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In October, Sears Canada said it is closing. This store is in Toronto. (Photo: Rene Johnston / Toronto Star via Getty Images)

The painful truth about the retail bloodletting is that it's been a long time coming. Since about 2003, when they went on a construction tear, American builders have lived by the Field of Dreams rule: build it and customers will come. Now, there are way too many stores, and way too much space devoted to them: Credit Suisse says a quarter of American malls — up to 275 of them — will shut over the next five years; CoStar, the real estate research firm, tells Axios that the excess is more like 150.

Quick take: "What we are seeing going on is Darwinism at play," says CoStar's Ryan McCullough. "We believe that all these closures will have a healthy impact on the industry, but there will be a disruptive process till we get there."

By the numbers: There are about 1,190 malls in the U.S. American retail as a whole is overbuilt—Americans have far more indoor shopping space than anyone else on the planet. As of a year ago, that was 23.5 square feet per person. Two next two on the list — Canada and Australia — have 16.4 and 11.1, respectively.

The bottom line: Analysts view this as an issue of productivity — sales divided by space, more or less. By that measure, American retail productivity as a whole is 7.5% below the long-term average, McCullough says; for malls, the shortfall is 13%. To get back to the average, 150 million square feet of mall space — adding up to 150 malls — "need to go away," he says. Overall, retail needs to close down 1.5 billion share feet of space.

McCullough doesn't think the result will be so many malls closing, but a lot of individual stores shutting their doors across the whole population of malls.

Go deeper

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Illustration: Eniola Odetunde/Axios

Dave Lawler, author of World
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Biden holds first phone call with Putin, raises Navalny arrest

Putin takes a call in 2017. Photo: Handout/Anadolu Agency/Getty

President Biden on Tuesday held his first call since taking office with Vladimir Putin, pressing the Russian president on the arrest of opposition leader Alexey Navalny and the Russia-linked hack on U.S. government agencies, AP reports.

The state of play: Biden also planned to raise arms control, bounties allegedly placed on U.S. troops in Afghanistan and the war in Ukraine, according to White House press secretary Jen Psaki, who said the call took place while she was delivering a press briefing. Psaki added that a full readout will be provided later Tuesday.

Biden signs racial equity executive orders

Joe Biden prays at Grace Lutheran Church in Kenosha, Wisconsin, on September 3, 2020, in the aftermath of the police shooting of Jacob Blake. PHOTO: Jim Watson/AFP via Getty Images

President Joe Biden on Tuesday signed executive orders on housing and ending the Justice Department's use of private prisons as part of what the White House is calling his “racial equity agenda.”

The big picture: Biden needs the support of Congress to push through police reform or new voting rights legislation. The executive orders serve as his down payment to immediately address systemic racism while he focuses on the pandemic.

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