Crew is struggling under the ownership of TPG and Leonard Green and Neiman Marcus reamain in flux with a heavy debt load following two private equity buyouts in a row. Simon didn’t name names, but the Limited was owned by Sun Capital Partners and was liquidated, J. “We certainly have some retailers that have not performed the way they wanted to or should have,” Simon said.Īnd in some cases, that has been driven by private equity buyouts that loaded up companies with debt. Plenty of other retailers are in the same boat. The ceo said the chain would most likely continue to post operating losses through the fourth quarter. But times have changed and Simon itself has become a retailer, taking a stake in the bankrupt Aéropostale, which has continued to lose money and has been a small drag on its finances. “But instead of looking at as a concern, given that they pay no rent, we actually think that’s a great opportunity for our redeveloping the mall to the next level,” he said.Īs the mall business was expanding, landlords typically gave sweetheart deals to department store anchors in order to draw a critical mass of other retailers and attract shoppers. He said the space could be given over to mixed uses, or Life Time gyms or “some community-orientated activity.” (In response to an analyst question, he lauded discounters such as Marshalls and said there was an opportunity to bring them into select malls). “Our outlet business and Mills, business continues to prosper…The great opportunity I think in business will continue to be reclaiming the department stores.” “Our European and Asian business is actually very strong,” Simon said. malls and premium outlets was flat at 95.6 percent while the minimum base rent per square foot increased 4.4 percent to $51.87. As of March 31, occupancy at the company’s U.S. For the first quarter, Simon’s funds from operations rose to $985 million from $951.8 million a year earlier, as net income slipped to $477.7 million from $481 million. and more.īut the upper tier, the so-called A malls that Simon focuses on, are expected to fare better than those lower down the price spectrum. Inc., Abercrombie & Fitch Co., Guess Inc. store doors are slated to go dark this year, with closings from Macy’s Inc., Sears Holdings Corp., Wet Seal, J.C. Many stores have reported a sharp decrease in traffic with a generally weak retail market, laser-targeted consumers who want to get in and get out when they shop, the rise of e-commerce and the Millennial preference for experiences over stuff. He said the narrative was “way ahead of itself, the traffic is strong, it was up throughout our portfolio where we measured it.” David Simon on Luxury, Mixing Up His Mall Portfolio
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