By James Briggs
The Indianapolis Star
WWR Article Summary (tl;dr) At a time when shopping malls across the U.S. are struggling and dying, Washington Square Mall is staying afloat through an experiment of sorts. Mall owner Kohan Retail Investment Group has opened up the east-side shopping center to any entrepreneur who has a product to sell and a few hundred dollars to spend on rent.
The Indianapolis Star
If you are searching for “The Little Mermaid” on VHS videocassette with the original 1990 artwork, there is perhaps only one shopping center in Indianapolis to visit: Washington Square Mall.
A store called S&I Videos sells the tape — with a cover made famous because of an urban legend about a disgruntled Disney artist who wanted to send a message. The price tag is $10, lower than most copies you’ll find for sale online.
If an obscure copy of a Disney classic doesn’t seem like the type of thing you would expect to buy in a shopping mall, well, neither are VHS tapes or DVDs. Yet, that’s all you will find at S&I Videos, a store that was recruited from a flea market to Washington Square Mall with promises of cheap rent and occasional, if not quite steady, foot traffic.
At a time when shopping malls across the U.S. are struggling and dying, Washington Square Mall is staying afloat through an experiment of sorts.
Mall owner Kohan Retail Investment Group has opened up the east-side shopping center to any entrepreneur who has a product to sell and a few hundred dollars to spend on rent.
The result is a mall anchored by national chains Target and Dick’s Sporting Goods and sparsely filled in with mom-and-pop stores selling everything from $1,000 collectible sneakers to $2.50 DVDs.
The local tenants bring life to spaces in rows of otherwise vacant storefronts that are awaiting their next occupants.
S&I Videos has seen many neighbors come and go during its year in the mall, but co-owner Irvin Brummett Sr. is optimistic about the strategy.
“We’re hoping they build the mall up, and we’ll try and go with it,” he said.
Brummett spent more than eight years selling videos down the road at the defunct Liberty Bell Flea Market.
After New York-based Kohan Retail Investment Group acquired Washington Square Mall in April 2016, a manager approached S&I Videos about moving in.
The move has been a mixed bag, Brummett said. Sales have fallen since S&I Videos left the flea market, but the rent is unbeatable.
“We went from $1,200 a month there to $400 a month here,” Brummett said.
Cheap rent is part of the turnaround strategy for Kohan Retail Investment Group, a company that acquires and manages distressed shopping centers.
The firm bought Washington Square Mall for $2.5 million last year — six years after it had been valued at $14.1 million, according to the Indianapolis Business Journal.
Previous owner Simon Property Group handed over the 936,000-square-foot mall to lender Wells Fargo in 2014 after failing to resurrect it. The mall has since lost anchor store Sears and several of its national chains.
With little hope of attracting national tenants in the short term, Kohan Retail Investment Group is focused on bringing in anyone who’s willing to take a risk on the mall, company President Mike Kohan said.
“The national tenants are closing stores, they’re not opening stores,” Kohan said. “That’s the big challenge for the malls. But we are trying. We’re moving forward. We are hopeful we’re going to be able to pull it through.”
They key to enticing well known tenants is bringing in small businesses — dance studios, shoe stores, coffee shops, anything — that eventually will increase foot traffic, Kohan said. He estimated the mall’s occupancy at more than 80 percent, though large sections of the mall remain vacant.
“When you have traffic increases due to the fact that these guys are coming in, you can bring a food court, you can bring entertainment, the fun zone that’s going to bring the kids in,” Kohan said. “It’s a process. It’s not something that’s going to turn overnight. So you start with that, even though it doesn’t look very promising in the beginning.”
Kohan acknowledged that some of those stores barely last a few weeks before they give up or run out of money.
“Tenants that we brought, they’re temporary local tenants, but they put lights in a dark space,” Kohan said.
Kohan’s approach is offering an opportunity to people who have a vision for a store, but might not have the capital to risk signing a long-term lease at a prominent shopping center.
Paul Zigrang, a self-described “sneakerhead,” rented space in Washington Square Mall after selling collectible shoes at trade shows. His sneaker resale concept, called Grails Inc., has been so successful that he has expanded it to the Greenwood Park Mall.
Zigrang carries hot-selling Air Jordan and Yeezy shoes that can cost up to $2,000. He opened his 2,800-square-foot Washington Square Mall store about a year ago, which quickly led to plans for a much larger store in Greenwood.
