Medical clinics, schools and apartments: For a decade, shopping mall owners have been desperately seeking new options for space vacated by shuttered department stores and bankrupt retailers.
One former J.C. Penney store at Westfield Garden State Plaza, a mall in Paramus, N.J., heralds yet another direction: themed attractions — or the catchier term, “retailtainment” — based on popular toy brands like Play-Doh and Nerf.
Construction workers have already divided up the second and third floors of the store into what will be the Nerf Action Xperience — Nerf AX for short — an attraction dedicated to the spongy, lightweight plaything made by Hasbro that includes mini footballs and blasters that shoot foam darts.
Brigid Witzke, head of new openings and projects at Brite Management, the site’s operator, wove around scissor lifts and dumpsters as she led a tour on a recent morning, pointing to where visitors will be able to shoot foam basketballs at moving hoops and race through a parkour-inspired obstacle course.
In a maze of rooms on the upper level, “you’re going to feel like you’re in a postapocalyptic train station,” Ms. Witzke said.
When it opens later this year, Nerf AX will join an explosion of entertainment concepts taking over an even larger share of retail spaces in an effort that started decades ago. But now, no longer just a movie theater or an arcade, these new, sprawling attractions cater to a variety of niche interests from Formula 1 racing to immersive installations for fans of Netflix shows and movies.
In the latest effort, mall owners are spending millions to entice shoppers to keep coming back. An additional 11 percent of entertainment space, or more than nine million square feet, has been planned for opening in North America by 2025, according to a 2023 report from the real estate firm JLL.
It’s all part of a broad trend that real estate experts call “experiential retail” or “retailtainment.” It’s evolved from what used to be called the “experience economy,” a term introduced in a 1998 article in The Harvard Business Review that predicted that malls would someday become more like theme parks.
That prediction was ahead of its time. With a few notable exceptions, most malls were largely unchanged until the last decade, when the shift to online shopping and later the Covid pandemic kept shoppers home. Now, mall owners are hoping the fun and games will draw people back to their properties.
Some of the new enterprises offer mall operators the opportunity to fill the yawning empty spaces left behind by department stores, a sector that continues to contract.
“We are the new anchor tenants,” said Corey Redmond, senior executive vice president of Kingsmen Xperience, the Los Angeles attraction company that created the Nerf AX site in Paramus.
Most of the activity is taking place at upscale malls — roughly a quarter of about 1,000 malls in the country, said Vince Tibone, head of U.S. retail and industrial research for the real estate analytics firm Green Street — while other malls continue to struggle. The entertainment concepts can be expensive and cost millions to build, and landlords often split the bill with operators.
A challenge, after all that spending, will be keeping people coming back to a unique entertainment venue.
“Some brands work really well one day, then they get cold,” said Matt Proulx, Hasbro’s senior vice president who leads the company’s “location-based entertainment” business — what toy companies call their real estate ventures. The company, which is based in Pawtucket, R.I., opened a Nerf AX in a mall in Manchester, England, last year, and has “Peppa Pig” theme parks in the United States and Germany and a restaurant in Hong Kong inspired by “Transformers.”
Still, Mr. Proulx said he believed attractions could stave off brand fatigue by “always innovating” and updating regularly to draw repeat customers. And they provide a new way to offer something decidedly old school: the sale of goods. At Nerf AX in Paramus, 2,400 square feet will be devoted to selling the brand’s toys and games, on the theory that a visitor might want a blaster to take home. “These retail areas are opportunities to move more product,” Mr. Proulx said.
The pandemic helped to accelerate malls moving in this direction. During the global health crisis, retailers like Bed Bath & Beyond and Brooks Brothers filed for bankruptcy, and owners and managers of retail real estate found themselves with record vacancies — but also with greater openness to filling those empty spaces with nontraditional business models, like pop-ups, immersive art installations and experiential offerings including pickleball courts and escape rooms.
For toy companies, the concepts offer new and potentially solid revenue streams: They license their intellectual property to attraction firms that take a doll or game and extrapolate a full-scale environment.
Merlin Entertainments, a theme park operator based in Britain, recently spent $5 million renovating its Lego Discovery Center in a mall in Atlanta. Now visitors can build their own rockets with the interlocking plastic bricks, scan their contraptions so they appear on an overhead screen, then launch them with a joystick. “The look and feel is updated,” said Scott O’Neil, chief executive of Merlin.
And it’s not just toy companies: Netflix took over a former Lord & Taylor at the King of Prussia mall outside Philadelphia to create immersive installations based on popular shows and movies, and attractions have been devoted to beloved series like “Friends” and “The Office,” as well as newer fare including “Only Murders in the Building” and “Squid Game.”
“These things didn’t exist prior to a handful of years ago,” said Andy Lederman, chief executive of Bucket Listers, creator of immersive experiences based on “Golden Girls” and Barbie, a Mattel brand.
Triple Five Group, a Canadian developer, pioneered retailtainment in 1992 when it opened the Mall of America in Bloomington, Minn., with an amusement park taking up 20 percent of the property’s square footage, said Paul Ghermezian, chief operations officer at Triple Five. The company’s American Dream mall in East Rutherford, N.J., has 50 percent of its square footage devoted to entertainment.
At Area15, a mall outside Las Vegas, the entire property is dedicated to entertainment concepts. At other malls, the offerings are more lightly sprinkled in with traditional retailers. Attraction firms identify areas where the demographic profile suits the entertainment concepts.
Even adults can get in on the fun: At Paramus’s Garden State Plaza — where a plan to add housing was recently approved — Pinstripes opened in a former Uniqlo space in February, offering Italian food on the main level and bowling and bocce ball below.
As for the former J.C. Penney space, the ground floor is now a Planet Playskool, another partnership between Hasbro, Kingsmen and Brite, that opened in June and is filled with activities based on brands like Play-Doh and Spirograph.
There, Jayden, age 3 ½, was building a helicopter from Tinkertoy parts. “Anything to keep him occupied,” said Song Hahn, his mother, who added that the mall location meant they could also run errands and get lunch during their outing.
