Brick-and-Mortar Meltdown Fells Express. Simon Property & Brookfield, to Avert Vacant Stores and Bad Leases at their Malls, to Buy the Brands and 435 Stores out of Bankruptcy

This Has Been Years in the Making.

By Wolf Richter for WOLF STREET.

Express Inc, once a high-flying fashion retailer for the younger crowd with 542 stores in the US, and with three brands – Express, UpWest, and Bonobos – finally filed for pre-packaged Chapter 11 bankruptcy today.

Since its heyday in 2016, the company has already closed 114 stores. The store count had peaked in the fiscal year ended January 2017 at 656 stores. Now it will close another 95 Express stores and all its 12 UpWest stores, bringing the store count to about 435 stores.

Mall landlords have a lot at stake, they’re the biggest creditors: In its last quarterly 10-Q filing with the SEC, Express reported lease liabilities of $625 million – far larger than its outright debt of $271 million. Lease liabilities made up nearly half of its total liabilities of $1.32 billion.

So… a consortium, including the two largest mall landlords – Simon Property Group and Brookfield in whose malls many of the surviving stores are – have worked out a “non-binding” deal with Express and its debt-holders to buy the brands, the surviving 435 stores, and the retail operations out of bankruptcy.

The consortium is led by WHP Global, an investment company founded in 2019, which has bought numerous retail brands and fashion labels that had been liquidated in bankruptcy court.

For Simon Property and Brookfield, it’s another desperate effort to keep stores at their malls open to keep their malls alive. Among the other brands and stores they’d bought out of bankruptcy was J.C. Penney, which anchors many of their malls. As goes the anchor, so goes the mall.

There’s DIP financing: Express said it has received a commitment for $35 million in new money in form of a “senior secured super-priority priming first lien debtor-in-possession [DIP] asset-based loan.” In addition, it worked out a deal with its existing lenders to convert various debts into $162 million of DIP financing, which includes $10 million that are part of the $35 million of new money.

The sale of the brands and stores, and the DIP financing deals, which were negotiated before the bankruptcy filing, make this a prepackaged Chapter 11 filing, with all negotiated elements subject to court approval.

And the pandemic-era government money keeps flowing. In the bankruptcy announcement, Express said: “Additionally, on April 15, 2024, the Company received $49 million in cash from the Internal Revenue Service related to the CARES Act.” The CARES Act was of course the $2.2 trillion stimulus bill that included, among many other measures, the PPP loan program; it was passed in March 2020, and it keeps on giving. The $49 million is now cited as money that will help fund Express during the bankruptcy proceedings.

Express said in the bankruptcy announcement that:

  • Its retail stores are open with their usual hours.
  • Its ecommerce sites,, and, along with all brand apps, “are accepting orders.”
  • All of its brands “are fulfilling orders and processing returns, merchandise return policies remain unchanged, and gift cards and store credits are currently being redeemed in-store.”
  • “Bonobos is continuing to serve its premium wholesale customers.”
  • “Customer benefits related to the EXPRESS Insider program are expected to remain the same.”

Bonobos has a tumultuous history. Express Inc together with WHP Global, the above-mentioned leader of the consortium, bought Bonobos in April 2023, when it was already clear that Express would head sooner or later into bankruptcy court.

Bonobos was founded in 2007 as an online-only company that designs and sells menswear. In 2012, it launched “Guideshop” in partnership with Nordstrom with physical locations at department stores. For your amusement, we’ve have included a chart below of sales at brick-and-mortar department stores.

In 2017, Walmart acquired Bonobos for $310 million. The brand’s merchandise would be sold on which Walmart had acquired for $3.3 billion in 2016. But then Walmart moved all its ecommerce business to, now the second largest ecommerce retailer in the US, with huge growth rates year after year. In 2020, Walmart began winding down In April 2023, it sold Bonobos to Express and WHP Global for $75 million.

Express got the operating assets and liabilities for $25 million and WHP Global got the brand rights for $50 million. Express agreed to license the brand rights and pay royalty fees to WHP Global.

Desperate and calculating landlords faced with ecommerce. Simon Property and Brookfield have already defaulted on the debts of a bunch of their malls, and let the properties go back to the lenders, including through foreclosure — “jingle mail” is a standard procedure in CRE — and the lenders had to take the big losses.

The malls Simon Property walked away from to let lenders take the losses include the 1.2-million-square-foot Town Center at Cobb in Georgia, the 1.1-million-square-foot Montgomery Mall in North Wales, Pennsylvania, and the 1-million-square-foot Independence Center in a suburb of Kansas City, Missouri, which generated what was then (2019) the largest loss ever by a retail CMBS loan.

