Coronavirus pushes biggest U.S. mall developer to close all properties
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America’s largest mall operator finally caved in to the reality that the coronavirus outbreak makes it nearly impossible for their properties to open when the public’s health and safety requires social distancing.
Simon Property Group, owner of major malls such as Roosevelt Field in East Garden City, N.Y. and Stanford Mall in Palo Alto, Calif., said on Wednesday it was closing all of its U.S. properties, including 106 malls and 69 outlets center, through March 29. The malls will go dark as of 7 p.m. Wednesday in the mall’s local time zone. The owner of Westfield malls later said its U.S. properties would be shut too during that period.
The news is hardly surprising given how many of Simon’s retail tenants have announced store closings as the severity of the outbreak has become clearer. The most recent was struggling department store chain J.C. Penney which had initially shortened store hours, but on Wednesday decided to close all stores would close for two weeks.
Penney’s decision followed similar announcements from Macy’s, Nordstrom, Neiman Marcus, Gap Inc., Abercrombie & Fitch, Apple, and Urban Outfitters, all of which operate numerous stores at Simon malls. What’s more, the Centers for Disease Control have urged people to avoid gathering in groups of more than 10. Earlier this week, New Jersey ordered all malls closed, while major centers like Hudson Yards in New York and Mall of America in Minnesota closed on their own.
The pressure isn’t just on mall stores. Many retailers with stand-alone locations or strip-mall stores, such as Best Buy, Home Depot, Target, and Walmart have announced reduced hours. Others, like Ulta Beauty, which depends on in-house beauty treatments to bring customers into the stores, have closed shop until at least March 31.
All told, according to fresh estimates from GlobalData Retail, some 11.4% of all shops in the U.S. are closed or will close. The research firm now estimates retail sales will fall by nearly 6% in both March and April. And with e-commerce only providing a partial offset, it’s shaping up to be a brutal spring for retailers and mall developers alike.
With the federal government considering industry bailouts, the International Council of Shopping Centers, which represents U.S. operators of malls, outlet centers, and shopping centers has asked the Trump administration for aid.
“These closures are placing an insurmountable strain on our members, and we believe federal government action is urgently needed,” ICSC chief executive officer Tom McGee said in a letter on Tuesday.
He called on the federal government to “guarantee or directly pay for business interruption coverage for retailers, restaurants and other tenants as well as landlords.” McGee noted that states and local governments get $400 billion a year in taxes from the shopping center industry in making his case.
The National Retail Federation also asked the Trump administration for help in the form of delays in tax filings and loans, as well as other initiatives, to help stores deal with liquidity until they can resume business.
“The decisions being made in Washington this week will have lasting effects on our businesses, our associates and the communities we serve,” NRF chief executive Matt Shay wrote in his letter.
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