Connect with us

Favorite News

Mall owner Washington Prime Group files for Chapter 11 bankruptcy protection, citing COVID challenges

Mall owner Washington Prime Group files for Chapter 11 bankruptcy protection, citing COVID-19


Mall owner Washington Prime Group files for Chapter 11 bankruptcy protection, citing COVID challenges

Can malls survive COVID-19 pandemic and permanent store closings?Consumers are scared to go out and retailers are floundering. Is there a future for the traditional indoor shopping mall?USA TODAY, WochitMall owner Washington Prime Group Inc. filed for Chapter 11 bankruptcy protection late Sunday, citing the COVID-19 pandemic for making the move necessary.The company, which spun off from the nation’s largest mall operator, Simon Property Group in 2014, currently has 102 shopping centers, according to documents filed in the U.S. Bankruptcy Court for the Southern District of Texas. Washington Prime is based in Columbus, Ohio.Several retailers – some with locations in Washington Prime properties – have filed and exited bankruptcy since May 2020 amid the pandemic, including Christopher & Banks, Guitar Center, New York & Company, J.C. Penney, Stein Mart, Sur La Table, Ascena Retail Group and Tuesday Morning. The bankruptcies have included store closings.Save better, spend better:  Money tips and advice delivered right to your inbox. Sign up hereThanksgiving 2021 store closings: Best Buy joins Walmart, Target in keeping stores closed for Thanksgiving“The COVID-19 pandemic has created significant challenges for many companies, including Washington Prime Group, making a Chapter 11 filing necessary to reduce the Company’s outstanding indebtedness,” Washington Prime Group said in a news release.The mall operator’s bankruptcy doesn’t come as a surprise. In public filings, Washington Prime has said it was in talks with creditors to restructure its finances and that it might seek bankruptcy protection.In announcing its bankruptcy filing, the company said it secured $100 million in “debtor-in-possession financing from the Consenting Creditors to support day-to-day operations during the Chapter 11 process and ensure that all business operations continue in the ordinary course without interruption.”Lou Conforti, CEO and director of Washington Prime Group, said in the release the restructuring would enable the company to “right size its balance sheet and position the Company for success going forward.”Washington Prime listed assets of $4.03 billion and debts of $3.47 billion in court documents.The company said its restructuring agreement with its creditors, led by its largest, SVPGlobal, allows it to deleverage its balance sheet by $950 million. In addition, Washington Prime Group and SVPGlobal anticipate an equity offering of $325 million as part of the restructuring. The agreement also includes some milestones, including a 60-day target for the court to enter confirm the Chapter 11 plan.Will shopping malls close?Like other mall operators, Washington Prime saw its revenue hammered last year by tenants who were unable to pay full rent or closed during the pandemic, as shoppers turned to online instead of in-person purchases.More than 40 major retailers declared bankruptcy and more than 11,000 stores were announced for closure in 2020, which beat past store closings records.But malls were struggling before the pandemic.Shopping: These retailers will either make it or break it in 2021From J.C. Penney to Victoria’s Secret, here are 8 retailers who will either make it or break it in 2021.Staff Video, USA TODAYExperts have said the crisis might hasten the closure of underperforming malls and the repurposing of many centers that remain open. Ultimately, 1 in 4 malls and as many as 1 in 2 could eventually go out of business, according to projections by Coresight Research analysts and executives.Coresight, which tracks retail closures, projected in 2020 that about 25% of America’s malls would disappear within the next three to five years.That could rise to as many as 50% “if we can’t stop the bleeding,” Coresight CEO Deborah Weinswig said in an interview with USA TODAY last summer. “That ends up changing the face of America.”In November, two companies, CBL Properties and PREIT, which together own 130 shopping centers, filed for Chapter 11.7-Eleven Slurpee freebie: Free Slurpees return in July, but you need to be a rewards memberTarget Circle guide: How to save, get deals and earn cash back with Target’s free loyalty programContributing: Nathan Bomey and Charisse Jones, USA TODAY; Jim Weiker, The Columbus DispatchFollow USA TODAY reporter Kelly Tyko on Twitter: @KellyTyko. For more shopping tips and deals, join us on our Shopping Ninjas Facebook group. 

Source link

Continue Reading
You may also like...
Click to comment

Leave a Reply

Your email address will not be published.


To Top
error: Content is protected !!