Too Many Stores & Malls: Impact On Coin Shops

I know more coin shops are online and do their business at coin shows, but physical locations do still exist.

I read a fascinating report from a Wall Street firm that said that we were overmalled and overstored by alot. Malls about 35%; strip malls 10-15%. In the bullish case, malls overstored by 25% and bearish close to half (45%).

Could mean an opportunity for NEW stores or pressure existing ones, though if most coin shops are stand-alone or in strip malls they are better insulated from the big malls.

 

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There is an over abundance of strip malls around me. I would take a wild guess and say that of the 6-8 small strip malls within ten miles of my home, they are likely at 50-60% capacity. My dealer buddy has his shop in one of those strip malls that is half empty. Last time I was there he told me the property manager was raising his rent substantially. I am sure the property manager can't make the mortgage with half the mall spaces empty. If my dealer buddy finds a more reasonable outlet, they will have one more empty space!

 

When was that, Randy ? I know of no one who can raise rents after C-19 in March.

Going forward, unless your friend is in a unique location, hard to believe he won't have lots of real estate options.

 

The way my memory is, that may have been last year.... I swear it was summertime though. The conversation came up because his air conditioner was on the blink (an absolute must when you are deep south).... One of those deals where my guy has been there since forever and is very established. It's just that the strip mall is dying around him. Besides his shop there is a small police satellite office and a Subway sandwich shop. The big anchor store has been long gone.

 

What are malls? Do they still have rotary phones?

 

Even in the South with population and stores relocating.....hard to believe his landlord can raise rents with no anchor tenant replacement and more empty space.

Wonder if he's bluffing...

 

From that same report...Growth since 1970.....U.S. Population @ 50%.....Malls @ 300%....Strip Malls at 375%.

 

However, the population was much higher, so to achieve a 50% growth is phenomenal. With far fewer malls (strip or otherwise), it's not as impressive.

E.g. population from 200,000,000 to 300,000,000 - 50% growth

Malls from 200 to 750, - 375% growth.

I'm not saying there aren't too many, but rather Mark Twain, "There are 3 types of lies; lies, damn lies, and statistics."

 

When I was graduate school, I did a paper on malls and how they collect their revenue. There are "anchor stores" and then there is everyone else. “Anchor stores” include all of the big names that are usually at the end of the hall in a mall. They get sweetheart deals to come into the mall.

The others have to pay for their walls in the mall and their interior designs. Their rent includes a percentage of their sales. I don’t know a coin store can make it under those conditions given the usually low mark-ups that dealers get. I know the mark-ups are getting higher, but I don’t know that it would be enough.

Add to that the cost of security, during the day and night. I don’t see how a coin store can pay for all of that and compete with the on-line operations.

 

But the TOTAL SQUARE FOOTAGE (highest in the world) as well as the NUMBER OF STORES showed that increase, MK.

And the base in 1970 wasn't 37 malls and 12 strip malls or some ridiculous low number.

And we're talking TOTAL, not ANNUAL GROWTH. So the statistics aren't lying here, they're telling a KEY STORY: that we have too many stores. We knew that for years...but online, e-commerce, and now C-19 Virus have accelerated the trend.

As an example: Macy's generates 40% of its profits from 8% of her mall space....COSMETICS. They don't need all the clothing and housewares and other stuff anymore than they need a sports section or TV section (both since gone).

 

I don't recall ever seeing a LCS in a Mall, John....all the ones I've visited have been stand-alone or in strip malls (small ones at that).

 

Sounds like one of those damn lies...

 

I knew a dealer who opened a store in the big mall from which I did my paper. He didn't do very well and was out in a short time. The magager was really kind and give me a personal tour with a lot of the "trade secrets" of the time. This was in the late 1970s. The manager even commented that the coin dealer "wasn't doing very well.

Earlier he had been in a much small mall in a area called "The Antique Village." He did pretty well there, but left for whatever reasons.

 

Restaurants are another part of the economy that is wildly overserved which is why most restaurant owners struggle and scrape by unless they are in the prime location and charging an arm and a leg but also serving quality products. I mean I really can't go a block without seeing another place to eat and it's not a new occurrence.

Anyways, Most coin stores make their money serving their regulars, and going to every show possible, As far as My LCS, I think the dude lives in the back room. Some also supplement with online sales. But my LCS does everything for the regulars, and basically hangs a sign and shuts down when he's going to shows.

it's got to be serving a normalized list of regulars I'd think, that or doing the "we buy gold and silver" thing, but like I said, when there's shows he hangs a sign and locks the doors, and says screw it to the PM sales and buys.

 

No, a hard data number....I do believe it is SQUARE FOOTAGE and not necessarily number of malls, though the 2 data points probably track (difference would be malls that expanded but most malls are space-limited on expansion based on land and zoning restrictions).

 

I see those places on busy routes in less-built up areas in my areas of NY and NJ. Rents must be lower there...taxes too....and they all have the WE BUY GOLD/SILVER etc...never went in them, may or may not have numismatics. Could be a pawn shop that deals mostly in metals.

 

I used to have a fellow that fixed my office equipment. Copiers and such. One day the subject of coins came up and low and behold the man had a small safe under his seat cram full of gold and silver. It was a side thing for him. He eventually upon Ed a we buy gold place and quit with the copier repair. I purchased the bulk of my gold from the fellow back in the 1990’s. I need to look that old boy up.

 

I was referring to: Malls from 200 to 750, - 375% growth.

It's 275% growth.

 

Well, I can tell you that the total number of full-fledged malls is about 1,400 so whatever number grows to 1,400 after 50 years is what we had in 1970.

If folks want I can post the report here if folks want to see it. Trying to confirm the conclusions from a REIT specialty boutique that covers malls.

 

Overmalled? Definitely! In my area (NE Ohio), many of them have either closed or are on the verge of closing, and have been long before the coronavirus. They've literally become ghost towns in horrible disrepair in some cases. One of them has been converted to an Amazon distribution center, and that, in a nutshell, is why many are closing. Online sales and shoplifting have killed them. Another thing that has killed them is the ridiculously high rent. I remember one time maybe about 15 or 20 years ago when one local mall was having a collectibles show. One of the toy stores complained about it long and loud because the dealers out on the mall floor were underselling them on Beanie Babies. I used to frequent the sports collectibles shows too. When the malls in my area died, the shows died with them.