2 Mall Owners with 130 Locations Across The US Are Filing for Bankruptcy Ahead of The Holiday Shopping Season
Nov 03, 2020
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Two US mall chains that own a total 130 malls filed for bankruptcy.
The locations will remain open for now during financial restructuring.
The coronavirus pandemic has been catastrophic for retailers, and malls might not bounce back.
The owners of a combined 130 malls just filed for bankruptcy, CNN reported.
CBL & Associates, based in Tennessee, and PREIT, based in Pennsylvania, both filed for Chapter 11 bankruptcy on Sunday as the retail world continues to suffer the results of the pandemic and lockdowns. Both mall chains will remain open during financial restructuring.
Malls were already in trouble before the coronavirus pandemic struck, and now they may not bounce back. Department stores like Macy's, Neiman Marcus, and JC Penney — historically anchor stores that occupy large areas of malls and draw customers in — have struggled to draw in customers in the face of COVID-19 and increased online shopping. Without these tenants, malls can be stuck with huge empty space that is nearly impossible to fill.
Both mall chains had mentioned in the past that they were in danger of closing as retailers including JC Penney and Ascena Retail Group filed for bankruptcy this year, CNN reported. Research firm Green Street Advisors told Business Insider in May that it expects half of mall department stores to close by 2021, leaving "excessive dark mall anchor space." In August, CBL noted unpaid rent and low foot traffic, along with increasing debt, as factors that could lead to bankruptcy, CNN reported.
"Widespread department store closures will accelerate the demise of many malls," Green Street Advisors said in a spring report. "Many malls will be faced with multiple anchor vacancies, a tough place to come back from."
More retailers filed for bankruptcy in the first nine months of 2020 than in all of 2019. CBL and PREIT joined the 35 other retailers and restaurant companies that have filed for bankruptcy and liquidation so far in 2020, likely with more to come.