Is it the beginning of the end for Valley Plaza mall?
Last month Sears filed for bankruptcy and announced it would be shuttering yet more stores nationwide in its latest round of closings. Among them is Sears at Valley Plaza, leaving a huge two-story void at the aging shopping center.
"Nobody knows where retailing is headed," said Robert Bridges, associate professor of Clinical Finance and Business Economics at the USC Marshall School of Business.
Bridges, who specializes in real estate feasibility and urban economics, believes the end is near for traditional malls, which rely on giant big-box department stores as anchors to bring in customers. And if the analysts at bank and investment company Credit Suisse are right, 25 percent of U.S. malls -- 1 out of every 4 -- will close by 2022.
Could Valley Plaza be among them?
Not everyone is quite ready to say yes. No doubt Valley Plaza will take a hit from Sears' pull out.
"Valley Plaza can look at this as a blessing or a curse," said Nyakundi Michieka, assistant professor of Economics at Cal State Bakersfield, who studies local economic trends in Kern County.
"The blessing is that Valley Plaza can reconfigure itself to adapt to what consumers of today want," said Michieka.
But hey, Sears occupies two floors. That's a lot of empty space to fill, isn't it?
"You've seen malls split that space up and put in gyms, offices, a children's play area, a church and even a car show room. There's just so many things that could go in there and some malls are even putting in indoor gardens," Michieka said.
OK, that's the upside. And the curse?
"Once you have a business of that magnitude leaving the mall, you tend to see reduced consumer traffic, less people going in to shop," said the professor.
Further, he said, if the void left by Sears stays empty for an extended period, customers tend to stay away from that part of the mall and neighboring stores could feel the effect.
I called Valley Plaza management to find out how they're planning on filling the void, but no dice — they weren't talking. I was directed to their corporate office in Chicago, but no one returned my call.
There's other collateral damage. An untold number of employees will soon be out of a full- or part-time job. And the city of Bakersfield loses out on the sales tax revenue generated by Sears.
"We would expect a slight decline due to the closure," said Nelson Smith, finance director for the city.
Just how much revenue is unknown because the state prohibits cities from divulging that kind of information from an individual business, said Nelson. But what the city did say is that Valley Plaza as a whole generates $2 million to $2.5 million in sales tax revenue each year. That's about 3.4 percent to 3.8 percent of the city's annual sales tax revenue.
For the past five years, the city's sales tax revenues have remained "pretty flat," Nelson added.
Michieka isn't ready to predict gloom and doom for Valley Plaza in spite of the fact one of its anchor stores is leaving.
"It's still a little bit too early to conclude something like that," said Michieka. "There's still a large population that likes to go to a store and try on something and if it doesn't work out, take it back," he said.
Founded in 1892, Sears quickly became the largest retailer in the country; it was an institution. But like so many others, it became the victim of e-commerce — the "Amazon effect," as the city finance director calls it.
Longtime customers are disappointed. Vidal and Maria Gonzales of Bakersfield have been loyal Sears shoppers for 30 years.
"The merchandise is good quality and affordable," said the husband.
The couple were walking out of the store recently when I spoke with them.
Maria was more sentimental. "It's sad; we don't like that it's closing," she said in a somber tone. "We will miss it."