So this is just one more chapter in what we have come to call since 2016 the Brick-and-Mortar Meltdown that has melted down mall retailers from Sears on down. It wasn’t brought about by the softening of consumer demand, or similar BS that ignorant reporters manage to stick into the headlines to get clicks – consumers are spending more than ever as incomes and population have surged. It was brought about by ecommerce that has turned into a structural shift in how consumers shop.

Much of classic mall retailing moved to online sites, not just Amazon, but also the ecommerce sites of the largest retailers, such as Walmart, Macy’s, Target, and even the online sites of the Express brands, and to smaller sites, and now to super-cheap Chinese sites that ship direct from China.

Here is the fate of department stores – those few chains that are still alive today. They anchored the malls, which is why Simon Property and Brookfield are so desperate in keeping the big retailers in their malls open:

Express is catering to 20-30-year-olds, and those in that age group now grew up with ecommerce and just take it for granted, and many of them cannot figure out why on earth anyone would want to waste their time going to a mall. They buy this stuff on their smartphones and on their laptops at work.

The big exception to the brick-and-mortar meltdown are strip malls anchored by grocery stores. There are some categories of brick-and-mortar retailers that have been spared the brunt of the attack by ecommerce, including: auto dealers (though that is now changing too) but they own their own properties; gasoline stations (though that is now changing too as EVs are gaining market share); and grocery stores (though online sales are making headway as well, including by online-only specialty food retailers, such as Weee).

These three categories combined – auto dealers, gas stations, and grocery stores – account for 44% of total retail trade. The rest of the retailers are getting whittled down by ecommerce. What’s growing at Walmart are its grocery sales, and what’s booming are its ecommerce sales (+17% in its latest quarter), and what is declining, as it said, are its sales in the rest of the aisles.

Strip malls anchored by grocery stores, with the other tenants being largely restaurants and services providers (hair and nail salons, healthcare operations, etc.) that cannot be replaced by ecommerce are doing well. It’s the big malls and their stores that have come under brutal attack from ecommerce.

Express Inc’s shares [EXPR] have long been in our pantheon of Imploded Stocks. The company went public via IPO in 2010. The shares initially soared, reached their all-time high in March 2012, and then zigzagged lower. By August 2023, they’d been reduced to a penny stock, when the company announced a 1-for-20 reverse stock split, where each 20 shares became 1 share, and the stock prices multiplied by 20, to keep the shares from getting delisted for a while longer.

Adjusted for the 1-for-20 reverse-stock-split, the IPO price of $17 amounted to $340, and the all-time high in March 2012 amounted to $523.

“The Company expects that its stockholders could experience a significant or complete loss on their investment, depending on the outcome of the Chapter 11 process,” the company said in its press release today, upon which shares first plunged 50% to 35 cents, and then jumped by 177% to 97 cents, then re-plunged to close at 83 cents, up by 18% for the day, and down by 99.8% from their all-time high in 2012.

Note the hilarious meme-stock action from late 2020 through the first half of 2021 that briefly produced gains of 650% and more, followed by a near total wipeout of those that didn’t get out in time.

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  99 comments for “Brick-and-Mortar Meltdown Fells Express. Simon Property & Brookfield, to Avert Vacant Stores and Bad Leases at their Malls, to Buy the Brands and 435 Stores out of Bankruptcy

  1. JeffD says:

    In the future, this will be a business school case study in desperate mulri-front strategies to cook the books at the end of the over-leverage era.

    • Harrold says:

      A lot has been written about sunk costs, and how it’s better to quit than to spend more money on a loser. I understand wanting to make the mall look full, but why would they want retail stores that can’t make it on their own???

      They need new ideas desperately. If ecommerce can disrupt retail, so can something else. My suggestion would be more entertainment and services.

      • Cas127 says:

        One possibility – Mall owners owed a ton of accrued unpaid rent might be able to “credit bid” those amounts in a bankruptcy in order to acquire the stores/inventory/supply system for very little in New incremental money.

        In essence, the landlords might have kept Express on life support for a long, long time and can now use those owed monies as “credits” in a bankruptcy.

        Not 100% sure, but possible.

        • SeanDF says:

          I think you are actually correct. As a developer of retail space for decades, that is probably how Simon is handling it, as a senior lien in the BK. These events are slow train wrecks, the mall owners have tons of time. I’m sure the Wexler family hyper leveraged Express to squeeze as much cash out as possible while waltzing out the door, the big boys don’t ever lose!

      • Keith says:

        I think entertainment is the way to go. I am a regular mall goer, and I even have a couple of favorites for out of town excursions. This is for one reason- playgrounds for my four and one year olds. It gets their energy out, gives them a chance to play in a nice playground (both the for-pay and free versions), which is especially nice as the climate I live in gets frigid and wet winters and ungodly hot summers. It is a nice break in the AC, and the four year old loves the ice cream and sometimes lunch there. I am not the only parent that likes this. If malls can embrace more of this, plus some services, like routine medical and such, it could become a nice one stop shop for people for entertainment and services.

