Simon CEO troubled by bricks-and-mortar closures
The CEO of the largest mall in the U.S. says he is concerned about the potential growing number of retail bankruptcies this year.
According to CNBC, David Simon, Simon Property Group CEO and the largest mall owner in the U.S., has been struggling with how to deal with the onslaught of store closures from tenants big and small, ranging from Sears to Starbucks’ Teavana.
“There are some retailers out there that we’re nervous about,” Simon said Friday during a call with analysts after the company reported earnings, though he didn’t name those companies. “We are concerned about a few [retail bankruptcies] that should shake out in the first quarter.”
Most of the retailers struggling today and expected to shut more stores are highly levered, according to Simon during the call. “We have a long list of retailers that have struggled. ... And 80 to 90 percent of that list have been over-levered so they couldn’t turn left or right.”
However, Simon’s chief operating officer, Rick Sokolov, added that the mall owner was having success in bringing online brands like Untuckit, Warby Parker and Fabletics to its properties. A lot of e-commerce companies today are raising money “just to roll out more stores,” Sokolov said. “The single best thing we have going for us are [our] incredibly strong properties.”
To read the CNBC article, click here.