The Decline of Retail

It's being called the “retail apocalypse” by the media. The term explains the closing of countless brick-and-mortar stores. Even popular chains that have a history of being profitable worldwide are shutting down. This event started around the year 2010, but it started slowly and most people didn’t take notice. It was believed that the future of retail would remain strong and the stores closing were simply changing location. Some would close and others would open in their place.?

Then, retail was faced with forced shutdowns during the covid-19 pandemic. The money lost, the rough economy and ongoing restrictions led to tens of thousands of stores and malls closing their doors permanently.?

There were many reasons for the closures leading up to the covid era. For instance, the economic state of the country was in a recession in the 2000s which produced rising rent, leveraged buyouts, and bankruptcies.?

Over the last decade, consumers have changed their purchasing habits to more convenient options such as embracing e-commerce. Fashion trends and materials have also seen dramatic shifts worldwide. These things made the “retail apocalypse” inevitable.

The significant rise in e-commerce made it much more convenient to buy online than to frequent any brick-and-mortar store. People can literally buy anything online that they need. Thus, traffic slowed down and it just wasn’t worth staying open for business.

When covid-19 hit, and stores were forced to close their doors to prevent the spread of the virus, e-commerce gained even more popularity. Consumers still had to buy the things that they needed so they all turned to online purchases to avoid getting sick.?

Many people had hopes of retail having a rebound after the pandemic. But the fact is, that the financial impact of covid still lingers today. Countless stores worldwide, even the most favored retail names, struggled with trying to make back the money that they lost and becoming stronger. It's no wonder that corporate bankruptcies skyrocketed.

In every state the evidence is clear. When you look around you can see strip malls, standard malls, and big box retail buildings abandoned with no hope of returning.

Currently, there are over 300 dead malls in the United States, and the malls that have been fortunate enough to stay open don't have nearly as many stores inside as they used to. You can walk into the majority of open malls and as you're walking through the halls you’ll see several empty spaces that retail chains used to call home.

It seems that there are primarily two main trends in how to deal with these abandoned buildings. Many have already been demolished and others will most likely become industrial spaces and become warehouses for the e-commerce industry.?

But there are other options for these abandoned buildings! In this commercial real estate article series, I will be talking about real solutions for these spaces. These solutions can benefit all communities and encourage local economies to thrive and the overall growth of the family entertainment industry to expand.?

Have you read an article I’ve published here on LinkedIn and want to talk about the topic a little more? If you’d like to book a call with me regarding the Family Entertainment Industry or Private Equity, please feel free. I enjoy connecting & collaborating with others in the same professional space.

Tim Murphy is CEO of APX Operating Company, dba Boomers Parks, under the ownership of Cerberus private equity ($60B assets). Boomers Parks owns six family entertainment centers and two water parks with locations in California, Florida, and New Jersey.?

As CEO of Boomers Parks since 2020, Tim took these eight parks from bankruptcy to profitability in just a year – in the middle of a global pandemic. When Boomers acquired these parks, they were operating at a $10 million loss. Tim transformed the customer experience and added new revenue streams to generate a 180% increase in revenue in 2021 and on a similar trajectory in 2022.

Tim launched his 35+ year career at Walt Disney World and has since served more than 150 entertainment, restaurant, and food & beverage brands across more than 10,000 locations in C-suite and senior positions.

Additionally, Tim is a Board Director with Coney Park & Happy City - Family Entertainment & Amusement Parks, part of The Carlyle Group ($276B assets), a private equity firm that operates 150+ family entertainment centers and amusement parks in Latin America.?

Tim has worked with top-tier entertainment and restaurant brands including Disney, Rebounderz Trampoline Parks, Darden Restaurants (Olive Garden, Bahama Breeze, etc.), Red Lobster, Jimmy John’s, Applebee’s, Sonny’s Bar-B-Q, Denny’s, El Pollo Loco, Hardee’s, Golden Corral, and Firehouse Subs.

Tim has overseen more than 35 purchase transactions involving over 1,200 restaurants, stores, and park locations.? With extensive experience in buying and selling businesses, handling negotiations with buyers and sellers, and creating strategic partnerships to build strong brands, Tim has facilitated deals ranging from $11 million to $350 million+.

Tim is a member of International Association of Amusement Parks & Attractions (IAAPA), California Attractions and Parks Association (CAPA), Florida Attractions Association (FAA), American Amusement Machine Association (AAMA), National Restaurant Association (NRA), California Restaurant Association (CRA), World Waterpark Association (WWA) and International Franchising Association (IFA). He is a licensed commercial real estate broker in the State of Florida. Tim earned a BS/BA in Accounting from the University of Central Florida and an MBA in Finance from Orlando College.