“Dead malls” have been a common phenomenon in America for a decade, thanks largely to the twin forces of the Great Recession and the rise of online shopping, in particular Amazon.
Now the concept appears to be migrating across the Atlantic to France, where shopping center vacancies have reached 11.2 percent, according to a new report from UBS Group AG analysts Charles Boissier and Osmaan Malik, as reported by Bloomberg. By 2023, the investment bank forecasts that 20.6 percent of stores in the country’s malls will be empty — more than double the vacancy rate the U.S. saw in the third quarter of 2018, when it hit a seven-year high.
“This is well on track to reach what was labeled as a bearish forecast in a supposedly strong market,” the analysts said in the note. “This is the start of a downward spiral that can lead to ‘dead malls,’ a concept that was so far used mostly for the U.S., generally foreign to France.”
While the U.S. has been reaping the rewards of a strong economy in the past year — and is still losing a record number of stores to bankruptcy and downsizing — France has been roiled by political upheaval at home and economic uncertainty throughout Europe. “Yellow vest” protests — a movement that started in response to a fuel tax but has since come to encompass a range of frustrations about government policies — have disrupted the country’s retail sector for months, both for luxury brands along the Champs-Élysées shopping corridor as well as suburban stores and mall owners.
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French retail association Fédération des Entreprises du Commerce et de la Distribution, or FCD, estimated that the country’s retailers lost €2 billion ($2.25 billion) in revenues over the course of the November and December protests alone.