Richard Nixon was U.S. President when the Northwest Arkansas Mall opened in March 1972. Consumers were paying between 40 to 60 cents per gallon of gasoline, equal to $2.40 with today’s incomes, and Sears & Roebuck was the largest retailer in the country.
Sears was also the origin of the Northwest Arkansas Mall, opening a store in north Fayetteville in 1970. The mall began with phase one in 1972, which was 450,000 square feet, with Dillard’s and JCPenney anchoring the enclosed shopping mall. The mall expanded in 1997 with a new wing and larger food court.
Last summer, Jeff Bishop, senior property manager at the Northwest Arkansas Mall, said the property’s occupancy rate has historically trended above average despite being challenged by the COVID-19 pandemic. In his short speech at the March 17 unveiling of a time capsule buried on site 25 years ago when owners expanded the mall, Bishop said much has changed in consumer shopping patterns and the retail business in that time. He said mall personnel will bury another time capsule to be reopened in 2047.
Bishop’s comments come as regional malls around the country struggle to remain open with more shopping moving online. One end of the Fayetteville mall is vacant as Sears, the largest retailer in America in 1972, closed the Fayetteville store in 2017. There are also several retail vacancies in the Sears wing of the mall.
The mall has seen retailers come and go. F.W. Woolworth, Casual Corner and Waldenbooks are just a few of the retail names from the past.
Bishop said that as the pandemic subsides, mall traffic is returning after the shopping center was closed through the worst of the COVID crisis. The Northwest Arkansas Mall has more than 820,000 square feet and less than 50 retailers, not counting food or service vendors.
Three New York-based investment groups — Namdar Realty Group, Mason Asset Management and CH Capital Group — paid $39.5 million for the property in January 2016. They did not consent to an interview nor answer questions emailed to them.
Bishop told the Northwest Arkansas Business Journal the country is over-retailed and said mall owners are considering ways to develop the facility’s sprawling parking areas. He said national retailers are also downsizing their brick-and-mortar footprints and adding to the vacancies. The mall management continues to look for new tenants and experiential retail opportunities to help drive consumer traffic back to regional malls.
Northwest Arkansas Mall’s selling price in 2016 was less than one-third of the $150 million price former owners Midwest Mall Properties paid for it in 2006. Washington County property records indicate the value has continued to decline, with land and buildings having an estimated value of $19.25 million as of 2021.
The Northwest Arkansas Mall was the premier shopping destination in the region for decades. When Pinnacle Hills Promenade opened in 2006 in Rogers, regional shoppers had another choice. While Dillard’s and JCPenney operate in Fayetteville and Rogers, other retail establishments that foster experiences — such as Dave & Busters and Topgolf — picked the Pinnacle Hills area of Rogers.
Moody’s Analytics projects that 20% of the 1,000 U.S. malls will close or go through significant repurposing, saying “the American mall is not dead.” Regional mall vacancy rates remain in the double digits across the country, Moody’s reported in late 2021.
“Malls are absolutely still on the ropes,” said Moody’s economist Victor Calanog, predicting the survivors will need to repurpose space and look for revenue opportunities by developing their vast parking lots. “The in-person shopping experience that consumers seek, particularly for experiential, trendy, and/or higher cost goods, cannot be replicated via e-commerce. Given this, we expect a further evolution of the spatial relationship between malls and the mall itself.”
According to the commercial real estate services firm Green Street, at the start of 2022, there were roughly 1,000 regional malls in the U.S.
Moody’s said it tracks about 700 of them for its analysis. Calanog said the ongoing balance between store closures and store openings continues. He said that while companies like Dollar General and Five Below are growing stores, they are not locating in malls. Retailers like Burlington are downsizing store footprints which creates more vacant spaces.
Bishop said that there were more local retailers in the early days of the Northwest Arkansas Mall, and that trend is returning across the country as national retailers downsize their footprints.
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.