- US mall operator Simon Property Group said it plans to reopen around 50% of its
malls within the next week. - The company closed all its malls at the end of March and has been gradually reopening them as lockdown restrictions lift.
- Group CEO David Simon said that so far, consumer response to the reopenings has been "positive" and
retail sales have been better than expected. - Visit Business Insider's homepage for more stories.
US mall giant Simon Property Group announced Monday that it plans to open around 50% of its malls within the next week. CNBC was first to report the news.
In a call with investors after reporting its first-quarter earnings, the company said that 77 of its properties were currently open; it has around 200 malls in total in the US and 29 internationally. The company closed all its malls at the end of March and has been gradually reopening as lockdown restrictions ease.
"We are, of course, working in conjunction with state and local governments and our reopening plans. Shopper response to our reopenings has been positive, and sales at many tenants have been better than their initial expectations," CEO David Simon said during the call on Monday.
Simon said that up until the stay-at-home restrictions were put in place, the company was seeing "solid trends" in foot traffic, tenant demand, and reported retailer sales.
Despite this, net income – a metric by which company profitability is measured – fell by just over 20% during the first quarter versus the year before.
So far, consumers are responding well and seem to be comfortable coming back to malls, he said.
"Generally, the suburban [mall] outside of the major dense area seem to be doing better," he added.
Retailers are also on board with reopenings, Simon said: "I think people want to get open...and compete with the broad array of options that the consumer has."
Simon Property Group is among the landlords in the US to have been squeezed by the crisis. Enforced store closings meant that many retailers have seen sales dry up for weeks on end but are still required to pay expensive store rents. Some have simply shifted the financial burden on to their landlords and refused to pay rents or requested rent deferral.
Simon confirmed that the company has offered rent deferral to some of its tenants but did not specify which ones.
"Knowing the extraordinary changes that this pandemic has created.. we went out of the way to offer deferral for a lot of our retailers," Simon said. "We just felt it was the right thing to do."
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