December 2, 2019 / 8:27 PM / 8 months ago

Breakingviews - American Dream aims to bypass U.S. mall nightmare

Shoppers carry purchases from Louis Vuitton as pre-Thanksgiving and Christmas holiday shopping accelerates at the King of Prussia Mall in King of Prussia, Pennsylvania, U.S. November 22, 2019. REUTERS/Mark Makela

NEW YORK (Reuters Breakingviews) - New Jersey is doubling down on the mall. The Garden State is home to one of the largest shopping complexes to open in recent memory. American Dream, as it’s called, offers a dizzying array of theme parks better suited to Dubai. The hope is this will help push people through the door. With retail sales swiftly moving online, that may not be enough. 

The mega-mall was a long time in the making. Originally conceived as “Xanadu” 15 years ago, it has endured bankruptcy, multiple backers including U.S. Treasury Secretary Steven Mnuchin and Colony Capital’s Tom Barrack, and a price tag of about $5 billion. Triple Five, the developer of West Edmonton Mall in Canada and Mall of America, bought it in 2011 and is betting over-the-top experiences will decrease its exposure to retail. 

To do that, Triple Five set aside 55% of the American Dream’s 3 million square feet to theme parks including a SpongeBob roller coaster, a ski slope, an ice rink and water slides. Other amenities range from nannies for parents who want to shop in peace to helipads for passengers who can afford to avoid the often-clogged Route 3 highway. The goal is to attract a projected 40 million people annually to the Meadowlands complex.

The retail stores like Tiffany and Saks Fifth Avenue occupying the other 45% of the space aren’t expected to open until March, however, which means they’ll miss the all-important holiday season. That’s poor timing for an industry on a roller coaster ride. Tiffany is being gobbled up by LVMH for $16.2 billion. Hudson’s Bay, the owner of Saks, is under attack by activists. Barneys New York, which had been touted as an anchor tenant, went belly up in November and was sold for peanuts.

Meanwhile, more people are shopping online. Morgan Stanley reckons retail-store traffic for the first three weeks of November fell nearly 30% compared to last year. That’s skewed due to Thanksgiving and Black Friday falling in the third full week of November in 2018 rather than the fourth this year. The last time that shift happened, between 2012 and 2013, the decline was just 15%.

E-commerce sales are likely to outpace the growth rate of brick-and-mortar sales during the holiday, estimates software-and-analytics firm Adobe. The trend suggests malls are more of a nightmare than a dream.


Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below