We can all agree it’s sad that Brookstone Inc (NASDAQ:BKST), the shopping mall favorite chock-full of fun gizmos and gadgets you didn’t really need but couldn’t quite ignore, is another victim to hard driving e-commerce.
The New Hampshire-based company, best known for massage chairs, quirky gadgets, and travel luggage, is shutting down its remaining 101 mall stores, located across the US, due to a slowdown in mall traffic and buyers shopping online.
Brookstone, which is owned by Chinese conglomerate Sanpower, has a further 35 locations in US airports that it will continue to run and put up for sale.
Lack of foot traffic at malls has plagued brick-and-mortar sellers. According to real estate research firm Reis Inc (NASDAQ:REIS) America's malls haven't been this empty in nearly six years.
READ: Brookstone files for bankruptcy protection as it shuts 101 mall stores
Circuit City, the big box electronics store that filed for bankruptcy in 2008 has been a big driver of the vacancies. Walgreens Boots Alliance Inc. (NASDAQ:WBA), Bon-Ton, Sears Holding's (NYSE:SHLD) Sears and Kmart, Best Buy Co Inc (NYSE:BBY), and Signet Jeweler's (NYSE:SIG) Kay and Jared have also pulled out of several malls.
And that's not to mention the "Amazon Effect" in which e-commerce giant Amazon.com Inc (NASDAQ:AMZN) has decimated whole swaths of the consumer retail landscape.
READ: Amazon likely to dash past Walmart in the apparel wars, says Morgan Stanly
Here is a stat that tells the sad story: Online shopping is growing at around a 15% clip per quarter, which is much faster than purchases at brick-and-mortar stores.
Mark Cohen, the director of retail studies at Columbia Business School, summed up the retail apocalypse threatening the existence of Brookstone and other mall favorites.
"They're trapped in hundreds of these B and C malls, whose traffic has been in serial decline," Cohen told CNN Money. "Where they are in triple-A malls, they're faced with very high rent."
Brookstone is one of the few stores that actually boasted attentive salespeople.
"Brookstone had a unique value proposition," Sean Maharaj, a director in the retail practice of consultancy firm AArete told CNN Money. "They had a sophisticated offering. It was more boutique-like and felt a little white glove."
Contact Uttara Choudhury at uttara@proactiveinvestors.com
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