David Simon, the Chief Executive Officer of Simon Property Group, the biggest mall owner in the United States of America, says that the wave of bankruptcies that have been rocking the world of retail this year is finally expected to be dying down.
He said: “We are having a high bankruptcy year. … There’s no denying that. But I think we’re kind of reaching the bottom in … 2019 on that stuff. It’s rivaling what happened in 2017. So, it’s not like something that we haven’t experienced before. But we know [what] we have to do. As we put together our plans for next year, I think we’ll be OK. We’re hustling. We’re finding new tenants.”
So far this year, 8993 stores have closed and 3780 have opened, compared with 5844 stores opening and 3258 stores closing in 2018. Among these have been Forever 21 and Barneys New York, which filed for bankruptcy this year.
A record 12000 stores could go out of business by the end of this year alone, experts claim.
“We’re going to be a better real estate operator the more we know e-commerce. We are going to make money … and we’re going to know our retailers better. Right now we’re playing with the house’s money and it’s not material. Any leading company out there invests in the future … from Microsoft to Amazon. If I had a criticism of historical retailers … because of strained balance sheets or overspending in one thing versus another thing, is the inability to reinvest in your business is a major no-no,” Simon added.
Simon Property Group recently invested in such business as Rue Gilt Groupe (the parent company of online shopping site Rue La La), Life Time (a gym operator), Pinstripes (dining and entertainment), Allied Sports (e-gaming), Sports Illustrated (a well-known sports magazine), and Soho House (a trendy membership club), among others.