New Jersey’s American Dream mall could use a Black Friday boost

“How the holiday season goes could make or break whether retailers on the brink of bankruptcy are forced to liquidate,” said Vince Tibone, a retail analyst at commercial-property data firm Green Street. “Black Friday is not going to be the giant in-person shopping event that it has been in prior years.”

It’s not just the stores that face challenges. Like many new shopping centers, American Dream was designed around experiences, including an indoor ski slope and a water park. Those perks, which are open under limited capacity and health protocol restrictions, don’t hold the same appeal in the age of Covid-19.

The stakes are high. The Ghermezian family, which owns the mall through its Triple Five Group real estate company, borrowed billions to complete the project, using prized assets in the retail portfolio as collateral. Almost $1.7 billion of construction loans were backed by equity interests in West Edmonton Mall and Mall of America, and the two properties carry more than $2 billion in debt. Triple Five already missed monthly payments on Mall of America’s $1.4 billion mortgage earlier this year, and the family’s net worth has taken a hit.

Poor timing


The mall’s poor timing is only the latest in a series of missteps and stumbles since it was first envisioned in 1996. After breaking ground in 2004, the project originally known as Meadowlands Xanadu saw its first developer, Mills Corp., go nearly bankrupt just a few years later. Colony Capital then stepped in, but the development stalled again after the collapse of Lehman Brothers, which had been a lender. Triple Five took over about a decade ago.

After more delays, the mall was finally set to open its retail stores in March of this year, only to push that back by seven months when the coronavirus pandemic prompted widespread lockdowns.

Now, more than 100 stores and six attractions are open at American Dream, including an indoor snow resort, a skating rink and a Nickelodeon theme park, said spokeswoman Patti Costantino. The attractions—with limited capacityare drawing sell-out crowds every weekend, she said.

“With so many families unable to travel this holiday,” the mall serves as an entertainment destination, she said by email.

Still, in this environment, it’s an uphill battle for any indoor mall. In a survey of likely shoppers in the U.S. released last month by the International Council of Shopping Centers, less than half of respondents said they planned to go to a mall this holiday season.

Financial pressure


That kind of reluctance has led to financial distress across the industry. Retailers have missed roughly $52 billion in rent since April. Major chains from Neiman Marcus to J.C. Penney have filed for bankruptcy, as well as mall landlords like CBL & Associates Properties Inc. and Pennsylvania Real Estate Investment Trust.

Many companies are now turning toward online channels and curbside pickup to fill the in-person shopping void. Brookfield Properties, one of the largest U.S. mall owners, is providing over 3,300 curbside parking spots across its malls and will offer a virtual store reservation platform for people who don’t want to cram in a line.

Fashion retailer Abercrombie & Fitch is one store that will rely on curbside pickup this holiday season. “With all of the challenges that the carriers are going to have in delivering an escalated number of packages to customers, it’s going to be a good thing to have stores,” Chief Executive Officer Fran Horowitz said. The company has two stores—Abercrombie Kids and Hollister—at American Dream.

At Old Navy, the company added convenience spots, which are stations inside its stores where consumers can make returns and pick up online orders and avoid the checkout line.

As Black Friday approaches, the pressure is mounting for retailers.

“If we have a continuation of the crisis at this level without government support, I do worry about the health of the industry,” said Tom McGee, CEO of the International Council of Shopping Centers. His concern, he said, is that “we will have vacant shopping centers and tenants around the country.”

Source Article

Next Post

Wisconsin State Park admission available soon, design contest for 2022 open | WFRV Local 5

Thu Nov 26 , 2020
MADISON, Wis. (WFRV) – The Wisconsin State Park 2021 admission stickers and trail passes are available for gift options this holiday season. As a result, their 2022 sticker design contest for high schoolers has now begun. According to a release, the state park says the stickers and passes are perfect […]

You May Like