Old Navy and Banana Republic, said it essentially is moving out of the traditional mall. It's moving 80% of its stores out of indoor shopping centers over the next two years.

Sonari Glinton:

Now, this part is huge. At the most successful malls, to keep the existing tenants and attract new ones, malls are offering smaller spaces and shorter leases. They're replacing the old school department stores and food courts with bars, gyms, art installations, and most importantly, pop-up stores and restaurants. They're fighting to stay alive and they could take a cue from Singapore, where extremely competitive real estate means developers have to make it work, right quick and in a hurry.

Howard Lo:

There's been a few examples where of all that was, maybe only three or four years old, parts of it didn't seem to be as popular as maybe its developer wanted it, and they would just totally gut the inside and redo it within a couple of years. That'll work. I think in Singapore, the malls seem to have that pressure where they need to do that. They don't just let it kind of fizzle out.

Sonari Glinton:

Fizzle out. That's exactly what happened to the exciting mall from Howard's teenage years in Florida.

Howard Lo:

It was very sad to see that this place that was so iconic in my youth is now this almost empty shell of a large building. It makes me feel a little bit sad every time I go, because malls have a very romantic place, I think, in especially American history and the development of American towns, American city life.

Sonari Glinton:

Let's take a moment. I'm going to try to put this in a bit of context. While Howard may be nostalgic about the good old days of the American shopping mall, shopping malls actually are kind of new. The designer of the first fully enclosed indoor shopping mall was Victor Gruen. He was an Austrian-Jewish architect who fled the Nazis during world war II. Eventually, he settled in Los Angeles. Gruen's malls are a post-World War II invention. Like a lot of mid-century designers Gruen was looking to solve social problems with good design. In his own words ...

"Shopping centers can fill an existing void. They can provide the needed place and opportunity for participation in modern community life that the ancient Greek agora, the medieval marketplace, and our own town squares provided in the past."

Sonari Glinton:

Oh, architects. Always dreaming. But you can see Gruen's influence in almost every corner of the US, and some of his malls still break records for foot traffic and sales. That's something Gruen came to regret toward the end of his life when he said ...

 

“I would like to take this opportunity to disclaim paternity once and for all. I refuse to pay alimony to those bastard developments. They destroyed our cities.”

Sonari Glinton:

The irony, or maybe the tragedy, is that during his lifetime, Gruen's malls veered far away from his core ideas. They became car first, retail first, huge rigid structures that didn't always meet the needs of pedestrians, the community, or the environment.

Sonari Glinton:

Now let's head to a mall where those are the priorities.

Sonari Glinton:

So why don't you give me a little bit of a tour?

Stephen Choi:

Absolutely. One thing worth, whilst we're standing here, I'm not sure if you can hear it, but there's a soundscape of native birds indigenous to this area. Every entrance to the building that you walk in, you have this sense. You walk in, there's a soundscape. There's also a smellscape. In this particular entrance, there's a subtle smell of burning eucalyptus trees.

Sonari Glinton:

That's architect, Stephen Choi. He's giving me a tour of the Burwood Brickworks, a shopping mall he designed in a suburb of Melbourne, Australia. Like Victor Gruen and so many other designers and architects, Stephen Choi is a dreamer.

Stephen Choi:

If I'm honest with you, when we first took on the idea of building a shopping mall that could generate its own energy, recycle its own water, be full of food, no toxic materials, among many, many other things, I actually thought it was impossible. I really didn't think it would be possible.

Sonari Glinton:

But here we are, just inside the entrance, looking up at a reed ceiling covered in black and white waves, arrows, and other shapes designed by a local Aboriginal artist.

Stephen Choi:

The ceiling's actually about telling us where we are in the world. This mall, built 10 years ago, would have been more like a casino. You can't find your way in, you can't find your way out. You don't know what time of day it is, you don't even know if it's raining outside. In here, we try to flip that on its head.

Sonari Glinton:

The Burwood Brickworks upends a lot of things we assume about how malls operate. For example, the kind of stores that go in it.

Stephen Choi:

There's a pharmacy just in front of us. Just above that black sign, you see there, is a medical center. There's a large supermarket or grocery store.

Sonari Glinton:

There are no fast fashion or luxury shops here, mostly just services and food.

Stephen Choi:

There's a butcher shop, and then just above and behind that butcher shop where you see the timber in the far end, that's a childcare center.

Sonari Glinton:

And the prime real estate, the north facing wall with the afternoon sunshine pouring in, features a giant staircase.

