Former Toys ‘R’ Us CEO and Storch Advisors CEO Gerald Storch joins FOX Business to discuss the big brands we lost in the past decade and what went wrong.
Wall Street is on edge as even the busiest malls in the country struggle with Internet shopping competition, The Wall Street Journal reported Thursday.
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While malls in popular locations with loyal shoppers brought in steady profits for years while competing with online retail giants, they are just now starting to feel the strain that smaller shopping centers have felt since the boom of Internet shopping combined with two-day shipping.
Landlords are warning of slowing income growth, saying retail bankruptcies can stifle overall operating income.
Friends spending the weekend in the shopping mall/ iStock
Simon Property Group, for example, which owns a mall in Pennsylvania and shopping plaza in Georgia, lowered its 2019 guidance on net income to between $6.76 and $6.81 from between $7.04 and $7.14 per share, according to the Journal.
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Taubman Centers Inc., which owns a mall in New Jersey and a shopping center in Los Angeles, lowered its 2019 guidance on same-property net operating income growth to between zero and 1 percent from 2 percent, the Journal reported.
Taubman Chief Operating Officer William Taubman said the September bankruptcy filing of Forever 21 -- an inexpensive retail giant that was highly popular among young, female mall-goers -- and its decision to shut down most of its store locations had a huge impact on malls like the ones owned by Taubman.
Forever 21 retail store / iStock
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"Forever 21’s bankruptcy has disproportionately impacted 'A-malls' and Taubman Centers specifically," he said.
While top-tier malls are still able to maintain an average 90-percent occupancy rate, analysts are concerned that landlords won't be able to replace fleeing tenants as rent prices continue to rise.
Retailers announced plans to close nearly 9,300 stores in 2019, according to data from Coresight Research.
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Retailers that will close more than 100 locations include: Gymboree (805), Dress Barn (605) Charlotte Russe (520), Fred's (520), Family Dollar (390) and Shopko (370).
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December 26, 2019 at 11:11PM
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Wall Street watching as top-tier malls feel pressure from e-commerce retailers - Fox Business
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