In a New Jersey suburb seven miles west of Midtown Manhattan, the American Dream is on shaky ground.
The Dream in question isn’t the mythological notion that upward social mobility is within reach for all hard-working Americans. It’s a $5 billion, 3 million-square-foot shopping and entertainment complex in East Rutherford featuring an indoor ski slope, an ice-skating rink, and a Nickelodeon-branded amusement park. The complex finally opened last fall, but it’s now facing huge new challenges.
The development’s complicated 17-year history, marked by ownership changes, false starts, and broken promises, had already put American Dream in a precarious situation. The Covid-19 pandemic hitting in March made things much worse. And whether the mall makes it in the long term will hinge in part on how it deals with the collapse of three of the marquee department stores that were to anchor the entire complex and draw foot traffic — Barneys New York, Lord & Taylor, and Century 21 — which all have gone bankrupt and closed, or are planning to close, all their stores in the US.
Around 100 storefronts in American Dream opened their doors to customers in October and November, but the complex’s future is not guaranteed. Its owners, Triple Five Group, missed several mortgage payments this summer, and it’s not clear who might fill the enormous holes left by the three fallen department store chains, or which other retail tenants will opt out of their leases now that the development is missing three of its anchors.
While the story of American Dream is unique in many ways, its struggles are emblematic of the bleak future facing many US malls and department stores — whose destinies have long been intertwined. The downfall of these once-crown jewels of retail will have meaningful impacts on the Americans who work for them and the communities they’ve long called home.
Across the US, department stores are shrinking or shuttering altogether. In 2011, US department stores employed 1.2 million employees across 8,600 stores, according to estimates from the research firm IBISWorld. But in 2020, there are now fewer than 700,000 employees in the sector, working across just over 6,000 locations.
The reasons for the struggles are both shared and unique. Since the Great Recession began in late 2007, the vast majority of income growth in the US has gone to high-income households, squeezing middle-class households and altering where they spend money. As a result, chains that sell brands at sharp discounts like TJ Maxx, Ross, and Dollar General have become more popular, siphoning away shoppers from full-price department stores like Macy’s and J.C. Penney that were designed to cater to a stronger middle class of yesteryear.
All department stores are also facing the reality that…