Stephen Choi:

So that when you come here, you're encouraged to take the stairs rather than take the lift. So save a bit of energy, but it's really about people's health and wellbeing. We're going to walk up those stairs and then we're going to go up to the first floor.

Sonari Glinton:

Now, why was that important as you're walking up?

Stephen Choi:

When we think about sustainability, we're only ... often, we're just talking about energy, water, materials, waste. But actually, the most important thing is that we're healthy as people and so emotional health is important. The stairs relate to physical health. The ceiling relates to the spiritual health. Often we don't think about health when we're talking about buildings, but that's really important.

Sonari Glinton:

Here's something important to know about Stephen Choi.

Stephen Choi:

Me personally, I hate shopping malls. I never go to them.

Sonari Glinton:

How does a guy who believes in sustainability and doesn't particularly like shopping malls, get into the making the shopping mall business?

Stephen Choi:

It's a great question, because I'm an architect and I realized that everything that I was doing was actually not helping the world, it's actually just making it worse. So I embarked on this adventure to try and change it.

Sonari Glinton:

Now, when Stephen says making it worse, he's referring to a whole slew of environmental problems we're facing. Water pollution, habitat destruction, air quality, global warming, and of course, climate change. Now remember Ilse Metchek, our mall expert from the beginning? She might object to a mall without, I don't know, fashion, but she and Stephen share a common vision of how a mall needs to be forward-looking.

Ilse Metchek:

People build malls based on what's coming. They don't build them all based on what is.

Sonari Glinton:

Global warming and climate change are here, not just coming.

Stephen Choi:

So every time you build a building, it makes a lot of those environment problems I mentioned much worse. We wanted to build a building that wouldn't do that and also a building that was completely accessible to everyone in society.

Sonari Glinton:

That's a key for Stephen Choi, building a green building for everyone. Now usually, ultra-green buildings are private homes or corporate spaces.

Stephen Choi:

But generally for the everyday person, they never get to interact with a building that doesn't just do less damage to the environment that it's in, but could actually regenerate it.

Sonari Glinton:

The architect and dreamer, Stephen Choi, wants this building and the lessons that went into making it to be easily replicated and improved on, so he's sharing the plans and the data with other architects. That used to be unheard of.

Sonari Glinton:

We end our tour at Stephen's favorite spot in the mall.

Stephen Choi:

We're standing on the roof of the shopping center. It's an urban farm up here, so there's thousands and thousands of square feet of food that's grown. Also, there's chickens, quails, bees, butterflies, and many other insects that we don't control.

Sonari Glinton:

Many other insects you can't control. Let me just take this opportunity to remind you that we're on the roof of a shopping mall.

Stephen Choi:

And there's kids playing and people eating food that was grown right next to them. Then those people, when they go home, and I hear about this every day, they start planting the same crops. Or they come to the farmer and they start talking about what they should do about their chickens or whatever that they own. I think that's happening at the community level and it's happened at the industry level.

Sonari Glinton:

It seems like your work has been focused on a couple of these ideas. One, the environment and two, bringing the ideas sort of off the mountain. Is that an over simplification?

Stephen Choi:

It's a really lovely analogy. I'd never thought of it that way. If you think about the things that are here — medical center, childcare, yoga, cinema, grocery store, cafes, and so on, they're not really part of that same consumer's culture that you'd normally get in the retail environment. They're really about how and where people connect to each other. That for me is just at the heart of all the work that I've wanted to do.

Sonari Glinton:

From the lush green gardens of Melbourne, Australia to the cobblestone streets of Alexandria, Virginia, and that temporary shelter in the Landmark mall.

Monise Quidley:

Since the mall was shuttered and had been for a while, we had to actually go in and retrofit the building for the shelter. I mean, our offices were in lady's active wear section and where the administrative offices were, you can go through a door which would take you into the mall. It was really, really kind of interesting, dark, scary. When we first got there, I would be like, oh, we would go out and I would look and see if I could find a diamond or something.

Sonari Glinton:

Monise Quidley was looking around for signs of life. She's the director of development for Carpenter Shelter and was one of the people in charge of finding a temporary space for the shelter while its new permanent home was being built. When she found out they were moving into the Landmark mall ...

Monise Quidley:

I was like, "What? We're moving where?"

Sonari Glinton:

Monise knew Landmark in its better days. It was her first shopping experience after she moved to the area in the 90s.

Monise Quidley:

It was booming, it's where all the high school students and people hung out, movie theaters. So it was busy, it was a hub bringing all kinds of people together because this was central in the community.