      • blahblahbloo says:

        Yes. The mall needs to be a pleasant place to be, not somewhere you just need to go to buy a shirt. Just try to park at Irvine Spectrum on a weekend.

  2. George A Romero says:

    1978’s Dawn of the Dead is looking pretty prescient.

  3. Minutes says:

    Zombies never die

    • James says:

      I disagree,heads shots/cleaver to head/crossbow bolt/helicopter blade slicing skull,all seem to work just fine in killing zombies,George Romero has me back on this one(even from the grave!).

    • Home toad says:

      “The stores have come under brutal attack by e-commerce”.
      It was the zombies

      The stores are like – the unnecessary middle man- whose days are over.

  4. Paul says:

    This will not end well.

  5. Cloud Cover says:

    Business wise, the Simon family seems to be very competent for many decades. As Wolf mentioned, they “walked away” from a number of malls, which I take it to mean they themselves didn’t own them, just managed them…? In Indianapolis, a few decades ago, they bought the Pacers basketball team when attendance was so poor that the NBA was going to allow the franchise to leave town- that was probably their best investment over time, lol.
    So, time will tell, how in retrospect this was a ‘desperate’ move or a smart one.
    Which dovetails to this paradox- sure, more ecommerce ( I do it too, though less often for clothes), and yet Americans are more “lonely” and “isolated” than ever before.
    So maybe the Death of the Mall is within the Twain category…?

    • Wolf Richter says:

      SPG owned the malls, but the financing came from lenders, and SPG defaulted on the debt, and walked away from the debt (jingle mail), and let the lenders have the property and take the losses.

      Jingle mail is standard procedure in CRE. It’s the lenders that take the big losses. The landlords lose their equity in the property, if any, and that’s it.

      The move was “desperate.” Whether or not it was also “smart” we’ll see in the future. But buying dead retailer brands and stores out of bankruptcy to keep malls alive against ecommerce is a questionable long-term strategy, though it has short-term benefits (keeping the stores open).

      But then, what else are mall landlords supposed to do? Malls are their business, and they need to keep the malls alive or walk away from them. Those are the two options; Simon and Brookfield are pursuing both options.

      Here is SPG’s stock price, last 10 years. The stock is down 37% since the all-time high in July 2016, about the time I started using “brick-and-mortar meltdown.” SPG is still in pretty good shape. A bunch of mall REITs have already filed for bankruptcy.

      • Louie says:

        But then, what else are mall landlords supposed to do?

        A smart business decision would be to put a bordello in every mall!
        Just one example of the kind of out of the box thinking they will have to do to change the mix of enterprises in those facilities.

      • SeanDF says:

        SPG will leverage as much cash out as possible, before the fire fully engulfs the dumpster. Nobody will miss any meals at casa Simon, however, the vanishing point is clearly visible. They are merely cherry picking the best assets, hoping their ability to finance these gems doesn’t go straight to zero, especially after repeatedly sending the keys to prominent lenders.

        The irony, of course, is SPG was once a gold standard operator with great debt coverage and reliable dividends to coupon clippers. Even worse is, someday the consumer will wake up from his Amazon nightmare, and crave a tactile experience of actually touching items for sale before purchase.

        • 91B20 1stCav (AUS) says:

          SeanDF – re: your last sentence – consider that the ‘awakening’ may be less-likely amongst those who have never experienced the tactile one (…one only ‘knows what one knows’, (and has access to), n’est-ce pas?)…

          may we all find a better day.

    • Einhal says:

      The part that most people don’t know is that the commercial mortgage loans are non-recourse, so if the loan is more than the value of the property, the sponsors walk away and the lenders can’t sue for a deficiency.

      • Wolf Richter says:

        Yes, and even if they’re recourse mortgages, the property is in an LLC that has no other assets in it, and the lender only gets the LLC.

        • Shiloh1 says:

          Who are the bag holders – the pension funds?

        • Wolf Richter says:

          Bond funds (retail investors), pension funds, life insurers, foreign pension funds, foreign life insurers, banks, foreign banks, institutional investors of all kind, everywhere. The losses are spread far and wide, which is why they haven’t been a big issue.

      • Cas127 says:

        Actually, I’d like to hear a ton more about the *recourse* loans out there and the ocean of deficiency liabilities lurking in the background.

        *Those* don’t get talked about enough.

        In general, lenders aren’t known for their sunny outlook and generous nature – so it seems pretty odd that so many loans are allegedly non-recourse at all.

