The list of retailers closing brick-and-mortar stores just seems to keep growing, a fact not lost on developer Rob Hargett as he and business partners plan to redevelop Regency Square mall in Henrico County.

“Some of the tenants we wanted six months ago have gone out of business. So we are having to reinvent ourselves,” Hargett said, speaking Tuesday at a program for real estate professionals about the challenges facing brick-and-mortar retailers.

So far this year, more than a dozen national retailers have announced they are closing stores or going out of business entirely — more than twice as many stores have closed this year than at the same point last year.

The list includes clothing retailers American Apparel, Bebe, Rue21, The Limited and BCBG. Also on the list are sporting goods chain Gander Mountain, shoe retailer Payless Shoe Source, electronics store RadioShack, and furniture and appliance retailer Hhgregg.

Macy’s, J.C. Penney, Sears and Kmart are shutting down some stores as well.

Is it the Amazon effect? Is it millennials giving up on the try-it-before-you-buy-it shopping tradition?

“You definitely have an Amazon effect, whether you want to attribute it directly to Amazon or internet selling overall,” said Tom Arnold, a professor of finance at the University of Richmond’s Robins School of Business.

“It’s growing, and that means that there are just less consumers that are willing to go to brick-and-mortar stores. What is happening to those stores is … that they have an awful lot of overcapacity. That’s why you are seeing them shrink,” Arnold said.

That’s not happening to every retailer, though, Arnold said.

“Walmart has become a significant competitor to Amazon,” he said. “You can now buy online at Walmart.com items other than what’s available in a Walmart.”

National Retail Federation figures show a mixed picture — retail sales overall increased 3 percent in April compared with a year ago in April. The number doesn’t include automobiles, gas stations or restaurants.

Online and other nonstore sales were up 9.4 percent in April compared with April 2016.

Certain sectors did better than others. Appliance and electronics store sales were down 0.1 percent year-over-year in April. Clothing and accessories store sales were up 1.7 percent year-over-year. Sales at furniture and home furnishing stores were up 0.9 percent year-over-year, while sales at building materials and supplies stores were up 5.7 percent.

“What I’ve noticed is that there has been shakeout concentrated in certain categories and channels such as apparel, sporting goods, and consumer electronics,” said Frank Badillo, director of research for MacroSavvy, a Henrico County-based marketing and research firm.

“Much of the retail shakeout is a widening Amazon effect across categories, but I also believe that the shakeout reflects a generational effect that has been growing in the past year,” Badillo said.

Millennials are key consumers in many of the discretionary categories that are most affected by the ongoing shakeout, Badillo said. And they aren’t spending as much as previous generations did.

“So retailers are being squeezed by demand that has softened among a key shopper segment in addition to shifting to Amazon and elsewhere online,” Badillo said.

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The impact of the retail shakeup is apparent at local malls, including Virginia Center Commons and Regency Square in Henrico.

An entire corridor inside Virginia Center Commons has vacant storefronts. The situation is better at Regency Square, where the vacant spaces are more spread out.

Both malls lost major anchors in March 2016 when Macy’s stores closed as part of a national downsizing by the department store chain. Regency Square lost two Macy’s stores; Virginia Center Commons lost one.

Virginia Center Commons also lost two Dillard’s department stores, in 2010 and 2011, with those mall spaces now filled by retailer Burlington and an American Family Fitness gym.

“You used to struggle to find a parking space” at Regency Square, said Danny Meyer, president of the Greater Richmond Association for Commercial Real Estate, speaking at Tuesday’s meeting where Hargett spoke.

“Now it’s a little bit different,” Meyer said.

Both malls have been bought by developers who are trying to turn them around — despite the gloomy retail picture.

“Every day I am getting some ‘great’ news about what’s going on in the industry, how we are never going to survive, every retailer’s going out of business. And yet we fight on,” said Hargett, a principal with Chesterfield County-based The Rebkee Co., which bought Regency Square with Thalhimer Realty Partners in February 2015.

The developers have big plans for the mall, including improving visibility and access by reworking the roadways around the mall, removing a parking deck and adding tenants, such as a Regal Cinemas and a trampoline business. Those tenants are not as much about selling a product as they are about selling a good time.

“Experiental retail — that’s kind of the buzz word going on around the mall space now,” Hargett said.

It can be done, he said, pointing to Willow Lawn as an example. The shopping center near Staples Mill Road in Henrico was on the decline a decade ago.

“It’s the most amazing resurgence of retail in the history of Richmond, Virginia. It started with a Panera Bread on the corner. Experiences and restaurants — that’s really the first phase,” he said.

Willow Lawn’s tenants include retailers not having as hard a time as others — off-price clothing and home goods store Ross Dress for Less and A.C. Moore Arts & Crafts.

Ross, which operates 1,561 stores under the Ross Dress For Less and Dd’s Discounts banners, plans to add 90 locations this year. A.C. Moore is moving into a larger space in Willow Lawn, which was converted to an open-air mall in a major redesign several years ago.

Dick’s Sporting Goods will become an anchor tenant at Willow Lawn in the summer of 2018 by putting a 47,000-square-foot store in a newly constructed space along the Kroger wing of the shopping center where the A.C. Moore store and other tenants currently are located.

Also coming to Regency Square on outparcel sites along Quioccasin Road: Starbucks, Chipotle Mexican Grill, Sprint and MOD Pizza, a Seattle-based fast-casual pizza company.

“Those are our outparcel users that will start that whole sense of place, people coming to eat,” Hargett said.

Arnold, at the University of Richmond, thinks Regency Square’s owners are on the right track.

“Their mix of stores, from what I’ve heard, sounds pretty interesting. They are bringing in restaurants and specialty stores. They are just making it a place that is very easy (to access). If I have a half hour and I am in that area, I can stop and walk through,” Arnold said.

“I think it is too early to say if brick-and-mortar retail is completely dead, but there is little doubt that it is in flux. Regency Square mall sounds like it has a good retail mix for the immediate future, but it may have to change quite a few times going forward to accommodate this volatile phase in retailing.”

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The impact of the announced store closings on the local commercial real estate availability has yet to be seen.

According to a market report by commercial real estate brokerage Cushman & Wakefield | Thalhimer, the Richmond region had approximately 81.2 million square feet of commercial retail space with a 5.8 percent vacancy rate during the first quarter of 2017.

Brian Glass, senior vice president at brokerage Colliers International, said Richmond has more retail space per capita than comparable cities such as Charlotte, N.C., and Nashville, Tenn.

“And we continue to grow it. Some people will say part of the reason for that is the James River creates a natural barrier and what you put on one side of the river you put on the other side of the river,” Glass said.

Another issue facing the Richmond region, Glass said, is the amount of vacant space that will be available when nine Martin’s Food Markets stores close this summer.

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Hargett said long-term the redevelopment for Regency Square is a mixed-use project, with retail, residential and office space.

Plans call for a possible apartment complex on the mall’s southern border near Starling Drive.

“I believe there is going to be an office component. We’re trading a letter-of-intent, countering back and forth on 100,000 square feet. I think that could be a good use. I don’t think it’s an office complex, but we all know malls are changing. This is a puzzle. We are figuring this out every day.”

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