In the 12 months ended March 31, U.S. malls collectively posted a 6.5% decline in tenants' same-store sales, according to Green Street Advisors Inc., a real-estate research firm. The recent slump was led by an average 7.3% sales drop at Simon Property Group Inc., the operator with the largest number of mall locations.
The industry's woes are worsening. Thinning customer traffic, and subsequent hits to tenants' sales and profits, prompted Standard & Poor's Corp. last month to lower the credit ratings of the department-store sector. That knocked
Macy's Inc. and
J.C. Penney Co. into junk territory and pushed others deeper into junk.
Sears Holdings Corp., a cornerstone tenant at many malls, is expected to close 23 stores this month and next.
For towns and cities that are home to dying malls, the fallout can be devastating.
Commonly, "the mall will be a meeting place, or, in some cases, like a city center,"
"It can become a crime magnet."
clipped from: online.wsj.com