        On the other hand, the long March of ZIRP did force funds-engorged lenders to strip away many traditional lending protections as desperate competing lenders did so.

        Still, I’ve got to imagine a lot of deficiency liabilities haunting around out there. I wonder if there are any stats.

        • Wolf Richter says:


          Read my comment above, where I said:

          “…and even if they’re recourse mortgages, the property is in an LLC that has no other assets in it, and the lender only gets the LLC.”

          There are NO DEFICIENCY LIABILITIES in CRE. Putting a property into an LLC is the most fundamental thing to do – for all kinds of reasons. Landlords aren’t idiots.

        • cas127 says:

          Well, if landlords aren’t idiots…then it does raise the question about why they would allow so much of their loan protection to be stripped away (no borrower personal guaranties, loose or non-existent covenants, allowing 1 asset LLCs to be legal borrowers, etc. etc.).

          Some/Most of it may have been ZIRP-driven competitive pressure (*as I said*) – the desperate hunt for yield leading incautious lenders to do foolish, foolish things.

          *But*…for every foolish lender, there were likely lenders for whom ZIRP wasn’t really their first rodeo/goat slaughter (although it was likely the longest). Understanding the dynamics/implications of interest rate cycling is the core of what bankers/lenders *do*.

          Established lenders with anything resembling an understanding of DCF analyses (and how interest rates affect them) had to have known that collateral values were being inflated to idiot levels by ZIRP (and 2nd grade level Excel spreadsheet analysis).

          To loan against those nosebleed collateral valuations *and* give away a ton of borrower restrictions/lender rights (such as effective deficiency judgment rights) is so goofy as to be worthy of further inquiry.

          As I said, I can believe that newbies got suckered, old hands got desperate over years of ZIRP (“You gotta dance while the music is playing,” ahem), etc.

          But still makes you wonder what percentage of lenders could really, fully hav believed that interest rates would be perpetually pinned to ZIRP in a nation whose macro fundamentals (national debt, trade deficits) have relentlessly deteriorated for 50+ years.

        • Wolf Richter says:

          Seems you miss a couple of fundamental principle here:

          1. “You cannot lose money in real estate” was the golden rule now being unlearned. But at the time, everyone believed in it.

          2. “Other people’s money” is used to fund these loans: bond funds, life insurers, mortgage REITs, pension funds, banks, etc… they all represent “other people’s money.” The people who actually make those decisions get their huge bonuses and have moved on by the time this goes sour.

        • NBay says:

          Still wondering what the “decision makers” are going to do with the rest of us. Way past only the darker skinned people, and FAR into the once better off whites…..and of course trashed unions.

          Good, if sad, article on people now wealthy enough to easily buy “law” and politicians.

  6. Filippo says:

    I live within a stones throw of a couple of outdoor malls and a couple of miles of a rather prominent enclosed mall. The outdoors are thriving judging from the traffic vs. the enclosed mall, just based on a visual observation.
    In addition to repurposing and buying up chapter 11 tenants, is it too far out to consider converting some enclosed locations to outdoor malls – especially ones in warmer locations?

    • Atlanticmoon says:

      Traditional mall won’t survive. I have one in my town and a lot of the foot traffic is the Target and Apple store. Other than that, it’s different stores selling the same stuff. They’re talking about introducing activity based things like a pickleball place, etc. but who knows when that will happen. I don’t know why but outdoor malls seem to offer better dining options.

      • HowNow says:

        To an extent, the marketing of branded products, especially clothing, helped destroy the commerce of a mall. You could buy the very same brands at most of the major department stores: Macy’s, Belks, Dillards, Pennys. Some of the specialty retailers, like footware stores, featured what was in the larger dept. stores. The only differentiator was the price, and online buying got buyers better prices.

        Things change and although smart-phone communication is, for many younger people, a substitute for a real-life social experience, there’s no reason to think that a “marketplace” won’t be a significant social experience again. Human migration is littered with ghost towns. The enclosed malls are being ghosted, but the need for social interaction will probably reemerge. We just don’t seem to have a model of that right now.

        • old ghost says:

          Back when dinosaurs still roamed, the local enclosed mall (not run by Simon at the time) let local groups hold free meetings, card parties, gun & coin shows, etc, in the empty stores. There was even a tavern and pet shop inside that enclosed mall.

          But as the mall filled up, the smaller stores seemed to fill up with cell phone sellers/services. I remember one time (circa 2005) looking at the mall directory of stores, and thinking that a third or more all seemed to be peddling something related to cell phones.

          The last time I was in that Simon Mall, the place seemed to be a giant food court, with a bunch of clothing stores attached. The variety of stores are greatly reduced. No more vitamine, book, or nick-nack stores.

