NAPLES — First it was the Disney Store, then Ted's Montana Grill, then the Gap that left Coastland Center mall in Naples.
The longstanding McDonald's took down its iconic arch and left the food court, and now Pate's House of Prime Rib – which opened six months ago in the space left behind by Ted's – has become the latest business to close its doors at Coastland.
But the store closings the Naples center has seen in recent years aren't unusual for indoor malls across the country, which researchers say are losing retailers and drawing fewer customers. In the last quarter of 2011, the nearly 1,500 enclosed malls in the U.S. had the highest vacancy rate in 10 years, according to research firm Reis.
"There's no demand like there used to be at all," said Britt Beemer, founder of America's Research Group, which monitors industry trends. "That's the problem."
Major retailers are eliminating their unprofitable stores, Beemer said, and enclosed malls are struggling to find replacements for them.
However, that's not the case at Coastland, which just nabbed H&M, the world's No. 2 largest clothing retailer, to fill 20,000 square feet of vacancies. The mall's owners hope the store's presence will give Coastland a boost to maintain its place against newer open-mall competition — Gulf Coast Town Center in San Carlos Park, Coconut Point in Estero and the Mercato in North Naples.
"It's high fashion at a low price point, so I think that it'll bring shoppers," Melissa Wolf, marketing manager at Coastland, said of H&M. "I think everybody's excited about it, I really do."
Wolf said the mall has been able to quickly fill its vacancies and is doing well. Many of the vacant spots at Coastland have barricades that announce the name of a new store moving in.
The Naples mall stands out from Southwest Florida's other shopping destinations, Wolf said, because it offers more affordable merchandise.
The business owners who closed their Coastland locations said they simply weren't turning enough of a profit, and could no longer pay the rising costs of being in the mall.
After watching sales fall significantly, Larry Pendleton "had no choice" but to close his store, Cutlery World, in January.
"Everything happened at once," Pendleton said.
Online sales took off, the economy tanked and the area's other shopping centers opened – all within the same time frame beginning in 2006, said Pendleton, who owned the store for more than 20 years.
The changes were significant, he said. Coastland had long been the area's only shopping destination.
"Look, when we came here 20 years ago, the mall was the only game in town," he said. "If you wanted to go shopping, you had to go to Coastland – that was it. There was no competition."
Pendleton said the new competition, combined with the down economy and popularity of online shopping, took a toll on Coastland and on his store. He and his wife, Rosalie, took their business on the road and now host sharpening events and have a drop-off service.
"The reality was, revenue has dropped since 2006, costs have gone up since 2006," Pendleton said. "One and one doesn't add up to two anymore. It wasn't economically viable to stay in that mall."
Other business owners gave similar explanations for their decision to leave the mall.
"If your traffic stays about the same and your expenses keep going up, what happens to your profit? It keeps going down," said Mike Adams, McDonald's area owner/operator.
Coastland fought back against the newer shopping centers with renovations that increased its size and updated its look.
Even though the newer, outdoor shopping centers in Southwest Florida have vacancies, too, some say indoor malls appear to be a concept that's simply past its time.
"No matter how you try to fix it up, it's like taking an '85 Chevy and giving it a new paint job," said John Lautemann, who said he owns several shopping centers and was shopping at Coconut Point on a recent weeknight. "When you get in the car, it's still an '85 Chevy."
Beemer said there are too many indoor malls in the U.S., and as retailers continue eliminating unprofitable stores, malls will continue to disappear or be repurposed.
About a third of the malls' former customers have stopped shopping at malls, with many favoring lower-cost options, Beemer said.
In 2010, Wal-Mart Stores Inc. was the highest grossing retailer, earning $405 billion in sales, according to the International Council of Shopping Centers.
"If one out of four would close," Beemer said of indoor malls, "nobody would miss them."
Few expect that to be Coastland's fate. Wolf said the fact H&M is opening a store there shows the mall is having success. And, she said, Coastland has added employees and is starting to host more events.
Stanly Pate, who owns Pate's House of Prime Rib, said he's hopeful the restaurant will be able to reopen at Coastland. A sign on the door says the restaurant is closed – but perhaps not permanently.
Barbara DiLorenzo, a Naples resident who frequents Coastland, said she's confident it will last for years to come.
"It's the only mall near here," she said. "There's no other big mall in Naples."
And that – the mall's prime location – will keep it going, Lautemann said. It also gives Coastland's owners an opportunity."The land there is unbelievably great," Lautemann said. "Why not do something great with it?"