America's most iconic retailers are closing stores, and it's left many speculating about the future of shopping malls.
Macy's recently announced it is closing 100 stores, following similar announcements from Sears, Gap, and Abercrombie & Fitch.
The decline in traffic has been stunning: In 2010, there were 35 million visits to malls, according to the real-estate research firm Cushman and Wakefield. By 2013, there were 17 million visits — a 50% decline.
Analysts expect upcoming data will show an even steeper drop in mall traffic.
"The shift in how people are shopping means the future of retail fulfillment is no longer just about more stores or shopping centers," Cushman and Wakefield analysts wrote, adding that stores would need to invest in online options.
About 15% of malls will disappear in the next decade, according to a study by Green Street Advisors.
There are numerous reasons for the brick-and-mortar apparel industry's decline.
Americans are increasingly choosing to spend on technology and experiences like vacations, leaving less money for apparel. This has led to a spike in discount retailers like TJ Maxx. When people do shop at traditional full-price retailers, they increasingly prefer to do so online.
Moody's Investors Service says that closing stores is a necessary step for Macy's.
"Macy's can be more malleable in its effort to meet the changing needs of the consumer and focus its effort on stores which are better gatekeepers of its brand image," Moody's analysts wrote in a recent report. "It will also free up internal resources in efforts to grow in higher-growth areas."
But fewer "anchor stores" in malls also spells even more trouble for specialty stores like Gap and Abercrombie & Fitch. Many Americans visit a mall intending to go to department stores, then stop in other stores once they're there.
Once mall anchors like Macy's close, it could be difficult for owners to find tenants to replace them, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail-consulting and investment-banking firm.
"Teen retailers ... are all a disaster, and these middle-level malls are killing them," Davidowitz said.
There is a bright spot for the malls, at least those catering to high-end shoppers, according to The Wall Street Journal: technology-focused tenants like Tesla, Microsoft, and Apple.
Because technology is more expensive than clothing, it's easier for these stores to turn a profit. Technology stores also require fewer staff members and smaller spaces than department stores, resulting in fewer overhead expenses.
More From Business Insider