        • Warren G. Harding says:

          Malls also started actively running off teenagers about 20 years ago. Once the teenager found out they were not welcome, they never went back to the malls.

      • CCCB says:

        Folks no longer want to spend 45 minutes parking and walking and potentially getting robbed or having their cars broken into to buy something they can click on and have delivered to their front porch for free the same day.

        If I was in the mall business, I’d get out as quick as I could and sell the well-located property to developers for apartments or condos.

  7. SpencerG says:


  8. SoCalBeachDude says:

    Nobody ever heard of or cared about this very sleazy retail store.

    • Wolf Richter says:

      My wife used to shop there. That’s somebody.

      • SeanDF says:

        One of Leslie Wexler’s many crown jewels. Wexler was Jeffrey Epstein’s main benefactor, a multi-billionaire mover and shaker in the hyper competitive “schmatza” rag trade.

    • Nyguy says:

      One mans sleaze is another mans squeeze, lol.

      Never heard of any of these stores, if it ain’t got guitars or outdoor gear I ain’t interested

    • Russell says:

      Express was once a part of The Limited Empire, a very strong company owning such stores as Victoria’s Secret and Abercrombie and Fitch.

    • blahblahbloo says:

      At least back in the day, they used to make a pretty nice pair of jeans (not sure about now). Right this second I’m wearing a ~10 year old pair of Express jeans that look just about new.

  9. Mr wake up says:

    I have found some of the best deals last few years in brick and mortar stores. E-commerce has their flash sales. But if you know your prices. You can make out like a bandit in Simon and Tanger outlet stores hitting the clearance racks.

    • Wolf Richter says:

      It seems you don’t understand ecommerce. It’s not how ecommerce works. Leave it up to younger people (less than 70?) to figure it out. You just keep shopping at brick and mortar stores. Somebody has to.

      • Bob says:

        What’s there to understand for the consumer? Similar products at better prices is what matters. He’s buying clothing, not investing in the malls.

        • Wolf Richter says:

          “Mr wake up” said: “E-commerce has their flash sales.”

          Ecommerce pricing doesn’t work the way “Mr wake up” imagines.

          Ecommerce has “variable pricing” where everyone gets a different price depending on your profile known about you, the time of the day or week or whatever, and a million other factors, and these prices change all the time. If you google a product, you get a many different prices, from the cheapest to the most expensive.

          Try this: Clean the history (all of it “forever”) of your browser, then search for:

          cheap Levis

          And see what you get.

          If you don’t understand “variable pricing” and how it works, just keep going to the mall.

          You can use “variable pricing” to your advantage if you know how.

          You have to understand that competition online is brutal, and it’s everywhere from everywhere. You’re not just going into one store. Of course, if you buy everything online by going directly to Amazon, you’re back to being a lost cause.

    • Wolf Richter says:

      You’re abusing my site to spread ignorant bullshit. That’s why it was blocked, and so now you spread the same ignorant bullshit again, and I will have to waste my time cleaning it up. You have no idea how online prices work. A retailer that runs a special puts the same price online, except you people don’t see it because you don’t go online to shop, and when you’re at the retailer and see the special, you don’t see what also posted online, where every retailer out there competes with that sales price online with even lower prices, but you people don’t see it because you’re not online.

      You’re welcome to shop at the mall, you’re not welcome to abuse my site to spread ignorant bullshit.

  10. MM says:

    Lots of cool videos on youtube of folks exploring abandoned malls.

  11. Celt says:

    It’s much safer to shop online than at a brick and mortar mall these days. Something few will talk about.

    • Wolf Richter says:

      yes, lots of people get killed or seriously injured by drivers on their way to the mall, including the drivers themselves. Traffic accidents kill 40,000 people a year in the US and seriously injure about 2 million people. Not getting into a car but buying this stuff from home is much safer, that’s for sure.

    • MM says:

      Counter-argument: the rise of Amazon Logistics has caused an influx of Amazon delivery vans, usually driven by seemingly inexperienced drivers.

      Anecdotally, I’m always navigating around Amazon vans left in the middle of the road while the driver does the delivery, or dodging them on the highway because they didn’t look before changing lanes.

      I haven’t had the same experience with FedEx or UPS trucks.

      Again, anecdotal.

      • NBay says:

        Difference is “Independent Contractors” vs Union drivers. Former aren’t making enough to stay long, so of course they are all inexperienced…..and don’t care much, anyway.

        Have the “right to work”, though….that’s more “freedom”, yes?

  12. Varmint says:

    “cannot figure out why on earth anyone would want to waste their time going to a mall”

    My thoughts exactly as my old school, mall loving wife drugged me past a (gasp!) Express store. Should have given it last rites.

