Yahoo Finance It’s all fun and games now at these dead former Sears stores
In Florida, a handful of dead mall anchor Sears stores, left vacant and unmoored by the iconic retailer’s bankruptcy six years ago, are being jolted back to life.
They won’t be resurrected into new stores, but they’re definitely being primed, one company hopes, to pull in plenty of families who’ll find it hard to resist spending money again in these big-box spaces.
That’s because even as households are skimping on buying more stuff, they are opening their wallets to eating out and entertaining themselves at places such as concerts and amusement parks.
Michele Oca, founder of Tampa, Florida-based design and marketing firm US Design Lab, specializes in conceptualizing, restyling and jumpstarting empty commercial spaces by packing them with fun.
“Think bowling alleys, arcade games, rope courses, go-kart tracks, mini golf, laser tag,” he said in an interview with CNN. Encircling all of these attractions are restaurants and bars.
Oca’s client, real estate investment firm E8 Properties, has been buying empty Sears stores, dusting them off and converting them into “Elev8 Fun,” a massive indoor family entertainment park created in partnership with Primetime Amusements, a provider of video arcade machine.
The first one, designed by Oca and his team and housed in a 120,000-square-foot former Sears building attached to the Seminole Town Center Mall in Sanford, Florida, opened in January 2022.
Since then, E8 Properties (which develops family entertainment centers) continues to expand Elev8 Fun in Florida. Oca said all venues Elev8 Fun uses are converted commercial spaces of more than 100,000 square feet.
The company’s second space, also in a former Sears store, opened at the Citrus Park Mall in Tampa in May 2023, while a third location — in a converted Sears at the Treasure Coast Square Mall in Jensen Beach — is expected to open next summer.
A fourth planned location, at a former Kohl’s store at the Miami International Mall in Miami is expected to open in late 2025.
Entertainment over shopping
Adding more entertainment versus shopping tenants to malls could be an effective way to not only pull in more visitors as malls strive to stay relevant to younger shoppers, but also fill empty real estate space that could be immune to the shopping mall’s scourge of online shopping.
People can’t order a go-kart track off of Amazon, after all.
“If you take a look at year-over-year retail sales growth by different categories, department stores, furniture, sporting goods, electronics retailers, those are the typical mall tenants that are being eaten up by ecommerce options whereas the experiential things are really bringing in the foot traffic,” said Victor Calanog, managing director, global co-head of research and strategy, real estate, with Manulife Investment Management.
Fun experiences, such as indoor amusement parks, arcades, pickleball courts and escape room adventures are what economists categorize as “non-traded goods.”
“You can’t exactly buy them or replicate them online, you need to experience them yourself,” Calanog said. “I do think it’s as good of a strategy as any, and then it becomes an execution issue and how well these concepts are marketed to bring in the families as an entertainment destination.”
To his point, increasingly, more malls are morphing into family entertainment destinations where shopping may not even be what draws shoppers in.
Industry analysts said research shows that adding entertainment experiences shifts more money to mall retailers and not away from them. Through the pandemic and coming out of it, the popularity of pickleball made its way into malls with courts popping up next to skating rinks. Indoor skydiving, Legoland theme parks, virtual golf and microbreweries are other concepts catching on.
Calanog said there is a reckoning that physical stores, and not just malls in general, “are trying to figure out what is our unique value proposition versus other substitutes.”
Still, whether it’s a Sears or a defunct Kohl’s store, taking an empty shell of a large department store to repurpose it into something completely different isn’t easy.
“There are many unique challenges. Those stores have a lot of columns and it wasn’t easy to fit attractions like Go-Karts and bowling through those columns,” said Oca.
The completed Elev8 Fun projects, he said, took over a year to build and cost more than $15 million on average per location, including buying the empty space to refurbish and retrofit with multiple attractions.
“We didn’t just create the layout and look and feel of the space, we also created the brand name and logo of this new entertainment chain concept for our client,” he said. The team also studied the local demographic and competitors to decide which attractions made sense to include in each new Elev8 Fun center.
“If there was already a big bowling center a couple of blocks away I wasn’t going to put bowling in the Elev8 Fun location near it,” he said.
The only real competition in family entertainment in Sanford was about 30 minutes away in Orlando with Walt Disney World and Universal Studios. “Sanford was a pretty virgin market but it has a large residential area. So we decided to put all of the attractions that we could into that former Sears store,” Oca said.
At the Tampa Mall location, Oca expanded the fun outside by adding an outdoor rope course outside of the renovated Sears building in addition to all of the indoor activities.
Jim Hull, founder of Hull Property Group, which owns the Citrus Park Mall in Tampa, told CNN that mall owners and operators need to relentlessly pursue compelling ideas to keep mall goers entertained and spending money.
“Elev8 Fun passes the first test of being well conceived. It also passes the second test of making a prominent statement,” said Hull. “It’s a transformational facility that is clever, inspirational and aspirational.”
Hull estimates that Citrus Park Mall has seen about a 5% bump in sales from the addition of the indoor park in the old Sears store. “But it’s so dependent on good stewardship, on relentlessly pursuing their business and their customers,” he said.
“I’m not sure everyone coming in there will cross shop the mall. I don’t really want anyone in the mall who is not shopping. We are very disciplined about that but we are also very interested in facilitating the overall experience of our customers,” Hull said.
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