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Photo by Dave Flessner / The Sears store at Northgate Mall closed in February, marking the end of what was once America's biggest retailer in the Chattanooga market.

The last vestige of what was once the region's biggest retailer closed in 2019, capping a decade of decline for many of the best known retailers in Chattanooga.

But the retail realignment also brought new players to the market and new uses for old store sites.

Sears, once America's biggest retailer, shut down its last remaining department store in the Chattanooga market in early 2019. Sears Holding Co., which once operated more than a dozen Sears and Kmart stores in the Chattanooga region, closed the Sears store at Northgate Mall in February, nearly a half century after Sears opened as one the original anchors of the Hixson mall when it opened in 1972.

Sears was among several major national chains that exited the Chattanooga market in 2019, including Gap, Forever 21, Payless ShoeSource, DressBarn, hhgregg, and Lifeway Christian bookstore.

The closings in 2019 following the shutdown during the past decade of area Kmart, RiteAid, Toys R Us, Sports Authority, Gander Mountain and other national chains.

Bassam Issa, a commercial developer in Chattanooga for nearly four decades, said many shoppers are buying more goods on the internet or shopping at discount stores, boutique shops or other retail outlets in smaller strip centers rather than major shopping centers or malls.

"The retail market has changed dramatically so we are moving now toward more developments built around restaurants, medical services or entertainment and services, rather than just conventional retail stores," Issa said. "It was a lot easier in the past when most retailers were trying to expand with more store locations and wanted to be in as many commercial corridors as possible. Now even the successful retailers are very picky and much more cautious."

Retail chain closings in 2019

Nearly a dozen major national retailers shuttered stores in the Chattanooga market in 2019. Retail outlets that closed in Chattanooga this year included:

Sears closed its Northgate Mall store in February

Payless ShoeSource shut down in March, closing three stores in Chattanooga and one in Dalton, Georgia, after filing for bankruptcy

Gap announced in December its will close its Hamilton Place store in early 2020

Forever 21 filed for bankruptcy in September and closed in Hamilton Place store

Ethan Allen Interiors closed its furniture store in Hamilton Corners in January

Lifeway Christian Store closed its book store near Hamilton Place Mall in May

Fred’s Inc. files for bankruptcy in September, closes retail stores in Pikeville, Monteagle

Sleep Outfitters closed its mattress store on Shallowford Road

Dressbarn closed all of its stores, including one near Hamilton Place, this summer

For the Chattanooga-based CBL Properties — one of the nation's biggest shopping center developers — the decline in traditional brick-and-mortar retail chains has forced a reshaping of the company's malls and retail centers.

"We are transforming our properties from apparel-based, enclosed malls to market-dominant, suburban town centers featuring a diversity of users," CBL CEO Stephen Lebovitz said. "Our redevelopments and leasing efforts are delivering a variety of uses customized to the local market that range from entertainment to hotels to casinos to fitness."

CBL acquired the local Sears store at Hamilton Place before it closed in late 2018 and bought the auto service center Sears once had outside of Northgate Mall. CBL is using those spaces for restaurants and offices and Lebovitz now refers to CBL malls as "town centers" that offer not just retailing but entertainment, food, medical services and fitness facilities, among other types of projects.

Nationwide, Business Insider estimates that more than 9,300 stores closed in 2019.

Michael Brown, a partner in the retail practice of consulting firm A.T. Kearney who has studied the future of shopping centers, told USA Today the closings of brick-and-mortar stores reflects the shift to e-commerce, which is capturing a growing share of retail spending.

"As we exit this decade, we're really seeing the tidal wave of shift from physical to digital in many respects whether it's physical to digital shopping or physical to digital products that are impacting what and how people are buying it," Brown said.

UBS Securities projects 75,000 more stores will need to be shuttered by 2026 if e-commerce "penetration rises from 16% currently to 25%."

some text Photo by Dave Flessner / The Sears store at Northgate Mall closed in February, marking the end of what was once America's biggest retailer in the Chattanooga market.

Despite the store closings in Chattanooga in 2019, the market did get some new retail players.

Roses Express, a discount retailer, opened in Fort Oglethorpe in June. Athleta, a women's performance apparel retailer, opened on Hamilton Corner Lifestyle Center in October

E.C. Barton, a home improvement retailer, is opening in Hixson in the former K mart space in early 2020, and Electronic Express, a retailer of TVs, computers and appliances, is opening store in the former Toys R Us near Hamilton Place.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340

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