  13. Hubberts Curve says:

    The First Full size indoor mall in the Western Suburbs of Portland was built in the 1970’s ( Washington Square) and was originally anchored by a Sears. The Sears is gone but the mall is still thriving. In fact last week an article came out in the local paper that it had achieved 100% occupancy. I don’t go to malls much but the few times I have been there it has been packed.
    I am not sure who owns it but it is definitely a Unicorn and I can’t figure out why. It is fully indoor with the same exact configuration as when it was opened in the 70’s.

  14. ApartmentInvestor says:

    I knew brick and mortar retail was doomed when my parents (born in the mid 1930’s) who got a color TV in the 80’s, a Microwave in the 90’s and a VCR “after” Y2K started doing most shopping online…

  15. sufferinsucatash says:

    A game company just bulldozed an entire mall near me. To build their corporate offices, they say.

    The future of malls people. 🚜

    • Cas127 says:

      The mall *land* can be pretty valuable as it usually has excellent transportation access…and acres and acres and acres of already levelled land (currently for parking) that can easily be re-purposed. But any-tear down is expensive and new-build doesn’t have that particular demo-expense.

      The tragedy is that a lot of real estate is not constructed in the first place with the possibility of ultimate re-purposing. Couldn’t always be done, but in some/many places clever architects might make it possible.

      But nobody thought in those terms for last 70 years.

  16. Vlad the Impaler says:

    I really don’t understand the PPP loans. It seems like a free handout to businesses with 99% of them forgiven / never paid back. Like why are on earth are tax payers giving $49M to Express in April of 2024?!!! Why are we transferring wealth to business owners most of who are already wealthy?

    • Dirty Work says:

      I don’t disagree with the premise of your question, but in this case it’s most likely ERTC not PPP. The IRS, as of just a week ago (tax day), closed down ERTC applications for the 2020 tax year. 2021 ERTC applications can be submitted until April 2025.

      • Cas127 says:

        Ok, maybe.

        But it does seem pretty odd that a desperate Express waited until Spring 2024 (4 years after pandemic start, 2 years post pandemic…) to get these funds.

        Just seems…weird.

        • NBay says:

          Just more white collar crime…aka, “I just used the laws of the land” (DJT)…so it’s all legal….not even worth bitching about anymore, especially since it’s only going to get worse.

          Keep an eye on how many people are still between you and yours and the street……SCOTUS may rule people can’t sleep outside, ANYWHERE……and like one of the liberal judges said, “sleeping is like breathing” ,can’t live without it.

  17. Bearly Bullish says:

    When will malls get the memo from 2024 that traditional malls are dead. You can only have zombies running so long.
    With online shopping, offline large format malls only make sense to try on, exchange or pickup. Gen z spends more time on their phone than hanging out at the mall.
    The only saving grace for tier one locations has been the experience economy: restaurants, movies

  18. Timothy says:

    I was told by ex-mall tenants that they could no longer afford the constantly rising rental demanded by their landlord and buyers just turned away from their goods. Pension fund mall investors require never ending annual cost of living increases from somewhere and they thought that they would be able to extract this from mall shoppers forever. Finished now unless their mall managers sell food, coffee, entertainment and booze in various shapes and forms exclusively. Everything else is provided by the Internet.

    • ApartmentInvestor says:

      When Timothy wrote: “Pension fund mall investors require never ending annual cost of living increases from somewhere and they thought that they would be able to extract this from mall shoppers forever. ” it reminded that I’m betting that pro sport stadiums will “be the new malls” since there has to be a point where people say “this is just too expensive”…

  19. eg says:

    The “Mallpocalypse” grinds on. I recall seeing some staggering statistics for the mall square foot per person in the US — at its peak it was vastly “over-malled” by comparison to Canada. This is only making the ongoing fall from that lofty elevation all the more epic.

    The one slightly odd case in this article is what appears to be the simultaneous collapse of an e-commerce outfit related to these in-person retailers. Maybe that’s just idiosyncratic to bad management in this particular case, or is it part of a bigger trend of concentration in the e-commerce space itself, I wonder?

  20. fizee says:

    Can people still shop till they drop on their phones? And how do drunken sailors manage those small screens?

    • Cas127 says:

      Amazon just mails them a friendly, giant red “Buy Sh*t” button.

      You can be blind blotto and still manage to hit that button.

    • Wolf Richter says:

      The problem is that it’s so easy and quick to buy online that people overbuy. Every time you’re on a site to buy something specific (for example, an electric tea kettle), you’re bombarded with ads and suggestions about all the other awesome stuff you can buy, related and unrelated, while you’re at it. And it works.

      • Bearly Bullish says:

        And easy to return stuff as well, judging by the lines at Kohls for Amazon returns, Macys, Target, Walmart, Costco.

  21. Mary Ellen Campbell says:

    Thank you Wolf, great data!

