Malls Pull Out All the Stops; Shoppers Yawn

This post first appeared on Minyanville.

It's a tough time to own a mall.

The credit spigot has been turned off: Americans are cutting credit cards, shunning debt and generally spending less. Retail vacancies are at highs not seen in decades. Mall owners are beginning to get desperate.

So desperate, in fact, that some are shelling out $2 million to install Flowriders.

Flo-whats?

The Flowrider -- the retail extension of a nascent craze currently sweeping cruise ships and water parks -- is a wave-making machine that lets city dwellers feel the rush of shooting the curl. The device is the creation of Adenalina, an extreme sports store hawking gear for the brave-at-heart.

The New York Times reports that a half-dozen malls around the country are paying to install Flowriders to pull in foot traffic and keep shoppers entertained enough to, hopefully, spend.

Mall owners aren't just contending with weak demand; supply is piling up as stores contract their operations. Big-box retailers and department stores like Sears (SHLD), Macy's (M) and Dillard's (DDS) are closing stores in response to the ongoing economic slump. Others, like Linens 'N Things, are just going under.

According to the Times, from 1990-2005, retail space per capita more than doubled, while consumer spending grew just 14%, adjusted for inflation.

Take a drive around suburban America, and it's easy to see the challenges facing malls and retailers alike. Strip malls sit empty next to the waving flags of the latest Toll Brothers (TOL) development; Starbucks (SBUX) does brisk business in a shopping center that's half vacant.

Even big cities are struggling to fill commercial space. At the bottom of my building in downtown San Francisco, 3 of the 10 storefronts are empty. Our building, a historic landmark recently purchased by private equity firm Thor Equities, has stepped up an ad campaign to try and attract tenants.

Who knows - maybe instead of braving the frigid, shark-infested waters of the north Pacific to catch some waves, I'll be able to wander down to the swanky Westfield Mall and paddle into a few lefts before I hit up the food court.