So is there solution to saving the mall? Kniffen said yes: Bankruptcy.
“A lot of these malls will go through Chapter 11, and after the debt is gone they can be something else, and they can be gyms, doctor’s offices…and you can do things that don’t have to generate as much dollars per square foot, as much rents as things have to now, to carry the debt loads,” Kniffen told CNBC.
Currently there are nearly 1,100 enclosed malls in the U.S., but Kniffen stated that’s 400 too many as more shoppers flock to Web shopping. As a result, suburban malls have destroyed downtowns across America, Kniffen contended, as businesses go belly up and customers dry up.
“We have ‘over-malled,’ we have over stored, we have over shopped America, and we’re just getting worse every day as more moves online,” he stated, adding that it’s not all Amazon’s fault.
“When Walmart was 20 years old in 1982 they were 3 percent of sales and they got 50 cents out of every new dollar of sales. Amazon is 20 years old, it gets 3 percent of sales and it’s getting 35 cents out of every new dollar of sales,” Kniffen said.
He added: “Walmart destroyed traditional retailing over its rise and Amazon’s destroying its traditional retailing over its rise.” Ultimately, Kniffen predicted the online giant will buy Kohl’s, in order to gain a foothold in brick-and-mortar retail.
But if not Kohl’s, the retail expert says it will be a retailer with a large physical presence across the country.
“They’re going to buy somebody or they’re going to build a system because they’re going to have to get next to the consumer,” Kniffen added.
On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.
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