Sonari Glinton:

Until it wasn't. Demographics shifted in the neighborhood and shoppers shifted to the newer upscale malls. Redevelopment plans for the Landmark fizzled in 2008 when the financial collapse bankrupted the owners. Retailers started closing one shop after another until all that was left was the Sears and long corridors of, well, nothing.

Sonari Glinton:

In 2017, the Landmark mall went dark as the owners finalized new development plans and renegotiated with the community. They agreed to let the Carpenter Shelter have the old Macy's space rent-free.

Monise Quidley:

It was interesting to hear some of the residents' stories and the fact that many of them had shopped at the mall when it was a mall. Some of them have even worked in the mall when it was a mall.

Sonari Glinton:

I think that bears repeating.

Monise Quidley:

Some of them have even worked in the mall when it was a mall.

Sonari Glinton:

So how did living in it as a homeless shelter go over?

Monise Quidley:

Well, I think they were a little happy in one aspect because since everything was brand new, they were getting brand new rooms and brand new beds and mattresses, but it was also, for some, reminding them of where they had been previously.

Sonari Glinton:

Is there a more tangible reminder of your town's better days than an abandoned mall? But there were bright spots.

Monise Quidley:

At one point, we had a carnival that lasted about a month, which was right outside. Because think about it, there's lots of parking.

Sonari Glinton:

The children were all excited, but the shelter didn't have the funds to cover the tickets. And then a donor came through and paid for everyone to go.

Monise Quidley:

It was really nice that people who were experiencing a crisis were able to just let their children be children for two hours and not have to worry about how the ice cream would be paid for or what rides they could get on.

Sonari Glinton:

The carnival left, as they always do, and a Christmas tree vendor showed up in the lot. Monise says there was always something going on.

Monise Quidley:

Was kind of like we came and then life came back to the mall. Because at that point, it was kind of like nothing really much going on, but it was like we bought the community back to it. So that was good.

Sonari Glinton:

We brought the community back to it. Can you hear that, Victor Gruen?

Sonari Glinton:

One of the things we often forget about malls is that they weren't built with flexibility in mind.

Ilse Metchek:

If the people move away or the people change, then the mall can't move. It's there. The mall can't move. People can move.

Sonari Glinton:

But malls can reinvent themselves to meet the changing needs of people. Carpenter Shelter moved out of the Landmark and into their forever home last November, and early this year, Landmark developers announced the plan to turn them all into a hospital campus with mixed use housing, retail, and green space.

Monise Quidley:

Designs and things of that nature might have to be tweaked, but I think it's great to have that space used again because it's right in the middle of the community.

Sonari Glinton:

And that makes very valuable, valuable real estate. Some of these dark malls have already become offices, colleges, recreation facilities, senior housing complexes, even churches. Some have become Amazon fulfillment centers. I think that's called the irony. Here is a huge opportunity here, and developers are always trying to find the most financially rewarding solution. They need to make money. Best case scenario ...

Ilse Metchek (26:29):

That they'll be the social framework of a community. Everything will be repurposed, but they will be the centers of a community.

Sonari Glinton:

I was thinking about my conversation with Ilse Metchek. You know the only thing that I bought in a mall the whole year of the pandemic is a refurbished army jacket that has a giant image of Muhammad Ali on the back. I bought it from a local artist in a pop-up shop that definitely wouldn't have existed at a mall a few years ago. Now, to be honest, I might go back and see what shows up there next.

Sonari Glinton:

As Ilsa Metchek would say, fashion and malls are about being relevant. And what's more relevant at this moment than community?

Sonari Glinton:

The mall is dead, I guess. Long live the mall. On our next episode, we study up on how the pandemic has created opportunities to rethink college. I'm Sonari Glinton and this has been Now What's Next, an original podcast from Morgan Stanley. Thanks for listening.

 

Malls were originally designed to be the centerpiece of a community. For a long time, they were. Between the boom in online shopping and over-retailing, many malls were struggling even before the pandemic. Now, experts predict every 1-of-4 malls in the U.S. may close over the next five years. In this episode, we visit malls from around the world to figure out why we go, how to build them more sustainably and how architects, retailers and communities themselves are reimagining their revival.

As head of the California Fashion Association, Ilse Metchek visits a different mall every week. She believes malls are no longer about shopping, they’re about experiences. To get a sense of how top-tier experience malls work, we head to Singapore, where  restaurateur Howard Lo takes us inside the world-renowned Jewel Changi. Next up: Melbourne Australia, where architect Stephen Choi gives us a tour of Burwood Brickworks, a mall designed around sustainability and climate change. Lastly, we visit Landmark Mall in Virginia, where Monise Quidley was part of turning a defunct Macy’s into a homeless shelter.