NORTH COVENTRY – Few would argue that the Coventry Mall has seen better days – at least, as a mall.
But it could soon see better days as something different, like ‘The Shoppes at Coventry’.
The economic challenges facing the mall, exacerbated like so many things by the COVID-19 pandemic, are not unique to this location.
In 2020, CNBC predicted that 25% of malls nationwide would close in the next five years.
On December 11, 2020, the Pennsylvania Real Estate Investment Trust, which owns and operates six shopping centers in Pennsylvania, including Exton Square Mall in West Whiteland, Chester County; Plymouth Meeting Mall in Plymouth Meeting, Montgomery County; Willow Grove Park Mall in Willow Grove, Montgomery County; and Springfield Mall in Springfield, Delaware County emerged from bankruptcy.
But on February 4, the company received a formal notice from the New York Stock Exchange for non-compliance with the exchange’s continuing listing standards. These standards require common shares to maintain a minimum average closing price of $1 per share over a consecutive 30 trading day period.
Since Jan. 10, closing prices for the company’s (NYSE:PEI) shares have ranged from a high of $1.19 on Jan. 10 to a low of 74 cents on Jan. 28. On Thursday, February 16, the closing price was 90 cents.
The company released a statement saying it plans to return to compliance, but Robert Sichelstiel isn’t so sure the big picture paints a bright future for shopping center owners.
“I no longer believe that indoor malls as we knew them are viable. With the possible exception of the King of Prussia Mall,” they are closing nationwide, Sichelstiel, chief financial officer of Plymouth Meeting-based Pennmark Management Co., told MediaNews Group on Thursday.
He would know.
His company manages approximately three million square feet of retail space in 25 locations. Pennmark bought the Coventry Mall in April 2016.
“I mean Coventry Shopping Center is in a great location at the intersection of Route 100 and Route 422,” Sichelstiel said. “If it can’t work there…”
Already struggling to stay above water before COVID-19 changed everything, many malls now face a radically different retail environment.
Amazon has made it unnecessary to leave your house to shop, a decisive advantage during a pandemic shutdown. Plus, shoppers no longer have to travel from store to store looking for an item. Everything is accessible from a comfortable chair via a keyboard or smartphone.
Even restaurants are dancing to adapt to a world in which customers don’t just want takeout, they expect it to be delivered to their front door and they don’t expect to pay. a supplement for the service.
Facing these realities led Pennmark to realize that the mall cannot survive in its traditional model. The successful revitalization of the nearby Coventry Square strip mall, now full except for one store, has shown the way.
If you noticed construction at the mall, it was about repurposing retail spaces to face the outdoors, Sichelstiel said.
A new restaurant, Big Phil’s Bar and Grill, will open in the space formerly occupied by TGI Friday’s. “They should be open any day now,” he said. A visit to the site revealed an application for a liquor license in the window.
In addition, the adjacent south-facing part of the mall is getting a makeover and has a new entrance. “You saw how we moved JoAnn’s Fabric’s to an outdoor location and we even just signed another new flagship store, Rose’s Department Store,” Sichelstiel said.
It will occupy the other half of the former Sear’s site not occupied by Gabe’s.
“And we’re talking to some of the other merchants — Kay’s, Books-a-Million — to move them to outside positions,” he said.
As for the other more indoor sections of the mall, rumors posted recently on social media – that the inside of the mall will be turned into self-storage units – are only potentially true.
What’s true, Sichelstiel said, is that several options are being considered for the interior of the mall, including, yes, self-storage. Also on the table is the destruction of part of the building and its transformation into green space.
Complicating the decision, Sichelstiel explained, is that the leases of longtime flagship stores — Boscov’s, Dick’s Sporting Goods, Kohl’s — give them a say in what goes on inside. “They all have interior entrances to the mall, so what happens there has a huge impact on how they operate. And remember, each of them has to answer to a corporate hierarchy.
“We were hoping to have a decision by April, but at this point all we can do is make the changes to the exterior entrances,” Sichelstiel said.
“And remember that these decisions all have a cost. It costs almost as much to tear down part of the mall as it does to renovate it, and we’re not working with a pension fund or Wall Street money here. This is all real local money, so we have to do what’s best for everyone as much as possible,” he said.
Another difficulty relates to zoning, which currently permits current uses, but may not permit some of the intended uses.
North Coventry Township Manager Erica Batdorf responded to a question from MediaNews Group noting that currently no official plans have been submitted to the township, either for zoning changes or otherwise. “We would welcome an overall mall site master plan to further discuss opportunities with Pennmark,” she wrote.