Comment: Sharing the risk: Retailers and their landlords face a post-pandemic dilemma
while they’re not operating, along with his attempt to impose a revenue risk-sharing model on his landlords, are the most visible fissures appearing in the relationships between the major mall landlords and retail chains.
The big retail centres, traditionally with occupancy rates close to 100 per cent, are going to have their business models challenged. If they were exposed to the fluctuations of retailers’ revenues – if, even at the margin, they were exposed to all the risks of retailers’ management skills, the shifting trends within retail and the broader economic conditions -- they would become something quite different.Their incomes would become more volatile and the yields on their securities less predictable in circumstances where the retailers, not the landlords, would control the responses to the risks.
Mall stalwarts like Neiman Marcus, JC Penney, Brooks Brothers, J.Crew, GNC, Luck Brand, G-Star Raw, Centric Brands, John Varvatos, True Religion and a host of others have filed for bankruptcy. Sears, having emerged from Chapter 11 only two years ago, is again teetering. Simon - with a partner, Authentic Brands - bought youth fashion retailer Aeropostale in 2016. During the pandemic they have added Forever 21, acquired Brooks Brothers in bankruptcy for $US325 million , Lucky Brand for $US140 million and, with Brookfield Properties, are the front-runners to buy JC Penney.
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