Things might get worse before they get better for the so-called “C” and “D” malls.

The shuttering of up to 120 Sears Holding Corp. doors — as well as weakness at The Bon-Ton Stores Inc. and J.C. Penney Co. Inc., which could also close stores — might upset the delicate economics of some of the industry’s weakest malls, according to a report by Credit Suisse analysts.

“Given the size of these three anchors, which account for roughly 30 percent of sales in the department store industry, a large store closing announcement could be the tipping point for a major round of store rationalization,” Credit Suisse said.

“Once an anchor in a mall closes down, co-tenancy agreements often allow in-line tenants to back out of lease contracts. In the past, landlords were able to fill empty space with big-box retailers such as Kohl’s, Home Depot and specialty retailers that were growing square footage annually by over 10 percent. Today, we do not think there is nearly the same level of demand for retail space to absorb a fallout of this magnitude.”

It would be the weaker malls that would be hit the hardest, since the outlet channel has been strong and the stronger malls have seen their rents increase.

The vacancy rate in “A” and “B” malls stands at about 6.6 percent, while the “C” and “D” malls have a vacancy rate of 7.9 percent, said Credit Suisse, which took real estate investment trusts as a proxy for the industry.

The analysts said the shifts in the landscape would help vendors that are moving toward an owned-retail strategy, such as Nike Inc. and VF Corp., and smaller companies still growing and catering to mid- and low-end consumers, such as Zumiez Inc.

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