Are ‘dark stores’ the new trend in the retail apocalypse?


Working example: Macy’s lately turned shops in Littleton, Colorado, and Dover, Delaware, into Omni Service Facilities. Now closed to on-site procuring, these places might be staffed to ship orders, fulfill pickup orders, settle for bank card funds, and some different companies. For instance, Macy’s will provide a digital procuring expertise, the place prospects can talk with gross sales associates on social media. Employees at these shops will be thought-about for brand new roles at Omni Service Facilities, or they could have the chance to be employed by one other location. Those that do not stay with the corporate could also be eligible for severance compensation.

Let’s take a more in-depth take a look at what the darkish retailer mannequin means for Macy’s.


The excellent news

First, it is nice Macy’s is working onerous to determine different methods to remain afloat. Whereas the darkish retailer mannequin ceases in-store purchasing for Macy’s prospects in Dover and Littleton, it additionally means these two shops have not gone out of enterprise fully.

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In fact, for buyers in mall actual property funding trusts (REITs), it is at all times good when retailers will pay the hire. By shifting gears, Macy’s is ready to nonetheless occupy the house and cater to each native and distant prospects.

And therein lies the issue.

The unhealthy information

That these two Macy’s can nonetheless pay the hire will make REIT buyers blissful. Mall REITs have undoubtedly taken a beating throughout the pandemic. Macy’s is Simon Property Group’s largest tenant. The REIT has seen its inventory plummet over the previous 12 months, with quite a few retailer closings even earlier than the pandemic.

However conserving these places open as darkish shops means the true property is getting used, however consumers will not be coming round. To be honest, on-site procuring is hit-or-miss today due to social distancing and pending lockdowns because the second wave of COVID-19 arrives.

Nonetheless, REIT buyers would seemingly favor the choice of utilizing the business house for one thing else aside from a success heart. If the darkish retailer mannequin proves profitable, this might imply extra places shutter to the general public sooner or later — which means extra procuring malls might be reworked into veritable warehouses.

Is there gentle on the finish of the tunnel?

The wonderful picture of the division retailer big writ massive in “Miracle on thirty fourth Avenue” has definitely light. However Macy’s remains to be hanging on. By 2020 requirements, it is a success that the division retailer has been in a position to save two of its shops from closing.

As we head into the vacation season, these darkish shops will hopefully be buzzing with order fulfillments. Will they be right here to remain for the long term, or will they ultimately shut like so many others? Solely time will inform. However for now, we’ll be optimistic that shops are embracing different enterprise fashions to maintain the lights on.