  22. Oldpaperboy says:

    I think “mall rats “ will become an “endangered species “ in a few years…

  23. Coil says:

    The high end malls I’m familiar with, one in Orlando and Tampa seem to have a huge amount of traffic with few empty store fronts inside. Granted I only ever go on a weekend day. They have quite diverse dining options, that probably helps.

    • NBay says:

      Hmmm…….only thing I can figure out is things must be “different” somehow between malls where you live and those in Cobb, GA and N. Wales PA.
      You think it’s maybe the “diverse dining options”?

      Might have hit on an easy fix to the whole problem.

  24. Raging Texan says:

    No shopping for my family this year. Held out for a very long time but the combination of H1-B visa holders and general inflation finally destroyed my income and spending power.

    Looking for a new country to move to? Any ideas?

    • HowNow says:

      If you move to another country, you may need to get a kind of H1-B visa.

    • Random50 says:

      There’s roughly half a million h1-b holders, and many of them are focused on building wealth in the short and very unstable time they get in the country, not on out spending you. I think your Texas rage might need to be directed elsewhere.

    • Sean Shasta says:

      I see our dear billionaire oligarchs getting richer and richer while they continue on their path of off-shoring, reorganizing, restructuring, hiring H1-Bs, etc – all the while claiming that’s what they need to do to be competitive. And, of course, their political minions in both parties will go along with what the dear billionaires want. The Golden Rule – One who has the Gold makes the rules.

      And, of course, this is not about being competitive – it is about maximizing the incomes of the CEOs, executive management, and VCs/Angel Investors/Bankers. They will do anything and take any steps to make sure that their incomes and assets keep going up.

      In this situation, it makes sense to consider other countries which have better worker protection laws. Countries in Western Europe and Australia could be good targets, Singapore and Middle-Eastern countries can be good options as well.

    • NBay says:

      There’s a couple next door to my sister who both taught English in Korea for a few years….paid ok…..but they were from Montana, so I dunno if that helps you.

  25. Imposter says:

    I’m just an observer trying to understand CRE, the mall virus, and retail. However, what struck me was you comment on the Walmart observation that their grocery lines are doing just fine, while in the same stores, their “other isles” are not doing well. (If I understood it correctly). This is true of my Walmart shopping. 99% groceries, maybe 1% stuff from “other isles”.

    Looking at SPG, they seem to be landlords to owners of all “other isles” type stores on a large scale, and plowing more money into “other isles” tenants whose prospects, if similar to Walmart’s in store experience, just do not seem very bright.

    Makes me think that perhaps SPG just does not have many options, and are just moving pieces around the chess board in an effort to stave off “check mate” for a little while longer.

    • 91B20 1stCav (AUS) says:

      …it couldn’t be that longer-term financial ‘success’ tends to breed a sense of entitlement to that ‘success’ among ownership/upper management/investors, could it? (ignore “…SWOT today, SWOT tomorrow, and SWOT forever…” at one’s peril…).

      may we all find a better day.

      • NBay says:

        Had to look that one up…success breeds success…why quit when one is obviously winning?
        Have seen that shit before.

  26. One and a Penalty says:

    As Wolf indicates, grocery anchored centers are doing well. The question for those owners, particularly public REIT’s, is can they grow rents to justify their stock valuation? I suspect the “A” centers, which most REIT’s own, will be fine for the most part. “B” and “C” centers will likely have a problem.

  27. vadertime says:

    Back in the mid 1970s, shopping malls were in their heyday and as teenager I spend many hours on weekends just hanging out. One could eat at the food court, catch a movie, do some shopping and after a few hours go home. Now, as I sit here at my desk, I use my keyboard to browse different website or launch Google searches for things I want. I think I’ve gotten 5 packages from Home Depot in the past 3 weeks. Earlier this week I bought 10 t-shirts from Beall’s online with fishing themes printed on them. Yesterday, I was on Etsy getting some metal wall art that I want to decorate my outdoor space in the back yard. The only times I go to the store is to get plants and pavers at the big box hardware centers and to do my grocery shopping. Other than that, everything is online and I am one of the contributors to the demise of shopping malls. Sorry, but times change and convenience trumps over travelling to the mall. Cheers.

  28. ChrisFromGA says:

    Wondering what the long-term strategy is here. Having to buy JCP is one thing, as they’re a large anchor. But Express? They take up maybe a few hundred square feet at most. What’s next – buying up Claire’s and the local shoe repair guy? What happens when Simon and Brookfield have to buy every bankrupt retailer that leases in their malls?

    Then Simon and Brookfield will no longer be in the mall space business, they’ll be in the retail biz. Paying rent to yourself isn’t a sustainable long term business model.