“We were overwhelmed with the response and number of people coming through,” Zigrang said. “It was really unbelievable. Even during a slow time, we’re still beating numbers that we thought would have to be on a crazy weekend.”
Washington Square Mall’s everyone-is-welcome model helps all of the tenants, Zigrang said.
“They’re pretty much giving spots away here just to fill it up,” he said. “But it’s a good thing, too, because that in turn brings in business for everybody else.”
The motley collection of retailers elicits both curiosity and puzzlement from the mall’s visitors. Bob Hicks, 85, and his wife, Dorris Hicks, 82, visit the mall nearly every day — but mostly to exercise and meet friends at Target.
“The stores, they come and they stay a few months, then they close,” Bob Hicks said.
While he doesn’t think Washington Square Mall can regain the popularity it had in decades past, Bob Hicks said he doesn’t want the east side to lose its mall.
“I just hope they keep it open,” he said. “That’s the main thing.”
The odds are stacked against distressed shopping centers. Amid what some analysts have dubbed the “retail apocalypse of 2017,” national chains are closing stores by the thousands, a trend that likely will be a knockout blow for at least some malls.
Credit Suisse in a recent report predicted between 20 percent and 25 percent of U.S. malls will close during the next five years as department store chains such as J.C. Penney and Macy’s contract or collapse. The oft-discussed culprits include the explosive growth of online shopping and overabundance of brick-and-mortar stores.
But Paula Rosenblum, the managing partner of Miami-based RSR Research, called the retail-is-dying narrative “tiresome.” She compared the consensus gloom and doom on retail to “reading census information and only reading about death rates and not reading about birth rates.”
“It’s a very, very skewed picture,” she added.
Mall owners have been reinventing their shopping centers, in part by replacing stores with experiential tenants.
For instance, Simon Property Group has replaced stores at Circle Centre mall with a glow-in-the-dark mini-golf place called GlowGolf and a dining-and-games spot called Punch Bowl Social.
The retail landscape isn’t dying, Rosenblum said, but it does need more creativity.
“Everyone is tired of this sea of sameness that so many retail areas have become,” she said.
Rosenblum has not seen a national trend toward filling malls with local vendors from places such as flea markets, but she said it’s a worthwhile play for Washington Square Mall.
“The unique part to me is that it’s mom-and-pop, local businesses,” she said. “And that’s not just a desperation move. That’s a decent strategic move.”
Ollie Whitmore agrees. Whitmore in April opened Beyond the Cup, a concept that includes a coffee shop and bookstore, two offerings that Washington Square Mall previously lacked.
Whitmore knew he wanted to open his store on the relatively healthy stretch of East Washington Street near the mall, which includes retailers such as Wal-Mart and Meijer. He’s hoping to attract people inside the mall by hosting events with jazz musicians and authors.
Whitmore, who also has a goat farm in Mississippi, said he was drawn to the challenge of being a retail pioneer in a mall other entrepreneurs had given up on.
“If you can make money in a tough environment, then you can be successful anywhere,” he said.
Whitmore spent between $30,000 and $40,000 to open Beyond the Cup and is hoping, like Zigrang, to build a concept that he can expand to other locations.
“I think this mall may be actually on the edge of something as far as what the future may hold,” Whitmore said.
The mall’s shoppers aren’t yet convinced.
Jordan Hodge, 16, and his friend, Maleek Mial, 17, walked through the mall on a recent Tuesday afternoon. Both said they prefer visiting the malls in Greenwood and Castleton, but will go to Washington Square Mall for convenience.
“If I need something that day, I come here and grab it real quick,” Hodge said.
As Hodge and Mial walked through the mall, they passed occupied storefronts that were gated up because store owners didn’t bother to come in on a day that promised little traffic. The two friends acknowledged a drive to Castleton might have been worth their time.
“Here, you already know pretty much what you’re getting,” Mial said.
The future of Washington Square Mall will depend on Kohan’s ability to add retailers that change shoppers’ perception.
Brummett, standing among his 18,000 VHS tapes and 6,000 DVDs at S&I Videos, said he likes what he’s seen so far out of Washington Square Mall’s relatively new owner. But, he admits, the mall can still be a lonely place.
“One day this mall will be loaded,” he said, “and the next you can’t find a soul.”
