How the mall is evolving

Primark and Dick's Sporting Goods jointly occupy the space once held by Sears at the King of Prussia Mall.

Smaller may be better - and that's why so-called junior anchors are invading the nation's malls.

Traditional, supersized anchors are struggling - Sears, J.C. Penney, and Macy's among them - and are shrinking their real estate footprint amid the onslaught of online shopping.

In their spaces are smaller stores with proven track records and a niche, such as Dick's Sporting Goods; Legoland; Round 1, which is similar to Dave & Buster's; and trendy European fashion retailers, such as Primark.

For mall owners, such stores can attract a different clientele at a time when mall traffic is falling. It's also a more efficient use of space: Two junior anchors can replace a shuttered anchor and give consumers more choice, both in shopping and entertainment.

"New, popular tenants can often reinvigorate a shopping center," said James Cook, Americas director of research and retail for Jones Lang LaSalle. "Department store anchors are finding that, in many cases, they can be equally productive in half the space."

Only a Sears remains as an anchor at Burlington Mall in Burlington, renamed the Marketplace at Burlington.

The space vacated by a Macy's and J.C. Penney two years ago "will be subdivided into junior anchors," said Shawl Pryor, director of real estate for new mall owner Moonbeam Capital Investments L.L.C.

He cited a Ross Dress for Less store as a possibility, or "anything of 25,000 to 75,000 square feet." Pryor said he's seeing the strategy play out everywhere. "We feel we will have a stronger tenant mix with more users with smaller square footage," he said.

Retail analysts say that not all traditional anchors are doomed. High-end stores such as Saks, Nordstrom, and Neiman Marcus, among others, continue to thrive, while discount retailers still are growing steadily.

But "middle-market department store anchors and other middle-income retailers are finding a tough going," Cook said. "Today's consumers want their goods either fast and cheap, or high-quality and expensive. There's not much room in between."

Here are several examples:

The former J.C. Penney at Cumberland Mall in Vineland is being replaced with a Dick's Sporting Goods;

The J.C. Penney at Exton Square Mall is out; a Round 1 with a bowling alley, arcade games, and eating area geared toward children has moved in;

Sears' departure at the King of Prussia mall made way for a Dick's and Primark to enter the red-hot market;

A Legoland Discovery Center is taking over nearly half of the food court at Plymouth Meeting Mall.

"It speaks to the desire to drive traffic through various venues, not simply department stores, which is how malls were originally conceived to attract shoppers," said Heather Crowell at Pennsylvania Real Estate Investment Trust (PREIT), which owns several area malls that are installing junior anchors.

Experts say the trend is driven by both economic and cultural shifts - such as the Internet. Retailers with a presence in both physical stores and on the Web can service customers with less space than before.

"There's no need for huge sales floors when less popular items can always be quickly shipped to the store or the consumer's home from a central distribution center," Cook said.

Call it the mall version of natural selection, where the weakest performers are weeded out.

"If the former anchors aren't bringing people, they need to find new ones that can," said retail analyst Simeon Siegel at Nomura Securities International.

That's precisely PREIT's plan in bringing Legoland to ailing Plymouth Meeting Mall, which struggles against nearby King of Prussia Mall.

"I'm all for it," said Sondra Hyman, a retiree from Plymouth Meeting, as she sat in a children's play area next to where Legoland is set to open next spring.

Joseph Coradino, chief executive officer of PREIT, said the Gallery at Market East, which will be renamed the Fashion Outlets of Philadelphia at Market East after a renovation, will house junior anchors. He declined to give any names.

Coradino said he first noticed the trend of smaller anchors in 2006 and 2007, driven partly by a lack of new enclosed mall supply. Only one new indoor mall has opened in the United States since 2014: the Mall at University Town Center in Sarasota, Fla.

Another reason, he said, was that big-box retailers such as Dick's began looking beyond open-air strip malls and at enclosed malls as potential sites, especially in urban areas such as Philadelphia.

"We're seeing the highest [mall] occupancies in a long time, maybe in decades, as a result of the brick-and-mortar closings," Coradino said. "And we're seeing an influx of European retailers, like Primark and Zara. The influx of them coming into this country, given the limited new supply of malls, is making it difficult to accommodate them."

Junior anchors can give mall owners an alternative use of the space besides retail.

"Entertainment has become a big part of it," he added. "If you have somewhere to eat, and also shop, even better."

Anchor vacancies are giving newer retailers entrée to prime space they never had before, said Steven H. Gartner, executive vice president at commercial real estate firm, CBRE Inc.

Gartner would know. He's negotiating leases for new tenants to move into the sprawling Macy's space at Suburban Square in Ardmore. The 99,000-square-foot store closed to the public on March 20. It was one of 36 closures nationally by the giant retailer in the first quarter.

"We used to have major local and regional department store chains, such as Strawbridge & Clothier and John Wanamaker, that could market more effectively to a local market," he said. "New items would have lavish unveilings, backed by extensive print and broadcast campaigns.

"These [old] anchors used to generate massive amounts of traffic. Today, a group of restaurants in a mall can often generate that same amount of traffic and sales dollars," he said.

Savanna Raby, 23, of Phoenixville, who cleans operating rooms at Phoenixville Hospital, doesn't miss the former Sears at King of Prussia mall, now a Primark.

"This has so much more stuff and speaks to my age group," Raby said last month after buying a pair of pants and shirt for $19. "I am definitely coming back."

Another Primark is moving into PREIT-owned Willow Grove Park Mall. It will lease about 58,000 net square feet of retail space, mostly on the second level, from Sears. The existing Sears will operate only on the lower level there.

Janine Stromberg, 41, visited Exton Square Mall last month with her four children - Aiden, 12, Owen, 10, Avery, 8, and Addison, 4 - to see the Easter Bunny.

"It's a good idea," the full-time homemaker from West Chester said of Round 1's opening in December, between the mall's Main Line Health Center Exton Square and apparel retailer New York & Co. Outlet. "As they get older, they want to do their own thing and walk around the mall.

"I can still do my shopping without feeling like I just dropped them off someplace."