Sad Santas Confront Empty Malls: ‘Do I Have Something In My Beard?’ (#GotBitcoin?)
Vacant storefronts don’t herald jolly holidays for professional Kriss Kringles; ‘I have a book for when it’s really, really slow’. Sad Santas Confront Empty Malls: ‘Do I Have Something In My Beard?’
Rick Moody says he arrives early for his shifts as Santa at the Auburn Mall, puts on his red suit, settles into his oversize chair in center court and starts “working the crowd.”
In a mall where Santa’s stage is ringed by vacant storefronts, sometimes there is no crowd. Luckily, there is no clause against reading when he doesn’t see much foot traffic.
“I have a book for when it’s really, really slow,” the 61-year-old mall Santa says, pointing to a Western paperback titled “Straight Outta Tombstone” tucked behind Christmassy coloring books he keeps in a red basket by his throne. And when children aren’t around, “you wave to the customer-service people,” he says of mall employees in a nearby booth.
’Tis the season when shopping malls bring in jolly, white-whiskered Santas to pose for photos with children. And the slump at many shopping malls means more downtime for Santa, and for the photographers and elves staffing the operations.
“The guys have basically become a decoration,” says Robert Turner, a working Kriss Kringle and board member of the International Brotherhood of Real Bearded Santas, a professional organization that now goes by the abbreviation IBRBS to be inclusive of Mrs. Claus.
One Santa Mr. Turner knows passed time in a slow Louisiana mall by bringing wood to carve. “He actually whittled.”
Many mall Santas are sledding off to more exciting venues, Mr. Turner says, from corporate events to house parties. “We, as a Christmas community, are trying to help these guys adapt,” he says.
Some malls, particularly new or recently renovated ones in great locations where incomes are high, still draw more than enough people to keep Santa booked.
Yet many older malls are sputtering in the face of changing consumer shopping habits and a glut of shopping centers. Mall vacancies rose to their highest level in seven years in the third quarter.
At Frontenac Mall, a 51-year-old Kingston, Ontario, shopping center grappling with vacancies, Santa has a ho-ho-hum schedule, according to Blaine Fudge, the mall’s property manager. “You could literally walk right in and see him,” he says.
Don’t feel sad for unbusy Santa, adds Mr. Fudge. “He’s got a nice reclining chair he sits on, and he can certainly walk around.”
The slower pace may appeal to new Santas still learning the reins and older ones with memories of long lines, says Ed Taylor, who runs the Santa Claus Conservatory, a Santa training school.
Mr. Taylor teaches students that mall Santas need to be careful not to appear bored when business is slow.
“We do training on the resting smile face,” he says. “You don’t want to be caught in any kind of thing that doesn’t feel upbeat and Santa-like.”
David Nelson, a professional Santa in Fontana, Calif., felt about as popular as fruitcake during a recent mall gig.
“Nobody would come see Santa,” says Mr. Nelson, who is 65. “Your mind starts going, why? Do I have something in my beard? You have to get yourself snapped out of that.”
Santas at slower malls also have to be prepared for kids who linger for long visits since no one else is waiting. Santa can run out of material.
“You have to learn time fillers,” Mr. Nelson says. “I have pictures of reindeer and a back story of each of them, so I can stretch the time.”
One Sunday earlier this month, the Santa in a giant chair in the center court of Silver City Galleria in Taunton, Mass., checked his smartphone during a lull. The mall lost Sears in November, Macy’s and Best Buy in 2017 and a J.C. Penney in 2015.
“There is not a lot of foot traffic,” said Bart Wortley, the 57-year-old Santa. He motioned to two people running the Santa photo operation.
‘It’s OK,” he said. “The elves that are here are funny, and we just entertain each other.”
Andrew Mellody brought his 10-year-old son there to avoid lines.
“We were in and out,” said Mr. Mellody, who is 47.
Jessica Barber, a loan officer, says a friend happened to spot and snap a photo of a lonely Santa near empty stores at the Chesterfield Mall in Missouri. Ms. Barber felt sorry for him and decided recently to start a social-media campaign. She also took her adult co-workers to get photos with the Santa.
“Look at this sweet Santa waiting for kids,” Ms. Barber, 41, wrote in a Facebook post shared nearly 3,000 times.
The social-media campaign and local publicity resulted in a line for Santa visits the following weekend, a mall spokeswoman says.
Chesterfield City Administrator Mike Geisel is glad to see Santa getting more attention. “They have an excellent Santa there at Chesterfield Mall,” he says. “He’s an underutilized asset.”
Sluggish Santas inspire pity in some shoppers. “Look! Santa is so lonely. Let’s go have our pictures taken!” Laura Liudahl, a 43-year-old baker In La Crosse, Wis., recalls telling her sons after seeing St. Nick sitting alone at a mall there. “What went through my mind is that, God, that dude has to be so hot and so bored.”
In Auburn, Maine, a small city about 40 miles north of Portland, the Santa business isn’t what it used to be, says David Lee, the manager of the Auburn Mall, which opened in 1979.