  29. Cynical Engineer says:

    The malls destroyed themselves in pursuit of maximum profit.

    In the 1970’s, you could go to the mall and buy all of the following in the same mall:

    Books (2 bookstores in every major mall, B. Dalton and Waldenbooks)
    a Refrigerator (available at both Sears and Montgomery Ward)
    a Hammer
    Music on cassette or LP
    A can of paint.
    A whole variety of electronics at Radio Shack
    A couch, chair or table
    Clothes for the whole family
    a birthday card
    Artwork to hang on the wall.

    Today, if I visit a mall, I can only buy the following:
    Clothing in adult sizes or small children. “Junior” sizes need not apply.
    Shoes (but mostly athletic, with a very small selection of dress/formal shoes)
    Cell phones
    and a limited selection of fast food.

    I personally only buy clothing a couple of times a year, and a cell phone every 2 to 4 years. Doesn’t leave me with much reason to visit the mall the rest of the time.

    • Wolf Richter says:

      Now you can buy ALL of this stuff at ONE store online, in 1/10th of the time it took at the mall.

      I haven’t bought clothes in a brick-and-mortar store in over 10 years. I always hated that. Before the internet, I bought clothes from catalogues. Clothes are amazingly easy to buy online once you know your size, and amazingly hard to buy in a store because they never have what I want in my size.

      • anon says:

        My wife goes to the brick-and-mortar store to see and feel what the clothes are like. Her size is very popular so it is rarely in stock. She might try it on if she can.

        Then she comes home and orders whatever it is in exactly her size from the brand – or store’s – website.

    • 728huey says:

      In my case I hardly have to buy many clothes at all; just your basic clothes like t-shirts, polos, pants, underwear, and socks thanks not only to e-commerce but the pandemic as well. Since then I have been working remotely, and many of the clothes I once wore to go to the office I have donated to the Salvation Army and Goodwill.

  30. Dave Kunkel says:

    There’s another problem that goes with this. I’ve noticed that physical stores are not maintaining as much inventory as they use to which makes going to them problematical.

    I recently had to replace the shoelaces on my walking shoes, so I went to buy them at Walgreens where I have bought laces for years. They only had a few brown laces in stock and none of the white laces I needed.

    I went home and ordered them on Amazon – the laces arrived the next day

    • Keith says:

      Anecdotal here, but the failure of Amazon to live up to its two day delivery for me has me ready to cancel Prime next Jan (I missed the date this year). They can take in upwards of a week to get me something, whereas Walmart can hit three days. I am in the rural part of a small metro in flyover, so I suspect that is a part.

      Funny aside on how the small merchants play the big guys for delivery, I order two photo albums from Walmart. They arrived in an Amazon box. I at first thought I was confused and didn’t think much until Walmart sent me an email confirmation for delivery. Turns out the sells is on both.

      • NBay says:

        You would settle for ONLY being Amazon USDA Choice? (from good South Park show)

        I buy nothing online, but I pretty much buy nothing, anyway.

  31. IntoTheAbyss says:

    My wife and I love walking the indoor mall in the Florida heat, especially before the stores open. We never buy anything, but there’s a lot of us seniors that enjoy it.

  32. themsicles says:

    American malls are the same everywhere, same brands, same food court, same boring stuff over and over. I’d not miss them much. I hope the emerging trend to support local business grows over time in its place. The thing that’s killing in-person retail is also lack of customer connection. These companies didn’t invest in their staff. The staff didn’t invest in the customer. It’s the same thing that will drive car dealerships to a dead end. There’s no investment in customers.

    The reason e-commerce sticks is because of convenience and we can’t see how poorly the people are treated behind the scenes to be turned-off by it.

    My habits may become antiquated overtime, but I like Costco and shop their in person. Delivery with them is fine too. I wonder if their retail site is doubling up as a warehouse as well.

    Their quality holds up, their service holds up, their treatment of employees holds up.

  33. how do i find an inexpensive three bedroom in los angeles

    say near koreatown
    i was paying 2700
    but my landlord wants to kick me out and sell it

  34. Andrew P says:

    Very interesting history. I bought some pants at Bonobos some years ago at a brick-and-mortar location. They didn’t have a lot of stock and they wanted a pile of personal information that I didn’t want to share (if I did, I would’ve just gone online, so it felt like doing this at a B&M location was “the worst of both worlds”).

    They bullied me into giving them a (unique) email address I guess, because while I liked the pants and might’ve gone back, they relentlessly spammed me with advertisements for clothes that I didn’t want. So that antisocial behavior got them onto my personal boycott list, and now they’re bankrupt.

    Like many of Wolf’s commenters, I’m not a fan of ecommerce and make a concerted effort to continue supporting B&M stores but it feels sometimes like they go out of their way to make it difficult.

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