Still, Santa remains popular, he says, adding that visits pick up on weekends and closer to Christmas.
Dressed in his red furry suit with a “Ho Ho Ho” rug at his feet, Mr. Moody, the Santa, says the $20-an-hour gig is physically easier than his other job as a cashier, which requires constant standing.
He and the photographer sometimes each take a side of the stage and try to wave down potential customers.
On a recent Thursday evening, Mr. Moody was waving to workers over at a customer-free seasonal Hickory Farms operation. “Hey Santa, want a sample?” one shouted.
Around 6 p.m., Cindy Bray brought in her 4-year-old son for a photo. “This is awesome,” she said of having Santa to herself.
After the photo, the boy remained with Santa, clearly relishing his visit. “You can still talk to him,” Ms. Bray assured him. “There is nobody else here.”
Top-Tier Malls Are Latest Victim of Retail Headwinds
Some landlords warn of slowing income growth as they try to cope with changing consumer behavior.
For years, the prime malls with the best locations escaped much of the havoc being wrought in the retail world by internet competition.
But now, even they are beginning to feel the pain, setting off new alarm bells on Wall Street. Some of the landlords of the most highly trafficked malls are warning of slowing income growth as they try to come up with new ways to cope with changing consumer behavior and billions of dollars of sales shifting online.
For example, Simon Property Group, which owns King of Prussia mall in Pennsylvania and Phipps Plaza in Atlanta, Ga., lowered its 2019 guidance on net income to a range of $6.76 to $6.81 per share from its earlier estimate of $7.04 to $7.14. Simon executives said during the company’s third-quarter earnings call that a high number of retailer bankruptcies this year was partly to blame.
Taubman Centers Inc., which owns The Mall at Short Hills in New Jersey and Beverly Center in Los Angeles, also lowered its 2019 guidance for same property net operating income growth to zero to 1%, down from the previous 2% estimate. William Taubman, chief operating officer of the company, said the bad news was partly the result of the market overreacting to the Forever 21 Inc. bankruptcy.
“Forever 21’s bankruptcy has disproportionately impacted ‘A-malls’ and Taubman Centers specifically,” he said.
For years, many retail analysts considered roughly 260 top-tier malls to be mostly protected from store closings and bankruptcies that plagued their lower-tier peers in less affluent areas. These centers typically boast an attractive assortment of stores and restaurants, making them more appealing and relevant to customers.
But the recent bankruptcies of big-name retailers are beginning to fan further across the mall spectrum. Moreover, signs are growing that even when malls appear full, revenue growth is slowing because landlords have to cut rents to keep them there.
For example, Forever 21 has started closing 87 stores, such as its Riley Rose beauty store at Roosevelt Field in Garden City, New York. The teen retailer had earlier planned to close up to 178, but scaled that back after securing rent reductions from landlords, who in turn had to lower their earnings projections.
The average vacancy of the top malls continues to be in the respectably low 90% range. But some analysts are concerned about the higher costs landlords are facing to replace departing tenants.
Analysts also are starting to express skepticism about a major metric landlords tout: sales per square foot. Landlords typically calculate sales productivity against occupied space instead of total space. But that means stores can close without affecting the mall’s average.
Sometimes, a few highly-productive tenants can skew sales per square foot. For example, a Tesla store could raise a mall’s annual sales-per-square-foot number by hundreds of dollars.
“All it tells me is that you added a Tesla into your mall. It tells me nothing about how the mall is doing,” said Vince Tibone, an analyst at Green Street Advisors.
Investors in 2019 have punished the top mall owners, whose stocks typically outperform landlords of weaker shopping centers. This year, shares of Taubman and Macerich Co. have fallen by roughly a third, while Simon’s are down about 14%. The FTSE Nareit All Equity REITs Index gained 23% this year.
The stocks have fallen so far that some investors believe now is the time to buy. Dividend yields at Taubman and Macerich currently exceed a tempting 9% and 11% respectively.
Dividends Rise as Share Price FallsMall REITs’ dividend yields.
Bill Smead, chief executive of Smead Capital Management, said his firm recently started investing in Macerich partly because executives there have been buying their own firm’s shares. Stock purchases by executives are typically seen by investors as signaling confidence that more gains lie ahead.
But others voice caution. “They may not be as attractive as they look, especially since the dividends for some REITs are not fully covered and require cash flow growth,” Morgan Stanley Research analysts said in a note.
Simon, Taubman and other big landlords point out that they are investing heavily to come up with entertainment options and new retail strategies that combine online shopping with bricks and mortar retail. They are also spending hundreds of millions of dollars to redevelop a selection of malls, giving older ones a face-lift and adding residential, office or hotels nearby that could add value to the real estate.
“There’s a lot of redevelopment activity that is going to define the mall space,” said Ross Prindle, managing director at valuation advisory firm Duff & Phelps. “That doesn’t happen overnight.”